Author: Suzanne Leigh

Self-Employed in the Gig Economy? Watch Out for This – Solopreneur Retirement Funds 2019

Solopreneur Retirement Funds 2019

Whether you call yourself a solopreneur, self-employed, or freelancer, you’re most likely a hard-working individual with the best boss ever – You!?However, as sole-decision makers, we solopreneurs often suffer from a lack of objective feedback. This can be especially damaging when it comes to taking care of our own basic personal needs.

If you want your business to flourish, you need to take care of yourself first

Managing all aspects of a business, from marketing to operations, requires even the most disciplined among us to push beyond our limitations. It’s easy for us to ignore our own welfare. When you are your business, you have to wear many hats. But why do we so often forget to wear the most important one – our HR hat? If you want your business to flourish, you need to take of yourself first. You need to understand your options for solopreneur retirement funds. This topic is especially critical when we consider the future we are entering.

The gig economy is a different playing field

Today, 36% of American workers are gig economy workers. By 2020, that figure is expected to increase to 40%. With 53% of companies now also opting for more flexible workers, this trend will only increase. What this means is an increase in both completely independent workers and contract workers with zero benefits.

In the gig economy, there are no benefits

In the gig economy, there are no benefits, no guarantees of a minimum wage, no guarantees of a steady paycheck, no company-sponsored retirement savings plans or saving into social security. And this is a reality that solopreneurs must come to terms with and manage, on top of everything else.

If this is the future we face, how can we take care of our own welfare while scaling our business?

Related: Ten Quick Ways to Make Money While Helping the Planet

Paying yourself is more than simply reinvesting

In the gig economy, if you don?t invest in your own retirement, who will? You can bet 100% that your business will win but you still have to hedge. Risk mitigation is what keeps events from becoming ruinous. Remember that you are not your company. If your business fails, you will still need to be healthy and solvent as you seek your next adventure. Having solopreneur retirement funds to fall back on can make the difference between whether this is possible or not.

You can bet 100% that your business will win but you still have to hedge.

We know that it can be confusing to figure out the different solopreneur retirement funds options out there. With Solo 401(k), Roth Solo 401(k), SEP IRA, Roth IRA, Self-Directed IRA and Health Savings Accounts, how do you know what is right for you??

Well Wallet cares about this topic because we are you! We are entrepreneurs and freelancers. too! So we have done the research for you. In Part 1 of our Solopreneur Retirement Fund Series, we’ll cover two retirement vehicles you should look at:? the Solo(k) and the Roth Solo(k).

The Solo 401(k)

A Solo(k), (also known as a Self Employed 401(k), Individual 401(k) or i401K,) is a plan for business owners (with no employees) and their spouses. When you have a Solo(k), you get to play two roles: ?that of the employer and that of the employee.

Bonus: this means that you get to make contributions through both of those roles.

When you have a Solo(k), you get to play two roles: ?that of the employer and that of the employee.

You as the Employer:??You are the employer and can contribute up to 25% of your net self-employment income, up to a maximum of $56,000, which is your business income minus half your self-employment tax. These pre-tax contributions* lower your taxable income and help cut your tax bill.

You as the Employee:? You are the employee and are allowed to contribute pre-taxed* earned income up to the annual contribution limit. ?For 2019, you can contribute up to $19,000 as an employee even if $19,000 represents 100% of your self-employed earnings for the year! (If you?re over 50, you get an additional $6,000 added to your contribution limits for a total of $25,000.)

Bottom line:?As both employer and employee, you can contribute up to $56,000 for the 2019 tax year ($62,000 if age 50 or older). If your gig is taking off this year, this is a fantastic solopreneur retirement fund opportunity.

*Pre-tax contributions and their earnings will be taxed as regular income when they are withdrawn in retirement. If you want to avoid being taxed when withdrawing contributions and their earnings, you might want to consider adding a Roth Solo(k).

The Roth Solo(k)

Another option is the Roth Solo 401(k). While Roth contributions are taxed, you will not be taxed on the contributions or their earnings when you withdraw them after the age of 59 ?.

Note: this assumes you have had the account open for at least 5 years.

Roth contributions are taxed before, not after

So, while Roth contributions don?t give you a tax break now, you can withdraw the money (and the gain on that money) tax-free in retirement. Depending upon whether or not you think you will be in a higher or lower tax bracket by that age, this can give you quite a break at the end of the road.

You can only contribute up to $19,000 of employee contributions annually to the Roth Solo(k). Like the Solo(k), you get an additional $6,000 added to your contribution limits for a total of $25,000 if you are over 50.

There is no employer contribution with the Roth Solo(k)

Related:? Forget Retirement – Here’s Why You Need to Start Investing Now

Top Questions to Ask When Setting up a Solo(k)

To set up a Solo 401(k), you need to complete an application to open an account with a financial institution. Solo(k)s are offered by the largest retail brokers, including Vanguard, Schwab, and Fidelity. You?ll definitely want to shop around a bit and compare plans at different institutions. Here are some important questions you’ll want to ask while shopping for your Solo 401(k):

1) What investment options should I choose?

Once you open the account, you then need to pick the investments in the account.?Make sure that your plan provider offers total stock market index funds that are low cost (low expense ratio), have no sales loads and have commission-free trades into these funds.

Why you should choose passively managed index funds

  • Low Cost

If you hire someone to manage your investments for you, that person tries to beat the market by picking and choosing investments. He or she performs an in-depth analysis of many investments in an attempt to outperform the market index, like the S&P 500.

Hiring someone to actively manage your funds takes a big cut out of your return.

Hiring someone to actively manage your funds takes a big cut out of your return. There?s the expense ratio, which is a recurring fee the fund deducts from your account. There are sales loads, which you pay when your manager buys your funds. There can be commissions and a myriad of other fees that investors just aren?t aware of when they hire an advisor to pick their funds or invest in actively managed funds.

For the 15-year period of April 1, 2001 through March 31, 2016, only 29% of actively-managed U.S. large company funds were able to beat the S&P 500 Index. – The Balance

You would hope that after all of these fees are deducted, the performance of your funds would beat the market, right? Unfortunately, the opposite is often true. Actively managed funds rarely beat the market over time, and they are more costly. ?But what if there was a simple and cheap way to passively own a small piece of the entire stock market instead of paying someone to try and ?guess? which stocks might beat the market? Well, there is. They are called index funds.

  • Broad diversification

An index fund?tries to mimic the returns of an index it follows (such as the S&P 500) by purchasing all (or almost all) of the holdings in the index. Thus, they are referred to as ?passively managed? and are therefore cheaper to buy. Instead of paying someone to try and pick a winner that beats the market for you, you are actually just buying the whole market.

  • Tax efficiency

Another benefit of index funds is that they are tax efficient. Index funds have extremely low turnover while actively-managed funds often have high turnover ratios. Higher turnover = higher taxes. When funds have more buying and selling activity (aka turnover), some securities will probably sell at a higher price than they were purchased. That means you’ll be paying capital gains taxes more frequently.?

So, to recap. Index funds offer:

  • low cost
  • broad diversification
  • tax efficiency
  • set and forget simplicity (no day trading)
  • superior performance

These index funds have broad coverage and very low expense ratios

(As of April 2019)

Vanguard VTI Vanguard VTSMX Vanguard VTSAX Schwab SWTSX Fidelity FZROX

* Initial minimum investments into retirement accounts such as the Fidelity Simplified Employee Pension-IRA, Keogh, Self-Employed 401(k), and Non-Fidelity Prototype Retirement accounts are $500 or higher.?

**NEW index fund from Fidelity – with zero expense ratio. They are the first to get rid of the expense ratio for their total market index.

*** No loads or trading fees when you purchase from the fund?s platform. For example, if you choose a Fidelity Total Market index fund and trade through your account at Fidelity, you will not be charged a commission. However, if you trade that same Fidelity index fund through an account at Schwab, you will be charged a trade fee. Tip: open an account with the broker that has the funds you want.

Why We Like Vanguard (No, we aren’t paid to say this.)

We like Vanguard because their Total Stock Market Index fund has the most companies (about 3,600). That’s almost every publicly traded company in the U.S. They also have some of the lowest expense ratios (0.04%) and no trading fees. That means you can invest every single month without paying commissions.?Also, Vanguard pioneered the index investing movement and operates its business at cost. Vanguard has no outside owners. If you own a Vanguard fund, you own part of Vanguard. We think this keeps the incentives in the right place.?

Bonus (this applies to any broker): you can split your contributions between total stock market funds and an investment strategy YOU believe in. (For the folks at Well Wallet, that would be sustainable investing.)

Related:? 4 Ways to Make Real Money with Sustainable Investing

2) Loans:? Can you take loans from the plan?

Federal law allows workers to borrow up to 50% of their account balance, up to a maximum of $50,000.?But be very careful with loans from retirement accounts. Some 401(k) plans ban contribution for six months after a loan. Also, remember that you will be paying both the loan payment and the interest on that loan with post-tax dollars. Finally, a loan from your 401(k) takes your earnings out of the market. While loans can be helpful during times of crisis, make sure you understand the rules regarding them.

3) Rollovers: ?Are they allowed into and out of the plan?

You may find yourself in a position later where you are working for an employer again. In this case, you may want to roll your Solo 401(k) into your employer?s Traditional 401(k) in order to take advantage of employer matching if their plan allows it. You may also want to roll an existing 401(k) into a Solo 401(k) or roll your Solo 401(k) into an IRA or visa-versa. For these reasons, find out if your plan can be structured to accept rollovers.

4) Does the plan offer a Roth option?

As mentioned above, a Roth option accepts taxed employee contributions. This means that you can invest all or part of the $19,000 and you will not be taxed on the contributions or their earnings if you withdraw them after the age of 59 ? (and if you’ve had the account open for 5 years.)

Note: ?Employee contributions must be made by the end of the calendar year but you can make Employer contributions until the tax-filing deadline.

Tip: Be sure to open your Solo 401(k) account before December 31st, 2019 to be able to make employee contributions and lower your taxes for the tax year 2019.

Rules about Withdrawing funds from a Solo 401(k)

  • If you make withdrawals before you are 59? they may be subject to a 10% early withdrawal penalty in addition to any applicable taxes. This is a big deal. Don’t withdraw your funds early. If you have to, take out a loan and pay the interest back to yourself before liquidating the account.?
  • You must take required minimum distributions from Solo 401(k)s starting at age 70?.
  • You can roll your Solo 401(k) assets into IRAs or an employer?s 401(k) (if it is allowed by that employer?s 401(k).

Stay tuned for the next issue of The Solopreneur Retirement Fund Series where we will continue our discussion on more Solopreneur Retirement Funds options such as SEP, SEP IRAs, Roth IRAs, Self-Directed IRAs, and HSAs (Health Savings Accounts.)

Related:? Governments and Emojis Can’t Solve World Problems – We Can!


More from our lawyers: Well Wallet, PBC (aka WellWallet) is an informational platform for personal finance, and unless specifically stated otherwise, the content is provided to you without charge. WellWallet is not a financial planner, broker, or tax advisor. We cannot provide any advice for your specific financial situation. Our goal is to help you understand how to better manage your finances and how your finances affect your life goals, but we can never make any guarantees about your financial future (or present). The material here is meant for informational purposes only. ?It should not be considered legal or financial advice. See our Terms & Conditions for more information.

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WellWallet RoundUp: Get a Fresh Start! Spring 2019

If You Missed your New Year?s Resolutions, Now is the Best Time to Get a Fresh Start!

Spring is a great time to initiate new habits or eliminate old ones. As the earth awakens from its winter slumber in an annual rebirth, spring is traditionally a time for renewal and new beginnings. It’s a perfect time to get a fresh start.

On Wednesday, March 20, 2019, at 5:58 p.m. ET, the spring equinox brings us the first day of spring. The spring equinox occurs when the sun crosses the celestial equator from south to north. This year we also have a full supermoon following the equinox at 9:43 p.m. ET. A moon is a called a ?supermoon? when it is at its closest to Earth during the month.

Did you know that a March full moon is also called A Full Worm Moon according to Native American lore? It’s in March that the ground begins to soften enough for earthworm castings (worm poop!) to reappear, and for new tender roots to start pushing through the warmer, softer soil. Plants and insects are born, birds are hatched, and the cycle of life begins again.

Spring is a wonderful time to sow new intentions into your life.

So, if you didn?t quite get on your News Year?s Resolutions, get a fresh start! Now is the time to plant seeds of positivity, tenacity and hope. Work on developing new habits. Revitalize dreams and goals with renewed spirit. Now is the time to practice self-compassion, and nurture yourself gently over and around the obstacles keeping you stuck. As we tend to reap what we sow, let yourself begin again by planting the seeds for the future you want to create.

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Life

Got a dream? Breathe life back into it this Spring…

Last month we talked about why you can?t play the short game with your passions. While we, as humans, learn and change along the way, our dreams, in their rawest form, linger on, clinging to the edges of our hearts. Got a dream? Your first job is to not let yourself down. No matter how many doors slam in your face, ?here?s why you have to keep going.

Money Stories

Can?t afford your wealthy friend?s Spring Wedding? Don?t sweat it…

In our last Money Story, our guest author explains why real friends won?t throw tantrums if you can?t afford their spa bachelorette weekend in Ojai, nor will they cry if you suggest having them over for dinner instead of joining them on a birthday bar night. Most friends will just be happy to hang out. ?And if they?re not, those aren?t real friends. If your social life is breaking your budget, here?s why it?s ok to practice saying No.

In actual life, most friends wouldn?t ask their social circle to cough up dollars to celebrate a success.

Did you know?

Well Wallet Money Stories is a place where Real People share their stories of financial struggle, loss, perseverance, and triumph.

If you have a money story that needs to be told, please submit it to info@wellwallet.com.

We will never publish your name without your permission. You can use a pen name or choose to remain anonymous. ?Or you can submit photos and go fully candid. It?s up to you!

We all have money stories, and we need to talk about them. It?s through sharing our stories that we heal, grow and learn from each other.

Spend & Save

Get paid for Spring Cleaning and give the Planet a break, too.

Out with the old! How much can you make off of the junk in your closet and garage?Get paid to recycle your old electronics, CDs, DVDs, books and even Legos. Use Decluttr to clean up your home, make money, and limit waste to landfills (electronics are upcycled and resold). No auction fees, next day payments, price promise and free shipping. Check out Decluttr before your big Spring Clean!

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7 Spring Travel Tips that will save you big time!

Planning travel this spring? Whether you?re heading on a once-in-a-lifetime island adventure, budget backpacking in a foreign country, or just on a road trip with your squad, doing some financial prep ahead of time can save you major cash on your trip. ?Check out these 7 Save Cash Travel Tips that will help you stretch your dollars on your trip.

This Spring, Become a Conscious Consumer!

If you’ve been meaning to redefine what it is to be responsible with your dollar, spring is a great time to get a fresh start. Good companies can help guide the way. While it’s easy for companies to merely equate business with profits, some companies care about more than money. They care about the environment. They care about the people living on this planet. Some of them even care about both. But the most innovative companies are the ones that do social good and save customers money. ?Here are 6 conscious companies that you can trust to do both.

The most ?innovative companies do social good and save customers money.

Bank & Invest

New this Spring! A Green Account that Pays!

Sick of bank fees, ATM fees and checking accounts that use your money and pay you nothing? Sick of banks that fund destructive fossil fuel projects? Get a fresh start and switch to a new green account that pays up to 2.00% APY interest, has zero fees ever, free ATMs worldwide, and does not use its customers deposits to fund oil projects or campaign contributions. Aspiration?s new Spend & Save account gives you more, and gives back to the planet and its people . ?Learn more about this innovative account.

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You don?t have to be Warren Buffet to be a good investor? you just have to be willing to learn.?

You probably have good reasons for not investing in the stock market – ?lack of knowledge, fear of losing money, a general mistrust of brokers and advisors, and believing you don?t have enough money to invest. ?The idea of investing can be downright scary. But if you doubt that you can beat the vast majority of active investors, while only spending a few hours a year doing it, you may be selling yourself short. There are safer approaches to investing that emphasize conservative and passive strategies you can even teach your kids.

This spring, commit to learning a skill that will allow you to reap benefits for years to come.

Entrepreneur?s Corner

Spring Means Tax Time Again!

Are you a freelancer or an independent contractor? Do you have a side gig?

If you made more than $400 on your side gig in 2018, you are on the hook for self employment taxes as a sole proprietor.

Check out our Solopreneur 2018 Tax Overview. It?s not all bad news in 2018. There are some changes in the tax law that could help you save a bundle! Understanding where you can save is only going to benefit you as you scale and help you plan ahead for future expenses.

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We Found A Green Account That Pays You 200% More Than The Big Banks

Free ATMs Worldwide. Zero Fees. Unlimited Cash Back. 2.00% APY interest ? Aspiration?s New Spend & Save Account Really Gives

How?
  • No fees, ever.
  • Free ATMS anywhere in the world.
  • Unlimited Cash Back on Every Debit Card Transaction.
  • Additional Cash Back Rewards for Socially Conscious Spending.
  • Earns up to 2.00% APY Interest ? up to 200 times more than ?Big Banks.?
  • Fossil Fuel free. Your deposits are never used to make loans to oil & gas. Ever.

Aspiration is really upping their game. While they?ve always been on a solid mission to help customers make money and make a difference at the same time, their new Spend & Save account makes it even easier and more profitable for everyone. Here?s how:

How does Aspiration help customers save money on banking services?

  • No fees, ever! No Bank Fees. No ATM fees.

Most Americans today pay hundreds of dollars in fees every year on their ?Big Bank? checking and savings accounts while earning practically nothing in interest payments. Between monthly fees, ATM fees, overdraft fees, check deposit fees, and debit card usage fees, most of us are used to getting gouged here, but we don?t have to be.

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How does Aspiration help customers make money?

Aspiration?s new Spend & Save account is now offering up to 2.00% APY interest on deposits. Yes, you read that right. That?s up to 200 times more than the interest traditional banks offer. Compare that to what the big banks are currently offering:

  • Wells Fargo 0.01%
  • Chase 0.01%
  • Bank of America 0.03%
The average APY interest rate for checking accounts in 2018 was 0.07% ? Bankrate
Unlimited Cash Back Rewards with Your Debit Card

Cash Back rewards are generally unheard of for debit card customers. Only wealthier credit card holders can take advantage of them these days. Aspiration?s Spend & Save account is not only making cash back rewards available to everyone, they?re also giving customers a chance to earn even more by spending sustainably.

  • .5% cash back on all purchases made with your debit card. Yes, that means everything you buy with your debit card generates cash back.

How Does Aspiration help customers make a difference (?and then pay them for it?)

Additional Cash Back Rewards for Spending Sustainably
  • An additional ?.5% cash back bonus reward for all spending at socially-conscious businesses. Aspiration offers a 1% reward when you shop businesses that have the best sustainability practices and most employee-friendly policies.
An App That Gives You Your Own Personal People and Planet Scores

How can you know if you are spending your money at a sustainable, employee-friendly business?

Aspiration?s Impact Measurement app (AIM), a new feature of the Aspiration Spend account, lets you see your own Sustainability Score ? the impact you?re making on People and the Planet based on where you?re shopping and spending every day. Now you can track the power of your money, and get paid for supporting good business.

How does Aspiration strive to help people beyond its customer base?

Aspiration?s ?Dimes Worth of Difference? donates one dime for every dollar its customers agree to pay to charitable activities that enhance economic opportunity.Aspiration partners with networks like Accion which provide micro-loans to empower low-to-moderate income business owners through access to capital and financial education. They want to help struggling Americans transform their lives.

How does Aspiration strive to help the planet heal and thrive?

Traditional banks generally have horrible track records funding destructive environmental and social enterprises. Unlike the big banks, Aspiration will never invest your deposits to make loans to oil and gas companies. They use their revenue for good.

Unlike big banks, Aspiration does not use its customers deposits to fund oil pipelines or campaign contributions.
By comparison:

Aspiration are divested from oil and gas, and they put your deposits in places you can feel good about.

If you think this sounds too good to be true, we think Aspiration deserves your attention. Here?s a quick review of the features of Aspiration?s Spend and Save account:

  • Pays you up to 2.00% APY interest ? Seriously, that?s like 200x more than the big banks offer.
  • Unlimited cash back rewards with every dollar spent
  • Extra cash back rewards for spending sustainably
  • Low minimum deposit ? You can open an account with just $10.
  • No minimum balance ? No minimum balance required, ever.
  • No service fees ? Aspiration?s ?Pay What is Fair? fee means you pick your fee, even if it?s zero. And you can change it anytime you want
  • No ATM fees ? Free access to your money at every ATM in the world.
  • FDIC insured on deposits ? Deposits in your Spend & Save are insured by the FDIC up to $250,000 per depositor
  • Certified B Corp ?Aspiration is B-Corp certified. B-Corps must have a beneficial impact on society, employees, the community, the environment and profit as legally to retain their status.
  • Aspiration Gives ? Commits to donating 10% of its earnings to charities.
  • 100% fossil fuel free deposits.
  • An app that gives you your own personal People and Planet score so that you can both track your footprint and monitor your finances!
  • Industry Standard Encryption ? Multi-Factor Authentication and 256-bit encryption.
  • Cell phone protection insurance
  • Identity fraud expense reimbursement

The traditional systems that separate capitalism and philanthropy is crumbling quickly, and Aspiration is leading the way with their new Spend and Save Account. These guys are competitive (and they?re green.) Check them out!


 

Switching to Aspiration could mean saving up to $545 per year, or over $45 per month, based on $329/year average fees reported in Bank Fee Finder Report, April 2017; $54/year cash back on $10,857 average debit card spend from the 2018 Debit Issuer Study; and $162/year in interest from the difference in earnings on a $8,100 median bank balance between 2.00% APY and 0.01% APY. APYs are based on a comparison of Aspiration?s Spend & Save cash management account 2.00% Annual Percentage Yield (APY) to the following savings account APYs reported by Bankrate for 12/28/18: Wells Fargo (0.01% APY), Chase Bank (0.01% APY) and Bank of America (0.03% APY). The US median combined savings & checking account bank balances of $8,100 was reported Nov 2018 by Smart Asset based on the Federal Reserve?s Survey of Consumer Finances.

The Aspiration Spend & Save account is a cash management account. Interest rate and Annual Percentage Yield (APY) comparisons are based on a comparison of Aspiration?s Spend & Save cash management account 2.00% Annual Percentage Yield (APY) to the following savings account APYs reported by Bankrate for 12/28/18: Wells Fargo (0.01% APY), Chase Bank (0.01% APY) and Bank of America (0.03% APY). Note that cash management accounts and savings accounts may each offer different features and protections. Neither Aspiration Partners, Inc. nor any of its subsidiaries is a Bank.

Aspiration Partners, Inc. and its affiliates are committed to ?All Extra Services Provided at Cost,? meaning that we?ll only charge you what it costs us to provide the extra service (such as a wire transfer), and not a penny more. Besides these at-cost service charges, the only account fee you pay is the fee you choose, even if it?s $0, which is why we call it Pay What Is Fair.

Banking on Climate Change: Fossil Fuel Finance Report Card 2018, by Rainforest Action Network, BankTrack, Sierra Club, Oil Change International, Indigenous Environmental Network and Honor the Earth.

The special insurance program descriptions herein are summaries only. Such summaries do not include all terms, conditions and exclusions of the policies described. Please refer to the Overview of Benefits, Identity Fraud Protection and Cellphone Protection for complete details of coverage and exclusions.

All ATM withdrawal fees will be waived for your Aspiration Spend & Save Account. In addition, your account will automatically be reimbursed for all ATM fees charged by other institutions while using an Aspiration Debit Card linked to your account at any ATM. The reimbursement will be credited to the account within 2 business days of the ATM fee debit. Please note, there is a foreign transaction fee of one percent that is not waived, which will be included in the amount charged to your account.

Deposits are insured by the FDIC up to $250,000 per depositor by being swept to FDIC Member institutions. For details, see their FAQ and visit https://www.fdic.gov.

The Annual Percentage Yield (?APY?) associated with the Aspiration Spend & Save Account is variable and accurate as of 2/23/19. Rates may be changed from time to time without notice. To earn 2.00% APY on Save account balances in any calendar month, a deposit of at least $1 in that calendar month into any Aspiration banking or investment account, or a single end of day Aspiration Save balance of $10,000 or more during the calendar month is required. Minimum deposit required to open a Save Account is $10.00.

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WellWallet RoundUp: What is Wealth? – January 2019

What is Wealth?

Today the word “wealth” relates to finances. But if you look at the etymology of the word “wealth,” you will find that its Olde English ancestors before the 1400?s carried broader meanings including ?well-being, wellness, welfare, happiness and prosperity.?

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Perhaps we can reappropriate our modern English definition of the word and reclaim a bit of the 600 year old nuances? After all, the answer to the question, “What is wealth?” can very well be subjective. One man?s treasure is another man?s trash. For some, no number of yachts are enough. For others, wealth is simply that quiet hour of peace at sunrise.

At Wellwallet, we look at the definition of wealth in a well-rounded way. An increase in wealth may not mean an increase in the balance of your savings account. Rather, it could mean a healthier attitude towards spending. Or a plan to finally start paying down consumer debt, or investing your weekly pocket change in a sustainable investment platform.?

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Life

This month we discussed a variety of ways to expand on your wealth. From mustering ?the courage to ask for more money from your employer to learning to forgive yourself for your past financial mistakes so that you can move on to a healthier future you. A healthier wealthier you may be a you who understands how to handle money anxiety and can protect the future of your mental health.

Money Stories

In this month?s Money Stories, our guest author describes having to pay her visa bill with rolled coins, and what it took to climb out of debt. She learned that the sooner we can comfortably tell our stories about crashing worlds, and being hungry, the sooner we can talk about everything else.

When we don?t talk about money ? or our lack of it ? we operate under the assumption that everybody is doing fine. They?re not.

Did you know?

Well Wallet Money Stories is a place where Real People share their stories of financial struggle, loss, perseverance, and triumph.

If you have a money story that needs to be told, please submit it to info@wellwallet.com.

We will never publish your name without your permission. You can use a pen name or choose to remain anonymous. ?Or you can submit photos and go fully candid. It?s up to you!

We all have money stories, and we need to talk about them. It?s through sharing our stories that we heal, grow and learn from each other.

Spend & Save

No matter how many truckers try to block Tesla owners from charging their cars, there is no stopping market economics. The market doesn?t want GM, the market wants Tesla.?The reason why conservative towns in Texas are installing wind farms is because it makes economic sense. The reason why there is a run on solar roof?tiles is because they are cheaper over the long term versus regular roof tiles. To make the world a better place, we must build better products.?Products that people actually want. ?


Update:? Elon releases his patents.

They have been removed, in the spirit of the open source movement, for the advancement of electric vehicle technology. – Elon Musk
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Bank & Invest

The death of the Department of Labor?s Fiduciary Rule last summer means that we all need to be more diligent with our 401(k). While Wall Street and the Department of Labor go back and forth about the who/what/why of fiduciary duties – compound interest, excessive fees, and conflicts of interest in your investment portfolio could be eating away at our future. How can you know? Check it out.

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Entrepreneur?s Corner

Are you a freelancer or an independent contractor? Do you have a side gig?

If you made more than $400 on your side gig in 2018, you are on the hook for self employment taxes as a sole proprietor.?

Check out our?Solopreneur 2018 Tax Overview. It?s not all bad news in 2018. There are some changes in the tax law that could help you save a bundle! Understanding where you can save is only going to benefit you as you scale and help you plan ahead for future expenses.

Your Money In The News – December 2018

Your Money in the News ? December 2018

Your Money in the News:? Wells Fargo still paying fines, Robinhood’s new?not exactly bank accounts, dialing in on post-Christmas consumer debt, more…

Let?s Get Rid of Credit Card Debt in 2019 – US News

How? Explore your options by doing research so that, in trying to get out from underneath the APR burden you are currently suffering, you don?t actually make things worse.

The following two tools could help, but be careful.

Balance transfer cards: ?

These aren?t a freebee. There’s a reason credit card companies offer zero/low interest balance transfer cards. They want to rope you back into the same circumstance you’re in now!

First of all, some have an ?off the top? transfer fee that equals a percentage of your balance upon transfer. For example, if you have a $5,000 balance to transfer, and their transfer fee is, say 3%, that?s $150 bucks off the top, added to your balance. Some cards don?t have that fee, so look for those cards.

In addition, if you don?t already have an aggressive paydown plan, you’ll probably end up with their ?regular? APR after their ?zero/low interest? payment period expires, which is most times really high, like 20% or more. So you need to be diligent about tracking how long their zero/low-interest deal lasts, or you might end up in a worse situation down the road than you are now. If you don?t think you can aggressively pay down the balance during that period, which can be anywhere from 6 months to 2 years, balance transfer cards are perhaps not the best option for you.

Customers are going to keep the card for longer than that promotional period. So it’s important to know what the ongoing terms and fees are. -?Rachana Bhatt, Managing Director of U.S. branded cards at Barclays

Debt consolidation loans: ?

We’re actually living in good times for this option. There are a lot of lenders out there. ?If you have a fairly decent credit score, you may be able to get a low-interest rate loan with a fixed interest rate (which will protect you in the future as interest rates are rising.)

Like zero/low-interest card transfer options, some lenders might charge you a fee off the top. A good credit score gives you more wiggle room here. A consolidation loan will tie you into regular payments for a set period of time, which can be good if you are disciplined about getting rid of your debt. If you can find a good loan, you can at least see the light at the end of the tunnel which can be motivating, whereas transferring your credit card debt to another credit card could just continue the game.

Bottom line? There are tools out there to help you if you are disciplined about getting rid of debt, but make sure you really understand them.

Related:? How to Get the Best Personal Loan (from a lender that isn’t ruining people or planet)

The Post Holiday Credit Card Debt Crunch, and How to Avoid it Next Year – Rocketcity Now

We talked about this before you started shopping for Christmas. But this isn?t about ?we told you so.? We don?t work that way. So, if you threw a lot of Christmas gifts on your cards at the last minute, start planning now how you can do it differently next year. Regret isn?t going to pay the bills, so leave it alone.

For example, throughout the year, you could toss your loose change into a ?Christmas jar.? By next December, you’ll be out in front instead of chasing Christmas’ tail with your credit cards.

Even though it feels like we’re finished with Christmas, it will surely come again. So, instead of feeling bad about overspending on cards this year, put your energy into planning a strategy for next year as well as aggressively paying down your cards. Your 2020 January self will thank you.

Related:? DIY Credit Card Debt:? A Guide to Permanent Debt Relief

Oh, Wells! Why Can?t You Just Be Nice? – Reuters

$575 million. That?s a huge chunk of change. And Wells Fargo owes it to the U.S. This is on top of the $190 million for Fed claims and over $2 billion in penalties. Why? Because they broke the law. Who suffered? Everyday people.

Over the past two years or so, Wells has been in the news because of its business scandals. Wells opened fake accounts using their existing customers’ information. Wells improperly charged people for financial products, like auto and life insurance. The question is, did Wells pay more in fines than they made by screwing their own customers? Was it worth it, Wells?

Instead of safeguarding its customers Wells Fargo exploited them. This is an incredible breach of trust that threatens not only the customer who depended on Wells Fargo, but confidence in our banking system. – California Attorney General Xavier Becerra

Related:? Divorce Your Bank in 8 Simple Steps:? Who Are You Trusting with Your Money?

The Risk of Robinhood’s Checking and Savings Accounts – American Banker

Robinhood is a popular brokerage app that allows you to buy and sell stocks with no minimum amount and no fees. Sounds pretty cool, right? But now, Robinhood is marketing checking and savings accounts that aren?t exactly checking and savings accounts. ?

Robinhood is not a bank, it is a broker-dealer but it has been marketing its new checking and savings accounts as banking products. This is raising some eyebrows. Regardless of how attractive the 3% interest rate sounds, these accounts are not insured by the FDIC. They are insured by the SIPC which is a different animal altogether.

FDIC (Federal Deposit Insurance Corporation) insured means that your checking or savings account is insured for the amount of money in your account up to $250,000 dollars by the Federal Government if your bank becomes insolvent.

(To find out if your accounts are insured, go here.)

SIPC (Securities Investor Protection Corporation), protects member broker-dealers up to $500,000, which includes $250,000 in cash, should a firm fail financially. But it only insures the market value of the investment at the time of failure. So, if you ?deposit? money into a brokerage account, the amount insured is dictated by the market at the time of insolvency, not your initial investment.

The SIPC does not fully guarantee a depositor?s entire original investment plus interest in the event of the failure of a brokerage. Instead, the SIPC reimburses investors the value of their funds on the day of the insolvency.

In addition, the SIPC simply doesn?t insure checking and savings accounts. It insures money intended for securities. SIPC could possibly turn around and say ?Hey Robinhood, we don?t insure checking and savings accounts!?? (In fact, they already have.)

SIPC protects cash that is deposited with a brokerage firm for one limited purpose ? the purpose of purchasing securities. Cash deposited for other reasons would not be protected. SIPC does not protect checking and savings accounts since the money has not been deposited for a protected purpose. -??Stephen P. Harbeck, president and CEO of SIPC

In response to this, it appears that Robinhood is now ?rebranding? its checking and savings products into something called a ?cash management? system. The worry is that consumers will not really understand the risk inherent in the accounts if Robinhood isn?t more transparent about what they actually are.

Always, always read the small print.

Related:? How to Use Technology to Grow Your Money and Change Our World:? Podcast with WellWallet Founder Sofia Rossato

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