Your Money in the News ? Sept 29th

This week: Is zero debt the new rich?, 6 money tips for entrepreneurs, money milestone checklist, when to sell stocks, side hustle

Is Zero Debt The New Rich? ? Huffington Post

If you were born between 1982-1999, you may be confronted with a new era of finances to tackle, and perhaps, redefine. These days, it seems that ?prosperity? has a different definition than that which gen-xers and baby boomers grew up with and here?s why:

Simply put, these are roadblocks that their parents and grandparents did not face. For millennials entrenched in debt, zero is the new rich. ?Having zero debt turns out to be an excellent step forward as money making methods are constantly changing. Things like buying a home, purchasing a car, getting married, or having kids, are out of reach for many millennials due to myriad of things like poor credit scores, lack of funds for down payments, and incomes sucked up by student loan debt.

Perhaps it?s time to redefine what it means to be wealthy in this era. Below are 4 big questions gen-xers and baby boomers face, and the new answers millennials might want to keep in mind as they move forward in their financial career:

Does having zero debt mean you have to ditch the ?white wedding??

The answer is ?no?, but you may want to reconsider any extravagant details if you want to knock out debt. ?The average cost of a wedding nationally is about $27,000.

What about buying a house?

Ideally, it would be best to be at zero debt before investing in a home. Student loan repayments eat the money that is required for the down payment.

Do I have to delay buying my dream car?

Getting to zero debt means a more practical car, for now. Paying off student debt and saving up now means a dream car later. Pro-tip: If you are in the market for a vehicle, buying the car will get you to zero faster than leasing.

Does this mean putting off starting a family?

Ultimately, it?s best to get to zero debt first and here?s why: ?average student debt between the ages of 35-50 is $20,000. This means less money to save for your own children?s education which can put your own children in even more debt than you are in the future.

What about saving?

It turns out that paying off debt and saving up for the future go hand in hand. Having an emergency cash keeps you prepared for any of life?s ups and downs. This means you don?t incur further debt.

Is it ok to invest while paying off debt?

The answer is yes and no. Time is your friend with investments and the sooner you start, the longer your investments have time to grow. Conversely, if you put a significant amount in the market instead of paying down your debt it could just create more debt because debt generally carries higher interests than most investment vehicles.

Pro-tip: Getting to zero debt is the top priority. If you think you can become debt-free within 3-5 years, then wait to invest until you pay off the debt completely. However if getting to zero debt looks like 10-20 years down the line, then go ahead and invest now so that you have some money growing while you aim for zero.

What about retirement savings?

It depends on your job situation. If you work for a company with an established 401(k) that they match, then go for it because it?s tax-free money. However, if you are a freelancer or work on a 1099 basis then it doesn?t save for retirement as your income can fluctuate so you could be tempted to cash out and incur penalties during dry periods if you don?t want to take on even more debt.

6 Critical Money Tips For Aspiring Entrepreneurs ? Entrepreneur

Starting a business is a wonderful adventure that many are eager to jump into. More than ever before, millions of people have easy access to fabulous financial tips. Do you feel ready to begin your business? It?s time to enlighten and equip your entrepreneurial spirit for the investment of a lifetime.

Here are 6 pro-tips to starting a new business:

  • Prioritize organization. Keeping files on track and staying organized are tremendous tools that save both time and money in the long run. For example, when recording current costs, consider categorizing them as ?urgent? and ?future?.
  • Check your credit. Nearly 30% of people don?t know their credit score, but the funding a new business receives is often dependent on the founder?s credit score.
  • Save where you can. Taking inventory of daily spending habits is an excellent habit to instill. Even something as simple as cutting back on latte buys is a good way to cut back costs.
  • Search for additional information. ?Soak up the best information in the business. Side hustles have become so mainstream that there is an abundance of information available for budding entrepreneurs right at your fingertips.
  • Set long term and short-term goals. Avoid the get rich quick mentality. Set short-term goals that lead you closer to long term results.
  • Find a mentor. Merging advice from leaders in the financial realm with personal practice are key ingredients to the alchemy of a strong entrepreneurial foundation. ?In the end, we get by with a little help from our friends.

The 30 Somethings? Financial Milestone Checklist ? Money

The path to prosperity is not always seamless, and sometimes it can be quite rocky. The good news is that there are many trailblazers who have carved an outline for others to follow suit. Preparation is a key to stand strong through the ups and downs of the economy.

Here are 5 milestones to keep in mind as you grow into stronger personal finances:

  • Have a budget to track your expenses and wealth. ?Budget? doesn?t have to be a dirty word! Keep it simple by tracking expenses with free apps like ?Mint or Digit. Simple visual aids like spreadsheets work well, too.
  • Have money for your retirement already in the bank. A snug retirement fund isn?t realistic by age 30, but saving across different stages of life will help. Pro-tip: Put a certain portion of your income in an employer?s 401(k) plan or retirement account at a bank like an IRA.
  • Have savings in case of emergency. Having an emergency fund of a few thousand dollars on hand is helpful for the many unplanned instances of life. Beyond saving for retirement, it?s great to be prepared for medical or car expenses, and keep yourself out of debt.
  • Have zero credit card debt. Pay attention to credit card debt and pay them off first as they have higher interest rates than student loans. Paying off your monthly minimums and keeping your balance below 30% of your credit line will keep your credit score safe, especially if you want to get loans in the future.
  • Designate beneficiaries on your accounts and life insurance. As odd as it sounds, preparing for finances beyond your lifetime is an important milestone. Make sure you have designated those closest to you as beneficiaries.

Should I Sell My Stock? 4 Situations Where You May Need To ? The Motley Fool

Stocks are an important supplement to any portfolio. And there are times when liquid savings are running low and relying on shares is necessary to cover emergency funds. But if you?re thinking of cashing out, it?s important to remember that you expose yourself to the possibility of brokerage fees, taxes, and lost growth potential. Nevertheless, there are crucial times in life when selling your stock might be the necessary choice.

Here are 4 situations where selling your stock might be the better move:

  • Your budget has changed. When there are major life changes that affect finances like maternity leave, for example, you?ll want to have another source of income without racking up credit card debt.
  • You have credit card debt. Oops. Credit card balances that are out of control are a no-go. While cashing out long-term investments for short-term debt should not be the first choice, it may be better to wipe the slate clean to avoid further credit score damage and budget issues.
  • You want to avoid loans. Personal loans can have major drawbacks, especially student loan debt. A parent, for example, could cash out investments from their employee stock purchase plan (ESPP) and it would allow them to avoid doubling the loan principal with accrued interest or increasing the debt-to-income ratio. Plus, the parent would have 10 years to make up the difference without the weight of debt on their shoulders.
  • You?re trying to earn bigger profit elsewhere. If you?re selling a stock in favor of a larger payoff, then that?s a smart move and the rewards are immediate. It?s tough to part with established investments but the benefits outweigh the risks in certain situations.

Side Hustle: ?Invest In Yourself ? Forbes

What if there was a way to make more money without changing jobs or asking for a raise. Sound too good to be true?

According to experts, there is a way to make more so you can skip settling for less.

This is where the term ?Side Hustle? comes into play. Author and entrepreneur Chris Guillebeau coined this idea in a book he wrote called Side Hustle: From Idea to Income in 27 Days. This is no get-rich-quick scheme. Chris actually derived the information from a series of case studies that reflect actionable steps people can take to make more money, even while they work at their 9-5 job.

What is a Side Hustle and why should you get one?

A side hustle is an additional stream of income beyond your day job. Having one source of income offers no job security. ?More income means more options, and more options give you more freedom. ?Whether you are an entrepreneur or simply seeking more financial stability, a side hustle works for anyone because it requires no MBA or even investors?it?s all on you!

Side Hustle Sidenote: This is not to be confused with a part-time job. A side hustle is about financial independence rather than solely relying on a job where the powers that be decide everything.

The potential for monetary growth is unlimited with side hustles. It could be anywhere from $500, $1,000, or $2,000 extra per month. Chris says he has seen a lot of people go down that road and make up to six figures or more.

What are some examples of a side hustle?

Of course, the possibilities are endless for outlets of income. Find something that makes you excited and most importantly, something that brings value into other people?s lives. This could look like piano lessons, designing shirts to sell on Amazon, or starting a photography business.

Money and scarcity no longer have to be in the same sentence. Ultimately, there is no ?one size fits all? for those traveling down their unique financial path. ?The best part about a side hustle is that the power to change your income status rests in your hands. This is a new era of investment and creating multiple income sources could mean the difference between sustenance and prosperity.

Photo by?NeONBRAND


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