Alternative investments are anything that doesn’t fall under the category of stocks or bonds. Three popular alternative investments are gold, real estate, and collectibles. While some may think that they make valuable portfolio additions, are they really worth it?
Here are the top 3 alternative investments, along with the straight facts:
- Gold. Investments in any commodity, including gold, should never equal more than 3% of your portfolio. Remember that gold is only a small fraction of precious metals and precious metals are a small fraction of commodities. Commodities are but a fraction of alternative investments, and alternative investments should be a small fraction of a diversified portfolio.
- Real Estate. Over the past few years, the appeal of purchasing real estate to diversify portfolios has gained tremendous popularity. In actuality, most investors have enough exposure if they own one home. Keep in mind the expenses that add up due to repairs, utilities, and taxes which decrease the overall value of the investment opportunity.
- Collectables. Collecting stamps and coins can bring about much personal enjoyment, but is the investment really worth it? This financial segment depends on the individual. Ultimately, collectibles can be a great heirloom to pass down to future generations, but they will probably not react to price in the way that stocks and bonds do.
Many millennials face the challenge of meager funds at the beginning of their financial career. Fresh out of college and oftentimes carrying debt, bank accounts can be dry during the early stages. Managing finances doesn’t have to be a struggle though. As technology develops, so do new ideas to help young professionals tackle every stage of personal finance.
Here are 5 mobile apps that accomplish specific financial tasks:
- Saving cash in “envelopes.” Mvelope gives users up to 25 categories of “envelopes” which get connected to a total of 4 bank accounts. This provides an easy way to break down a monthly budget into several categories of expenses.
- Balancing your income and expenditure. This app has emerged to promote the concept of micro-saving. It’s called Balance and it provides recommendations in the form of “recipes” based on your spending habits and investments.
- Knowing your transactions. A personal finance manager app called Money View offers a snapshot of all your finances. It even has a bill tracker, so you never miss a payment.
- Sharing your budget with your partner. A conjoined app called Good Budget tracks expenses made from the connected account. You can share your budget with your partner or family members across this device.
- Tracking your overall financial position. Mint was designed to dive deep into your financial transactions. It analyzes your spending habits and gives you tips on where to save.
Today, self-learning software is completely commonplace. A form of Artificial Intelligence, “machine learning,“ is already responsible for the items that display on our Facebook news feeds or the competency of our Google searches.
What happens when machine learning merges with personal finance? AI has already made it to some rapidly growing personal financial apps and many major financial service providers are tapping into its potential. One widely used mobile app called Acorns, for example, connects to your credit card and rounds up every purchase you make, investing that little bit into a share portfolio. Oddly enough, the idea of Google or Facebook assigning you a credit score and offering you a loan is not far-fetched. The technology powerhouses such as Alibaba and TenCent (China’s most powerful social network) have already done so.
In a nutshell, here are 3 futuristic ways that Artificial Intelligence could change personal finances:
- Swapping bank-tellers or financial advisors for algorithm-powered chatbots.
- Fully automated investment services that can move your money through global markets within seconds of financial news.
- The ability to instantly access loans based on data you’ve already shared online.
When it comes to choosing a travel credit card, taking the time to evaluate all the options and researching the right fit for your finances are important steps. Signing onto a new credit card is a big deal, but it doesn’t have to be a daunting dilemma later on. Taking the extra time to discover the right card for you now means less of a hassle in the future.
Here are 5 musts to add to your checklist next time you are shopping for a new travel credit card:
- Check how much you need to spend to qualify for bonus rewards.
- Find out how you can redeem the points you’re earning.
- Make sure the annual fees are worth it.
- Narrow down 2-3 cards and do a side-to-side comparison of the benefits. Not all cards are created equal.
- Assess which rewards will suit your lifestyle and pay off.
A recent report from Fundrise surveyed Millennials on their financial preparedness and the majority of them were not feeling prepared – 62.7 % to be exact. As the business cycle constantly ebbs and flows, what can we do to play it safe and stay financially fit? The good news is that we hold incredible power in our hands to prepare financially and stay afloat during these times of uncertainty. All we have to do is use it.
Here are 5 ways Millennials (or anyone) can stay financially prepared for the future:
- Keep your lifestyle inflation in check. Creating good spending habits at an early age and keeping a constant standard of living are powerful ways to stay on top of your financial game.
- Avoid bad debt. Implementing the aforementioned is a prerequisite to living debt-free, but if you do find yourself with some, knock it out (ASAP).
- Have an emergency savings backup plan. While it may be unrealistic to have 6-12 months of living expenses saved, you should have something to depend on in a crisis. Roth IRA savings, a home equity line of credit, zero percent interest credit card offers are all good options to ward off catastrophe should the worst happen.
- Take control of your career. Having a strong foundation in your interests and becoming indispensable to your boss are great ways to weather any financial storm.
- Diversify your income streams. Using your skills and tech know-how are wonderful advantages to extend your income beyond a day job. Starting a side hustle is a wonderful way to be proactive (and save extra for the future!)
Photo by William Iven