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Fintech Freedom’s Top Picks For March 2018

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Fintech Freedom's Top Picks For March 2018

One of the things I enjoy most about the fintech and personal finance communities is reading all of the excellent content that other fellow bloggers produce. Here you will find our favorites from March 2018.

Personal Finance Posts

Since this is the first roundup edition some of these posts are not from the past week but I wanted to include them because of the amount of value I received from reading them.

The Financial Literacy Problem by the Visual Capitalist

With only a handful of states requiring that financial literacy is taught in the classroom, it isn't surprising to learn that 70% of 18-39-year-olds recognize they need to be more financially secure but don't know how to get there. The visual capitalist puts out amazing infographics on personal finance and this one caught my eye! This infographic not only points out the statistics around financial literacy but the impact that the lack of this knowledge has on individuals and families.

Inequality in the Stock Market by Ben Carlson at A Wealth of Common Sense

A look at the history of the stock market since the 1970's and a solid reminder why the stock market is still the place to be and why.

Control Personal Finance: 5 Influential TED Talks by GainInfinity

TED Talks are one of the great ways to gain knowledge. In fact, one of my favorites was one I had the unique opportunity to be a part of. It was delivered by my good friend Lawrence Lessig. This post outlines 5 TED Talks on personal finance that anyone could benefit from.

Credit score for mortgage: The good, the bad, and the ugly by Tony Tran at I Will Teach You To Be Rich

If you are in the market to purchase a home not only does this article briefly review the loan options but it also goes into the credit score brackets and breakdowns of where you should aim to be. If it were up to me – nobody would be focused on their credit score. Instead, the focus should be on getting out of debt and staying out of debt. After all, the only purpose of a credit score is to see how worthy you are of going into debt.Obviously, if you can avoid debt altogether you will be in a much better position throughout your life!

14 Shocking Statistics About The Things We Spend Money On by Making Sense Of Cents

Some of these statistics were shocking! For example, the average household has 300,000 items. Crazy! Oh, and nearly 10% of households waste spend money on a storage unit.

Real Estate Posts

4 Reasons Cryptocurrencies & Blockchain Technology Are Poised to Transform Real Estate by Christopher Gill at Bigger Pockets

I was at a conference this past Friday at Boston University on the future of money. The conference focused on the impact of the blockchain. It was informational and eye-opening. And yes, the blockchain will be transformative and Real Estate is just one of those ways!

Real Estate Crowdfunding Comparison List from InvestorJunkie

Hands down THE BEST real estate crowdfunding comparison list out there! There have been a number of new crowdfunding platforms coming on the scene in the last few years with the rise of the peer to peer and passive income platforms. If you are thinking about crowdfunding platforms this is a must see!

Passive Income Posts

How To Make Passive Income: A Guide for Real People from Millennial Money Man

This post was originally published last summer but it is one of the most comprehensive passive income posts I have come across.

Ranking The Best Passive Income Investments by Financial Samurai

Another post published prior to this week but certainly one I wanted to highlight. Sam over at Financial Samurai put together a comprehensive passive income list that he put a ranking system on. The ranking system ranked risk, return, feasibility, liquidity, and activity. Sam is another one of the many bloggers who develops fantastic content and I hope to meet at FinCon in September!

Speaking of FinCon…FinCon is an annual conference of personal finance bloggers. The conference will be in Orlando this year in September. It is organized in conjunction with Rockstar Finance which is the place that all personal finance bloggers spend their time (when we are not at FinCon that is) For me, I am looking forward to attending my very first fincon in September with CafeCareerCoach!

Living A Better Life Post(s)

Some Lessons For Living From Older Generations by Ben Carlson at A Wealth of Common Sense

Another from A Wealth of Common Sense…this one will help to put everything in perspective. Plus, a few wise bits of information that all of us can learn from!

Podcasts

Mr. Money Mustache – Living Beautifully on $25-27K Per Year by Tim Ferris at The Tim Ferris Show

Two great speakers and experts coming together.

Dave Rants About the Equifax Leak by The Dave Ramsey Show

If you are struggling with getting out of debt there is nobody better at helping you get out of debt than Dave Ramsey. Dave's daily podcast is always great but I found this one particularly entertaining and enlightening. If you like the podcast linked above – Never Give Up is another great one.

What Really Happens When We Die by The Word On Fire Show

Bishop Robert Barron is an incredibly inspirational and inspiring speaker. I always look forward to listening to the new Word On Fire podcasts when they are released.

Please share and subscribe if you have found this content to be worthwhile. I plan to do similar posts each and every week.

 

What is Peer to Peer Lending?

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What Is Peer To Peer Lending?

Peer to Peer Lending (P2P) – why does that sound like your aunt lending you money? Well, you aren’t wrong. It kind of is, just on a more formal level.

P2P Lending takes the banker out of banking. Investors lend money directly to borrowers through a website enabling both parties to benefit from the rate of interest established for each loan.

Why choose Peer to Peer Lending?

Savings. Do you want your money lining the pocket of a banker or in your own pocket?

Peer to peer lending makes it possible to reduce your debt for a lower interest rate then you would get through a traditional bank keeping more money in your wallet.

With a P2P loan, borrowers are able to save an average of 24% on interest rates when consolidating debt with a peer to peer lending corporation like Lending Club or Prosper..

Is there risk with P2P lending?

The risks are more as an investor then a borrower. As an investor, investments held through a businesses like Lending Club and Prosper are not bank assets so they are not insured by FDIC like bank assets would be. If the loan goes into default, you stand to lose a portion of your investment.

That said, companies like Lending Club and Prosper uses best practices to try and collect payments from delinquent borrowers, but there is still risk without the assets being insured.

What types of loans are offered?

Peer to peer lending offers several types of loans – personal, business and medical.

Each of these products offers different interest rates and terms but the personal loans can be used for nearly any purpose.

Personal loans can be used for credit card refinancing, debt consolidation, home improvement, major purchases, home buying, car financing, green loans, business purposes, vacations, as well as nd moving and relocating. Just be mindful that most P2P lending sites cap their personal loan amounts between $35,000 and $40,000.

If you are a borrower with a great credit score, P2P lending is a great option to keep interest rates low and repayment terms reasonable. If you are looking to diversify your investments than using popular online lending platforms such as Lending Club and Prosper are a great way to help do this.

 

How To Know Which IRA Is Right For You

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Which IRA Is Right For You? | FinTechFreedom

An IRA (individual retirement account) is an IRA, right? Wrong. Not all IRAs are created equal. Let's examine both in more detail.

Traditional IRA

A traditional IRA contribution is tax-deductible on your federal tax return for the year you make the contribution. 

How does the saying go? The only things you can’t escape are death and taxes. There are tax considerations for a traditional IRA even though the money you put into it isn’t taxed when you put them in.

You pay the taxes you pay on the traditional IRA money when you take the money out at retirement time. When you make a withdrawal it is taxed at your ordinary income rate.

The benefit to contributing to a traditional IRA is that it lowers your taxable income during the year you contribute which lowers your adjusted gross income. Conversely, when you take out the money in retirement you are most likely to be in a lower tax bracket because you are in retirement. For this reason, a traditional IRA is beneficial. However, this supposes that taxes will remain the same or not go up substantially in the future.

While traditional IRAs can be invested in many assets, there are some limits to the types of assets a traditional IRA can hold. This is true in the case of a 401K which from a tax perspective works in the same way as a traditional IRA.

Roth IRA

If a traditional IRA is taxed at the time of withdrawal, you may be able to guess how a Roth IRA is different.

A Roth IRA contributions provide no tax breaks when you put money into it, but withdrawals from it are generally tax-free.

Roth IRAs can be invested in any type of vehicle you want: index funds, lifecycle funds, individual stocks or alternative investments. There are income limits for Roth IRAs.

Which IRA is right for me?

Knowing which IRA is the best choice for you depends on your anticipated income at retirement. If you find that you are eligible for both Roth and Traditional IRAs, you are generally better off with a traditional IRA if you anticipate being in a lower tax bracket than your current tax rate when you retire. However, since it is impossible to predict what the rate of taxes will be in the future a Roth IRA can be substantially beneficial.

Withdrawal Rules

One major difference between Traditional and Roth IRAs is the age at which you withdraw funds.

Traditional IRAs require you to take a required minimum distribution (also known as a RMD) at 70.5 years old whether you need the money or not. Roth IRAs, on the other hand, do not have this age requirement. In fact, no withdrawals are required during the owner’s lifetime.

Roth IRAs become a great vehicle to transfer wealth because if you have another source of income, you can designate it to beneficiaries. Your beneficiaries also receive the income tax-free withdrawals although there may be estate tax considerations.

IRAs were created as an incentive to help you not only save on taxes but also as a way to save for your future. IRAs can be excellent tools to use not only for retirement planning purposes but also during your estate planning process.

What Is Real Estate Crowdfunding?

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What Is Real Estate Crowdfunding? | FinTechFreedom

Real Estate crowdfunding is not a new concept. Crowdfunding sprung into the mainstream in 2012 when Congress passed the JOBS Act. Prior to 2012 crowdfunding was popular for decades in Third World countries where banks were fewer and far between but business still needed to be conducted.

What is Crowdfunding?

Crowdfunding is a way of raising money without going through traditional banks. Similar to peer to peer (P2P) lending, crowdfunding works when investors pool their money with the intent to provide investment capital.

Used for both small business as well as personal purposes, crowdfunding websites make it easy to connect investors with new investment opportunities.

Real Estate Crowdfunding

With the introduction of crowdfunding platforms, online real estate investment has never been easier. As an investor, you can purchase a “share” of a real estate mortgage or loan.

Popular crowdfunding websites include:

 

Crowdfunding makes it easy for an investor to capitalize on investments in commercial or residential real estate without paying large sums of money.

Real estate offers unique advantages to the investor beyond a typical P2P loan. It offers the investor income, appreciation and tax benefits.

Real Estate Crowdfunding Categories

  1. Debt Deals – Your funds are being borrowed with the understanding borrowers will repay the loan with interest.
  2. Equity Deals – This type of crowdfunding vehicle puts investors in an indirect ownership position. This allows the investor to participate in the property’s excess cash flow as well as any appreciation that happens when the property is sold.

The P2P lending landscape has offered investors another option for diversifying retirement savings. Online platforms are making the world of real estate investing more accessible to investors who otherwise may not have enough capital in assets to work in this space. When choosing a platform, be sure the organization is transparent, attentive and able to declare a strong case for any offer. InvestorJunkie has put together a wonderful crowdfunding comparison chart for those interested in learning about the growing real estate crowdfunding industry. 

What Is The Sharing Economy?

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What Is The Sharing Economy | FinTechFreedom

Startups like AirBNB, Uber and Lyft have become common household names. Just a few years ago most people had never heard of these business names. These businesses represent  just a small portion of what is now known as the Sharing Economy.  

So what exactly is the Sharing Economy?

Sharing Economy 101

The sharing economy is an economic model in which individuals are able to borrow or rent assets owned by someone else who is not connected directly with a traditional brick-and-mortar storefront. The sharing economy is particularly effective when the price of a needed asset is high and sits idly allowing the owner to put that asset to use while at the same time giving the buyer the option to use the asset at a reduced cost.

The sharing economy has created a way of monetizing a practice we are taught as children – to share. As adults, we can share our assets while getting the benefit of earning an income from what we already own with others who wish to use them at a lower cost than what they might have historically spent within a brick-and-mortar business.

Sharing our goods and services with complete strangers has boomed since 2009 with the launch of AirBNB.

The peer to peer rental market alone is worth $26 billion. It is projected, to see growth upwards of $335 billion by 2025 due to its overwhelming popularity.

What Does The Sharing Economy Mean For Me?

The sharing economy means you have the opportunity to make money on assets you have but aren’t fully using.

Do you have a guest room that isn’t always occupied? Rent it out through AirBNB. AirBNB reports that hosts in San Francisco who rent out their homes do so for an average of 58 nights a year making an additional $9,300.

Do you have a car you aren’t using this weekend? Rent it out to someone who needs it through Turo. People who rent out their cars make an average of $250 to upwards of $1,000 a month.

‘Faces’ of the Sharing Economy

You are probably familiar with a few of these top performers, but here are just a few of the sharing economy companies you can learn more about:

  • DogVacay – dog owners can leave their dog with a host who will care for them with more comfortable accommodations than a traditional kennel stay.
  • TaskRabbit – need dog food but the baby JUST went down for a nap? Hire a person through TaskRabbit to make the grocery store run for you. From delivery to handyman to office help – TaskRabbit is an easy way to make a little extra money.
  • Spinlister – rent out your bike for the afternoon

Items you own have value and the sharing economy gives you an opportunity to make extra money with the items you already own.

What’s stopping you? Before paying full price check out the sharing economy and while you’re at it put some extra money in your pocket with what you already have just laying around.

5 Lazy Ways To Make Saving Easy

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Saving - 5 Lazy Ways To Save - FinTechFreedom

Maybe lazy is too harsh a term, but who has time to focus on saving?

All too often saving goes out the window because we are busy and it is one more thing on the “to do” list to make a conscious effort. The reality is that most full-time workers live paycheck to paycheck. 

Save time and money with a little help from 5 of your newest friends:

Paribus

Paribus puts money back in your hands on the online purchases you are already making with no effort from you. You’re probably thinking – no way. How does that work?

Paribus makes it easy. It is free to sign up and it gets right to work scanning your emails for receipts. If it discovers you made a purchase from one of the retailers listed on their website, it will track the item’s price. If the price drops, Paribus requests a refund for you – automatically!

See? You really don’t have to do anything.

Dosh 

Dosh is the definition of hassle-free cash back. Sign up for the app and tie it to a debit or credit card (did we mention you get a $5 bonus just to sign up?)

Make purchases with this card at over 100,000 hotels, online stores, and restaurants. Watch as your cash back rolls in.

Shopkick 

Download the Shopkick app and go shopping! Once you sign up the app pays you for “kicks” for walking into participating stores (Amazon, Walmart, TJMaxx and many more.)

Your kicks count increases for scanning items in the store and purchasing them with a connected credit or debit card.These kicks can be redeemed for store gift cards.

Trim 

Don’t lose time negotiating monthly bills with service providers, let Trim do that for you.

Sign up with Facebook and upload a PDF of your recent bill. Trim gets to work negotiating your rates for you and it will continue until you save money. Trim works with Time Warner, Comcast, and other major providers.

Phil

Do you love going to the pharmacy? I can imagine that you are with the 50% of Americans who take prescriptions and share the “joy” of standing in line at the pharmacy.

Stop wasting time in line with Phil – the online prescription delivery system. Phil coordinates with pharmacies, doctors and insurance providers to fill your scripts and ship them to you to the tune of your usual copays – delivery is free.

Download. Attach. Save. It is really that simple – so get saving!

Saving Can Be Easy.

Saving for your future has never been easier thanks to the increasing number of innovative online fintech companies.