It’s a question few know the answer to, but many ponder: What’s the difference between a credit union and a bank? On the surface, both types of organizations seem to do the same thing. You give them your money and, when you need it again, they give it back.
Both credit unions and banks also offer other perks and services. You can turn to either institution when you find yourself in need of a mortgage or auto loan. You can also earn interest on any money you have tucked away in a savings account.
So, with all these similarities, what really is the difference between a credit union and a bank?
What Is a Credit Union?
Choosing which bank to trust with your money is never easy. But you also need to ask yourself one other question: Why not “bank” with a credit union instead?
Before you can decide which establishment is right for you, you first need to learn the difference between a credit union and a bank.
So, when you bank with a credit union, you’re not just a customer. That’s right. You’re also a co-owner. And that doesn’t just mean you get the privilege of a fancy title, either.
Because there are no shareholders expecting dividends and returns on their investments, all proceeds go right back into the credit union. That also means that all members have the right to vote on how this money is reinvested back into the credit union.
Most of the time, that translates into lower fees, higher interest on savings accounts, and other valuable benefits.
Credit Unions are Cooperative
Are you wondering how a credit union operates without an owner or investors? It’s actually quite simple.
You see, credit unions do have investors (just not in the same sense as a traditional bank). By investing their own money, normally in the form of a minimum savings account deposit, a credit union’s members act as the investors.
If you like, you can invest more than just your money into your chosen credit union. Members can run for appointment to the board of directors of their credit union, giving them even greater say over how the union invests its earnings.
Whether you invest a little or a lot, in the end, a credit union is built on cooperation.
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Credit Unions are an Identity
One other significant difference between a credit union and a bank is that most credit unions only serve certain people. On the other hand, banks will take almost anyone as a customer.
While credit unions offer an opportunity for all members to own a share of their banking institution, that doesn’t mean just anyone can join. Instead, most credit unions have a certain set of membership criteria that must be met.
For example, some credit unions only accept members who live within a certain area. Others, though, may only accept members who work within a specific profession.
In many cases, these limitations actually benefit credit union members by narrowing the scope of the union and how it invests its resources. When everyone shares a common interest, earnings and other resources can be used more effectively.
The Birth of the Co-op and the First Credit Union
To really understand the difference between a credit union and a bank, we need to take a step back in time to the very first credit union. For that, we need to visit the end of the 19th Century.
During the late-1800s, the cooperative movement was all the rage in Europe. This movement started when a group of gentlemen opened a cooperative store in Rochdale, England.
The store sold normal things like butter, milk, and eggs. But one key fact made it different than any other store of the time: instead of one owner, the store was owned by a “cooperative” of co-owners.
And this trend didn’t end with grocers and other retail stores. In 1864, the first modern credit union opened in Cologne, Germany.
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It wouldn’t take long for this idea to jump across the pond, either. In 1909, a credit union opened stateside in New Hampshire. Then, 10 years later, Massachusetts formally recognized credit unions and wrote legislation providing a framework for them to operate.
Shortly after, credit unions gained considerable favor when the Great Depression destroyed the trust most citizens had in traditional banks. While banks collapsed under the recession, credit unions remained relatively untouched by the economic collapse, and people turned to them in droves.
Today, the National Credit Union Administration oversees one hundred million credit union accounts within the United States. That adds up to one account for almost a third of the country’s residents!
What You Really Need to Know About the Difference Between a Credit Union and a Bank
Clearly, credit unions and banks share very little when it comes to their histories and guiding principles. In modern times, though, what is the practical difference between a credit union and a bank?
Ultimately, it boils down to how profits are created and used. However, the subtle differences between being a customer and a member can also have a major impact on your banking experience and long-term financial goals.
If you’re unsure which of these financial institutions is right for you, here are the factors to consider before making a decision:
Show Me the Money
Have you heard the saying, “Follow the money?” You probably have at some point in your life.
When it comes to understanding the difference between a credit union and a bank, you need to follow the money. Or, more specifically, how the money is handled. After all, these two institutions manage your money and make money for themselves in vastly different ways.
Let’s start with traditional banks:
Traditional banks are privately-held, for-profit ventures. In other words, banks exist almost exclusively to make a profit for their owner or shareholders. But how do they accomplish this goal?
Most of these earnings come from financial services, both for individuals and for businesses, offered by the bank.
Anytime you pay a fee or are charged interest by your bank, this money goes into the bank’s earnings. From overdraft fees to paying interest on a credit card, there are countless ways banks profit from their customers.
Now, let’s turn our attention to credit unions:
Since credit unions don’t strive to make a profit in the first place, there’s little motivation to charge high fees for basic services.
Of course, credit unions still need to bring in some earnings. If they don’t, there’s no way to pay the employees or cover the cost of their building. With that said, credit unions don’t feel the same pressure to maximize earnings from an owner or shareholder.
While no two institutions are alike, it’s easy to see why credit unions seem to care more about their customers than most banks.
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Jump in the Deep End
The next key difference between a credit union and a bank has to do with how your money gets managed.
At a traditional bank, your money effectively becomes the bank’s money. When you deposit money into a checking or other type of account, the bank turns around and invests that money themselves (in most cases, making a profit). When you later withdraw your money, it comes from a pooled reserve the bank keeps on hand.
If you paid attention during class when learning about the Great Depression, you might remember something called a “run.” So, what is a run? And what happens if there’s a run on your bank?
Since banks invest the money deposited by their customers, banks don’t technically have access to all of this money at once.
If most of the bank’s customers attempt to withdraw all their money at once, a bank run occurs. When this happens, the bank in question often closes down — whether the customers actually get their money is another question entirely.
Service with a Smile
Another major difference between a credit union and a bank is the quality of service. Since credit unions aren’t driven by profitability, many credit unions spend more on their employees than some banks.
In fact, according to a 2018 study of banking customers, 92 percent of credit union members said they were “very satisfied” with their experience.
Of course, many banks offer acceptable customer service. And some credit unions likely offer some pretty terrible service. But, in general, credit unions tend to reign supreme in this regard.
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Location, Location, Location
During your time learning about the difference between a credit union and a bank, you might think things are looking pretty strong in the credit unions’ favor. But there is one key area where banks come out ahead.
When you do business with a traditional bank, especially a regional or national chain, you’ll likely find branches all over the place. It’s not always that easy when you bank with a credit union.
Many credit unions have a very limited number of branches (some even only have one!). That isn’t a big deal when you’re home, but it can definitely turn traveling into a logistical nightmare.
Some credit unions have banded together to offer an extended network to their members. If your chosen credit union is a member of a shared branching network, you can visit any participating branch around the country.
Still, this isn’t as convenient as a national banking chain like Wells Fargo.
Choose the Financial Solution That’s Right for You
So which is better for you, a credit union or a bank?
When looking at the difference between a credit union and a bank, it may seem like credit unions are always the best choice. But if you travel often or like the flexibility of being able to find a branch almost anywhere, a large bank might be better.
That being said, many people prefer the approachability of a credit union to a traditional bank.
Whether you need a mortgage, to invest, or simple day-to-day banking, many credit unions offer more than a regular bank. In the end, though, the choice is entirely up to you.
Do you currently use a traditional bank or a credit union? Let us know your experiences in the comments below!
What’s the first thing that comes to mind when you think about retirement? If you’re a teenager or in your early 20s, you probably think you’re too young to think about that. And if you’re in your 50s, it’s more clear that you need to start thinking about retirement. According to the best retirement books, you’re never too young to think about retirement and the good news is, it’s never too late to start!
Thinking about retirement can be scary, especially if you haven’t taken the necessary steps to finance your life after retiring. But imagining the worst-case scenario won’t help you one bit.
How about reading the best retirement books to learn how to build a happy and financially secure life after retirement?
How to Choose the Best Retirement Books
There are a plethora of retirement books on the market today, which makes identifying the best retirement books a challenge. However, if you know what to look for, finding one for your needs will be a walk in the park. So let’s find out some of the things you should consider.
It doesn’t have to be boring
The majority of people believe retirement books are filled with investment jargon and endless pages of boring stuff you won’t understand without a degree in finance. But that’s not the case.
Many retirement books employ an engaging and fun tone that keeps you turning the pages while learning important stuff. So don’t waste your time on a book that puts you to sleep within the first pages. At that rate, you’ll retire before finishing the book, and we wouldn’t want that!
How close are you to retirement?
Apart from choosing an exciting book, it’s also essential to consider how close you are to retirement. Young adults have the luxury of time and can, therefore, take advantage of compound interest and take more risks.
Older investors, on the other hand, can’t afford to risk their money in risky investments. They have to take calculated risks to ensure their money is safe in the long run.
For this reason, make sure you choose the best retirement books that address where you are in life. And avoid books that provide a one-size-fits-all approach because they’ll most probably not work.
An honest retirement book will tell you that retirement planning is a long and intense process that requires discipline and patience. However, not all retirement books are reliable or honest.
Some investment “gurus” will try to sell you on the idea that it’s possible to retire in only five years and become the next Bill Gates without doing much. Be wary of such books because they’ll only mislead you and waste your time.
It’s also crucial to rely on up-to-date investment advice. If your grandparents read the investment book you’re considering, there’s a high chance you won’t benefit a lot from the book because it contains outdated information.
Go for recent books that take into account current changes in the market, using technology for savvy investments, and other factors that may affect your financial security.
How We Reviewed
We’re big on having a happy and financially secure retirement. And we’d like you to enjoy a similar experience in your retirement as well.
We, therefore, scoured the internet in search of the best retirement books to get you started on your path to financial freedom. We considered the best sellers, the top-rated books by readers, and the most recommended books by finance experts. And we didn’t stop there.
We also took the time to find out what each book has to offer to know if they would be helpful in your retirement journey.
Top 10 Life-Changing Retirement Books
After a thorough evaluation, we managed to come up with 10 of the best retirement books for the money. Whether you’re a young adult or approaching retirement, we’re confident you’ll find the lessons in these books life-changing. So let’s dive right in.
1. How to Retire with Enough Money
Most people in their pre-retirement stage have poor saving and spending habits. In fact, the majority of people live from paycheck to paycheck. And the sad part is, they don’t know how it happens.
And that’s why we love this book. In this book, Teresa Ghilarducci, an economics professor and retirements savings specialist, explores the different reasons why people have a hard time saving and breaking bad spending habits.
She also gives you a simple guide on how to take control of your finances and plan for retirement without losing your hard-earned money on expensive financial planning services.
If you want to retire with enough money, this is the book to get. Buyers rated it 4.1 out of 5.0 stars.
2. How To Retire Happy, Wild, and Free
Retirement seems like a magical time. You don’t have to wake up at insane hours of the morning to go to work, raise any kids, or stay up all night responding to work emails.
But the magic disappears very fast, and you may begin feeling like your life no longer has a purpose.
It’s for this reason that many people dread retirement. If you’re sailing in the same boat, you’ll love this Ernie J. Zelinski book.
Unlike most authors who focus mainly on saving and investments for retirement, Ernie drops some wisdom on equally important stuff like how to follow your dreams and live to the fullest in your retirement.
He also teaches you how to invest your money intelligently, so that you won’t need millions to secure your future.
Amazon buyers can’t stop raving about this book. They rated it 4.3 out of 5.0 stars.
3. The 5 Years Before You Retire: Retirement Planning When You Need It the Most
Five years before retirement is, without a doubt, the ultimate crunch time. You’ve got five years to get it right, or you’re screwed.
Emily Guy Birken is the author that comes just in time. She gives you practical advice that you can implement in only five years to secure a happy and secure life after retirement.
The author explains how to make wise family, medical, and financial decisions as you approach retirement. She also emphasizes the importance of taking advantage of real estate and 401K retirement plans at this stage of your life.
If you’re currently dreading your retirement because you’re not well prepared, this book will give you the confidence you need. Buyers have attested to its effectiveness. They gave it a rating of 4.3 out of 5.0 stars.
4. How to Retire Happy, Fourth Edition: The 12 Most Important Decisions You Must Make Before You Retire
They say experience is the best teacher, and Stan Hinden uses his own to share the approach that worked for him in creating a happy retirement life.
This book is easy to understand and offers practical tips on financial planning for retirement and other important information like how to maintain emotional and mental health.
Amazon buyers believe this is one of the best retirement books you can read. They rated it 4.2 out of 5.0 stars.
5. The Total Money Makeover: A Proven Plan for Financial Fitness
If you’re looking at your credit card and student loans and thinking there’s no way you’re ever going to achieve financial freedom, this is the book for you. It’s written by Dave Ramsey, one of the most recognized names in investing and finance.
Dave emphasizes one thing, stop bad spending habits, pay off your debts, and start saving for the future.
He teaches you practical steps to getting out of debt and gaining financial freedom. And the best part is that there’s no finance jargon involved and you don’t need you to be an expert to do it.
If you want to get out of debt before thinking about your retirement goals, you’ll find this book very informative and useful. Buyers gave it a rating of 4.7 out of 5.0 stars.
6. Women’s Worth: Finding Your Financial Confidence
Women have it harder than men when it comes to attaining financial freedom. From the challenges of having to leave work to raise their kids to getting lower salaries compared to men, the journey can seem impossible.
Eleanor Blayney comes to your rescue with incredible tips that help women take control of their finances and catch up with their retirement goals.
She maintains an empathetic tone while encouraging you to go for your goals because it’s within your power to do it.
If you’re a woman who’s currently overwhelmed by your finances and don’t know how to build a happy life in retirement, you won’t want to put this book down. Buyers say it’s a page-turner. They rated it 5.0 out of 5.0 stars.
7. Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence
If you’re looking for a fun and engaging read that will inspire you to make a difference, Your Money or Your Life by Vicki Robin will live up to your expectations.
This book offers broad-based financial advice and is, without a doubt, a fantastic read. It focuses on helping the reader to adjust their priorities by focusing their energy on what matters most, investing money in appreciating assets.
We also love that the book has charts, photos, and graphs that help drive the points home even more clearly.
It’s comprehensive and a perfect companion for a new investor. Amazon customers rated it 4.3 out of 5.0 stars.
8. The Smartest Retirement Book You’ll Ever Read
We’ve all come across books with such titles. They talk a big game but fail to deliver. But this book is different. It lives up to its title.
Daniel R. Solin uses simple language to explain different ways to live a happy retirement life.
From teaching you how to avoid common investment scams to guiding you on how to ensure your money lives longer than your lifetime, this author drops some gems of advice you’ll always remember.
It’s among the best retirement books for beginners who know nothing about retirement planning. It will help you evaluate and understand suggestions given by your financial planners.
Amazon buyers can’t stop raving about this book. They rated it 4.2 out of 5.0 stars.
9. Winning at Retirement: A Guide to Health, Wealth, and Purpose in the Best Years of Your Life
This book is among the best retirement books that take a modern approach when it comes to retirement planning. Patrick Foley and Kristin Hillsley teach you how to take advantage of technology, TED talks, and other resources at your fingertips to plan for your retirement.
The authors are entertaining, inspirational, and practical, and what makes them stand out is that they touch on other areas of retirement, such as health and ways to make the most of your retirement years.
You won’t be dreading retirement after reading this book. Amazon gave it a rating of 4.2 out of 5.0 stars.
10. How to Make Your Money Last: The Indispensable Retirement Guide
For most people, trying to make money last longer in retirement is like eating soup with a fork — impossible. If you feel the same, this book by Jane Bryant Quinn will give you hope for the days to come.
Jane takes a different approach. She teaches you how to keep your pot overflowing in retirement. From investing, taking advantage of social security, and lessons on how to grow your money, this book will give you confidence in your retirement years.
Amazon buyers recommend it as one of the best retirement books. They gave it a rating of 4.7 out of 5.0 stars.
The Time Is Now
Retirement seems so far, especially when you’re starting your career. But it’s at this time that you should be thinking about retirement planning. When you start early, you’re in a better position to take significant risks, and more likely to make a fortune.
But as we said, it’s never too late to start. So don’t waste any more time, get one of the best investment books on this list and build a great retirement life.
Have you read any of these retirement books? Were they helpful, and would you recommend them? Please share your thoughts and views in the comments section below. We’d love to hear from you.
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When it comes to managing your finances, you have to understand the question, “what is the opportunity cost of an investment?” This consideration allows you to assess the attractiveness of an investment better.
So what is the opportunity cost of an investment? Opportunity cost is simply the required sacrifice in achieving some gain. For example, a part-time student worker faces the decision of whether to work or study. If the student worker chooses to study, they must forego the benefits of working for this time. So the opportunity cost of studying is the amount of lost wages they could have earned while working for this time.
As another example, imagine you’re making the decision between purchasing two different drinks. The opportunity cost is the lost opportunity at whichever drink you do not pick.
The opportunity cost of an investment works the same way. It represents the value of other investment options available. Investing today is a complex minefield that requires careful decision making. So, there are many additional factors we must consider in determining the opportunity cost of an investment.
What Is The Opportunity Cost Of An Investment?
Opportunity cost is the benefit that an investor or business doesn’t acquire when choosing one investment over another. You usually won’t find the opportunity cost of an investment in the financial reports. However, it’s still crucial to know so you can make better decisions when presented with multiple options.
Ask yourself if your money and time would be better off somewhere else. International finance can be extremely volatile, and you need to keep constantly aware of emerging trends. So, it’s essential to not only examine individual investment decisions based on their own merits but also to consider alternatives to the opportunity in question as well.
This perspective entails a higher degree of risk due to the dynamic nature of markets. It can be difficult to compare investment options, so the risk is an inherent factor in opportunity cost.
Opportunity cost vs. risk
While these terms closely relate, risk and opportunity cost feature key differences. Risk is “the potential drawback from a business or investment decision.” On the other hand, opportunity cost covers the gain and disadvantages you can reap from an investment. So risk involves an element of surprise, while opportunity cost features aspects of sacrifice.
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Looking at investments
When comparing your potential investments, you have to factor in its profitability. By looking at the option that will give you the highest return, you should be successful. However, this isn’t all you should keep in mind.
As a business-minded person with a set amount of money, you must choose between investing your funds in a new venture or buying new equipment. Whichever option you choose, the potential profit you miss by not investing in the other choice is the opportunity cost. And this idea is essential when considering an investment.
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Examples of opportunity cost
What is the opportunity cost of investment? To make this principle easy to comprehend, you have to apply it in real life. Think of a building owner who decides to invest $10,000 by building a convenience store on the second floor of his building. The opportunity cost of this business decision is that he will no longer get income by renting this space out for as office space.
This concept isn’t only applicable to investments. It also applies to business decisions. Let’s say a farmer chooses to plant mango seedlings on a particular patch of land. As a result, the space and money spent on seedlings can no longer serve to grow other crops such as tomatoes or coconuts. The opportunity cost of growing mangoes on a finite piece of land is that the other crops cannot grow simultaneously.
Another example is someone with $10,000 in savings. Suppose this person can either invest their money in a car coating company or use the money to get their graduate degree. If this person uses their money to invest in the car coating company, their opportunity cost is the lifetime earnings and benefits of completing their advanced degree.
Positive Or Negative Opportunity Cost
Opportunity cost can either be positive or negative. For example, a farmer may make more money by selling mangoes compared to planting cucumbers or tomatoes. The opposite can also happen. There are a lot of factors in the market during the planting season that could make mangoes more or less valuable.
While many people only think of money when considering what is the opportunity cost of an investment, you need to consider additional resources. These resources include labor, time, and the required workload of managing the investment.
For instance, the farmer can choose to plant one crop over the other, but he might spend more on labor during planting and harvesting times, depending on the crop. The opportunity cost of the labor-intensive crop isn’t just financial; it also includes the time and money he spends for people working in the field.
Applications of opportunity cost
In assessing the attractiveness of an investment, you must consider all its possible outcomes. Any responsible investor would consider these negative and positive effects during the decision-making process.
Although no one truly knows what the future holds, you have to realize the opportunity cost of an investment so you can weigh the expected results of the available options.
While the examples listed above make sense to building owners and farmers, it can also have equal importance in regards to investments. If you know what is the opportunity cost of an investment, you can apply it to all areas of investments that involve the use of resources. Whether it’s investing in your inventory stock or thinking about your storage space, learning how to assess your options is important.
Why Opportunity Cost Is Important
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Understanding the basics of “what is the opportunity cost of an investment” is similar to mastering trade-offs, one of the foundations of economics. This knowledge is not only valuable in business and investing, but also in your daily life.
Once you make a particular choice, you say goodbye to other options. So you need to factor in opportunity cost when making any decision.
How To Calculate Opportunity Cost
There is no single mathematical formula used to calculate what the opportunity cost of an investment is. However, you can still approach this problem using mathematics.
Measuring opportunity cost leads to better decision making. To know this, you have to note what you are sacrificing. Will it be a change in your lifestyle or finances?
Factors to consider in calculating the opportunity cost
To know the opportunity costs, you have to consider the three factors of time, money, and sweat equity.
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In terms of money, the opportunity cost is rather straightforward. Ask yourself what else you would do with the funds you are about to spend on your decision. The alternative use of your money is the opportunity cost of an investment.
A farmer who spends $5,000 on tractors owns the equipment but will lose the use of their capital. That same money could hire a part-time employee during the busy season or even open a new store. So these options represent the opportunity cost of buying the tractors.
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If you invest your time in your own business, you have to factor in the effort required to make a business work. That effort can either lead to a successful business venture or be a missed opportunity by dedicating your time working for another company.
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Money and effort are not the only commodities you have to keep in mind. You also have to factor in time. In determining the opportunity cost, time is sometimes more valuable than money. When making an investment decision, think of the time required or saved by a particular investment opportunity.
The formula for calculating the opportunity cost
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Dollars cannot account for all aspects of value. And you can find out the opportunity cost in terms of satisfaction or even time. To determine your opportunity cost, use the ratio of what you are sacrificing and gaining.
This method will allow you to evaluate the ratio between two or more choices to estimate opportunity costs.
Examples of opportunity cost of an investment
You can figure out the opportunity cost by factoring in what you sacrifice over what you gain. In the investment example mentioned above, a person is sacrificing either the benefits of possessing a graduate degree or the profit they can make by investing in a car coating company.
Here’s another example. Vin has $$ worth of stocks in a food company, which he can sell for around $30,000. He initially wanted to wait six months before selling his shares since the stock price is likely to increase. However, imagine he decides to sell his stock now. To calculate its opportunity cost, you need to estimate the stock’s value in six months.
Suppose the stock value increased to $$$ in six months. Now, it is possible to determine the opportunity. In this case, the opportunity cost is the difference between the current and future value of the stock. So, the opportunity cost is $5,000 in this example.
Investing Is Now Easier
Investors always face options on where to put their money to receive the most significant return. In today’s business landscape, calculating the opportunity cost of an investment is a required step in assessing a business or investment decision.
Opportunity costs exist everywhere and are both big and small. This concept doesn’t just apply when answering the question, “What is the opportunity cost of an investment?” — it applies to many major decisions throughout your life.
Think about what would have happened if Steve Jobs did not start Apple and decided to stay at IBM. Then, important technological investments may not have come to pass or come in a timely fashion. So be sure to consider opportunity cost as you face your next decision.
Do you have your own experience that relates to calculating what is the opportunity cost of an investment? We’d love to read about it in the comments below!
Do you want to learn travel hacking 101? Believe it or not, you can save money while traveling! That’s right, and you do not have to pay top dollar for lodging or your flight. I don’t know about you, but that means more traveling for my family. And there is no better way to make some memories.
And even better, there are so many ways to save money and get upgraded.
What is travel hacking, though? And how can you make it happen?
What Does Travel Hacking 101 Entail
Travel hacking 101 means being able to find the best deals for every trip you take. Whether it is for a flight, hotel, cruise, train, or rental property.
There are some great tricks into finding the best value for your trip. Sometimes, it may require you to do a lot of research and possibly yelling at your computer screen, but it’s worth the time.
Travel hacking 101 is used for so much
There are people who may think travel hacks are only for flights or hotels, but it can be for so much more.
Saving as much money as possible for everything you use or do on vacation is crucial.
Did you know if you pack less and wash while you are away, you can save a ton of money? That’s right; airlines charge you an arm and leg for an extra bag. However, carry-on bags are usually free, so that may be a great choice if you are only going on a trip for a few days.
Besides, the less you carry around with you, the better it is for your stress level. You will not struggle as much to carry your bags. Also, finding your luggage at the baggage claim area is a major pain. I hate standing around watching the carousel of luggage go around and around, only to realize my luggage is not there.
Also, carry-on bags that are simple and small to hold your personal care items. This can make finding your things incredibly easier, and you will not throw away as much because it will be the perfect size for the trip.
Depending on where you are staying and what type of storage you have, will depend on how you can save money.
If you are staying in a hotel, try to find deals that include breakfast and free parking. Also, if your hotel has a stove and refrigerator then shopping at the grocery store and buying food will save you a lot of money.
Food and lodging eats, no pun intended, up a significant portion of travel budgets. You could use that extra money towards shopping or other activities you may want to try.
Or if you are staying in a campground, try to save your leftovers for the next day. You could also borrow a friends camping supplies instead of buying everything new.
During vacation, you will still need to stay in touch with the world unless that is why you are a vacation. Having a portable wifi device can save you a bunch of money. Not only is finding a hotspot a pain the rear but it can be almost impossible in some places.
You can simply carry around a small device to make getting wifi so much easier, and it should cost you a lot less than those long-distance calls if you are traveling overseas.
Now, I love to shop, like really who doesn’t, but I’m not going to lie, I have purchased a lot of things on vacation that I never use.
So, to save a little money, think twice about buying that fur coat if you live in Florida.
When booking a place to stay, you may find great deals online. You can also take those online results to your local travel agent, and they may be able to find you even more discounts.
There are many websites out there but depending on if you are looking for a hotel, cabin, vacation home, or going a little rugged staying in a tent, will determine which website is best. Expedia, for example, often gives their members a percentage off of the lodging.
And if you know someone who works for a hotel chain like Hilton hotels, then you could check with them and see if they can add you to their friends and family account. Oftentimes, hotels give large discounts to their employees.
You may have heard that booking your flight on certain days of the week will save you money. You may have even heard to fly out on certain days, but this is not always 100 percent true. I have booked many flights online on a Friday and rechecked to find the same price on the following Tuesday. Weekend flights are usually more expensive, though. So, if it is possible to fly during the week, that is the best route to take.
This is also something you can take to your local travel agent and see if they are able to find a better discount.
I have found with all my international traveling that using the local bus, is much cheaper than the taxis. If you do not mind being crowded with complete strangers, then traveling this way is the cheapest.
Also, if you are able to walk to your destination, then that can be a relief for your wallet. Now, we know not every place you travel will have clean, safe local transportation, but it is worth a shot.
The Major Need for Travel Hacks
Almost everyone loves to travel and save money. If you are able to get enough taken off of that flight to afford an upgraded hotel room, then all that research was worth it.
I am a mother of five kids, and when we fly internationally we spend around $2,000 for just the airfare. We try to find every discount we can with transportation to our vacation home. We make sure to wait to eat until we get to our place, instead of buying the overpriced food on our flight. By doing simple things like that, we are able to save enough money to do some sightseeing.
Types of travel hacks
One of the best travel hacks is Google maps offline. I have been stranded on the side of the road many times because my phone has lost signal. If you download the map before you start your journey, it will make your day less chaotic, for sure.
My husband’s favorite item to take everywhere he goes, is a pen. I know right, why is a pen such a big deal? Well, he travels internationally at least twice a year, and the flight attendants always have forms for you to fill out but never any pens!
Another great travel hack is baby powder. Baby powder can be used for more things other than your baby’s bottom. You never know how long your layover will be, and using a little baby powder to freshen up may make you feel a lot better.
Also, don’t forget that purchasing your tickets to some places in advance can save you some money. Not only could you save money on the tickets, but you also do not have to wait in the long line to get in.
We also think having a reusable water bottle is terrific. Not only does it help the environment, but you don’t have to constantly buy bottles of water.
Finally, don’t forget to do an internet search of all of the free places to visit in the town you are going to. For example, my family was recently in Asheville, North Carolina and there are roughly 50 free waterfalls to visit in the area. Also, free botanical gardens, tons of hiking trails, and more.
How to Find the Best Travel Hacks
Of course, doing a lot of research will find you the best deals.
Many credit card companies give travel bonuses and money back if you meet the requirements on time. You may not like all those emails about promotions until it is time to use them, but they are great. Most airlines have deals, even free flights, so try to have an open mind when you sign up for their advertisements.
Also, adding companies to your social media will help you know when a big deal may be going down. Yes, the deals may not come every day, but you do not want to miss a big one.
The traveler in the YouTube video below finds many benefits of using Ebates for all her purchases online. Please take a moment and let her explain how it works. Plus, she has a few other travels tricks up her sleeves that may help you on your next trip.
Benefits of Knowing Some Travel Hacking 101
The benefits of knowing travel hacks is saving money! The more money you save, the more trips you can take. If you have saved tons of money, then you will not feel bad about how much money you spend while shopping.
My mother has worked hard her entire life. Her biggest regret is not traveling enough, and always worrying about her credit score. We are not saying to stop paying your bills. Just to remember it is okay to do something for yourself every now and again.
My family and I love to travel, but with five kids, it can be very costly. So, every dollar we save on one trip goes towards our next trip.
Travel hacking 101 can take some time to learn, but it is worth the time you spend learning it. There are so many surprising ways to save money while you travel. Please do not stress too much when you start your next vacation. Remember, it takes time to learn all the tricks.
What is the best travel hack you have used? Please let us know in the comment section below.
Are you wondering how to read a 10-K effectively? Warren Buffet is famed for being one of the world’s wealthiest men and the single most successful investor of the 20th century.
However, the one thing that always stands out is his ability to spend five to six hours a day reading. What’s more, 10-K reports top his list.
So how do you go about finding worthwhile investments? Perusing 10-K reports should be one of those items to check. At a glance, they can seem bulky, but knowing what to look for is a great start to learn how to read a 10-K.
What Is the 10-K Report?
A 10-K is an annual filing that public traded companies are required to submit to the U.S. Securities and Exchange Commission (SEC).
It offers a detailed picture of the company’s activities, subsidiaries, and the risks it faces, as well as the operating and financial results for the fiscal year.
The 10-K report has to be filed within 60 days after the end of the fiscal year. You can find a company’s 10-K report by using the SEC’S EDGAR database. But some companies post their 10-K reports on their websites.
Difference between an annual report and a 10-K
A 10-K has more detailed information than the annual report. An annual report is more for shareholders to view. It does have information related to the company and financial reports.
And while it is designed to report fiscal happenings, the main purpose is to encourage more investing.
The 10-K is an official report for the SEC in a standard format. It also has a letter from the CEO or chairperson and illustrations. Plus, it does have more information, but it isn’t designed to impress. It’s only meant to report, and it hits areas you won’t find in an annual report.
Some companies can file the 10-K as its annual report while others may provide both the 10-K report and an annual report to the SEC.
How to Read a 10-K: Breaking It All Down
To help you learn how to read a 10-K effectively, you have to understand that, as mentioned, these reports follow a strict format that’s determined by the SEC. It also helps to know how to spot financial monkey business, but that’s for another time.
All information is presented in 4 main categories that are broken down into 15 subheadings.
Let’s look at the four key areas that a 10-K report covers.
How to read a 10-K: company overview
An efficient way to tackle a 10-K report is by reading the business description. It provides a fundamental analysis of the company’s economic purpose, products or services, some sense of its history and the competitive conditions it operates in.
In this section, you’ll also find the risk factors, which involves an explanation about significant risks that apply to the company and its securities. The company should address the risks and not how it applies to them. Each risk is titled in bold, then its description follows.
This section also includes the unresolved staff comments where the company explains the comments received from the SEC staff on reports filed previously that have not yet been resolved.
A red flag most investors look for here is if the SEC has raised questions about the company’s unresolved statements.
The company overview section goes on to cover properties and legal proceedings that add to the overall picture.
How to read a 10-K: business discussion
In the business discussion, you’ll find out the company’s stock price and performance as well as the number of shareholders within the company. You will also read about certain financial information about the company for the last five years.
In addition, this is where you’ll read about the management discussion and analysis. Management provides the company’s perspective about business results for the past year.
You’ll also get to pick the brain of the current CEO and get a sense of the direction the business is going.
Information about the company’s operation and financial results are in this section. You will be able to find out its capital resources, liquidity, and how the company views its key business risks and what it’s doing to address these issues.
The disclosure about market risk here refers to risk related to interest rates, foreign currency exchange rates, commodity prices, market exposure, as well as stock price risk.
You’ll also get audited financial statements, exhibits, and disclosure about the disagreements, changes in company accountants and accounting procedures.
How to read a 10-K: involved parties
This section provides background information and experience of the company’s director and executive officers. It also offers insights into the company’s code of ethics and qualifications for its committees of the board.
You’ll also find a detailed discloses the company’s compensation policies and pay levels of the top executive officers. Similarly, you’ll get information about shares covered by equity compensation plans and whether each company director is independent.
This section also requires companies to disclose the number of fees they pay to their accounting firms for various tasks. Most companies provide a separate document for this step, called a proxy statement.
How to read a 10-K: full financial statements
This final section contains a list of financial statements and exhibits such as a list of the company’s subsidiaries, its bylaws, as well as legal company documents with retention details and incentive plans.
How to Read a 10-K: What to Look for in a 10-K Report
As you can see, the 10-K contains a wealth of information that makes it daunting to read. The good news is, you don’t have to read it word by word. In fact, smart investors just focus on some critical sections for red flags and skim the rest.
Wondering how to read a 10-K this way? Let’s look at the most valuable sections for your investment decision-making process.
Manager’s discussion and analysis (MD&A)
That’s where the company shares its side of the story on what happened the past year and its prospects.
If you noticed stalled sales or cash flow evaporating, the MD&A should explain this problem and shed light into what the company is doing to address the issues.
Look for whether any reported cash flow issues or risk factors will be permanent or temporary — or new. A red flag will be if the company keeps blaming external factors for its poor performance without taking an introspective look at its own shortcomings.
Public companies require an independent audit. So you’ll likely find an auditor’s report. Check whether the auditor agrees that the financial statements accurately reflect the position of the company and its accounting procedures.
Also, look to see if the auditor’s opinion is qualified or unqualified.
A qualified opinion reflects a better understanding of the company and it’s operations, as opposed to an unqualified opinion, which simply reports on whether they followed proper accounting principles.
You will find this section in the middle of part II of the 10-K report named “Financial Statements and Supplementary Data.” Any change or disagreement with the numbers should be considered an investing risk red zone.
Cash flow and other financial statements
The cash flow statement is where you get to understand the company a little better. The numbers literally speak real truth about the company. If the company can’t maintain its previous cash levels, it could mean two things.
You can find out that the company has reported massive income gains, but this will mean nothing if they can’t maintain it. Take note of how much the company is borrowing.
You should also look at the consolidated financial statements and discover any other risk factors.
For instance, the company could be getting half of its income from one or two key customers, and once these customers leave, this could take the company for a dive.
In short, look at all of the financial statements for multiple years and compare. Look for major changes and find out what they mean for the future of the company.
Debt to equity ratio
The debt to equity ratio reveals you how much debt and equity is being used to finance the company’s assets. To get this ratio, you divide the firm’s total liabilities by total shareholders equity.
The ratio also indicates how risky it is to invest in a company. The higher the ratio, the riskier the investment.
A good ratio is around 1 to 1.5, but the ideal debt to equity ratio varies by industry because capital-intensive industries such as manufacturing or finance. The ratio here tends to be higher than two.
When the debt to equity ratio is high, this indicates that the company uses debt to finance its growth. That means the business may not be able to produce enough money to repay its debts.
On the other hand, a low debt to equity ratio shows that the company hasn’t relied on borrowing to finance its operations. That may indicate the company is not realizing the potential profit it could gain by borrowing and increasing its operations.
But don’t stop there. Look at all of the company’s financial ratios for a complete investment picture.
As we mentioned earlier, the proxy statement accompanies the 10-K report. That’s where you find the character of the company. Does it operate under transparency and integrity?
You can find out whether the priorities of senior executives line up with shareholders. You can do that by looking at how much these executives have personally invested in the company.
Not only does the proxy statement highlight executives, but it can also show you litigation risks, detailed business plans, auditor changes, and clue you in on the health of the business you’re considering for investment.
And the “Certain Relationships” section will help you find any information about any conflicts of interest. That could be if a major customer or supplier also happens to be a relative of an executive.
Summing It All Up
You no longer have to wonder how to read a 10-K effectively. Practice the art of picking out relevant information for your investment decisions.
Focus on looking for discrepancies in auditing and proxy statements, cash flow, MD&A, and the debt to equity ratio to determine the company’s integrity and financial stability.
You can also check out 10-K reports that go back a few years to identify some patterns.
We hope this article has given you valuable insights on how to read a 10-K effectively in order to make better investment decisions.
If you have additional pointers, please share with us in the comments section below.
Are you looking to invest in cheaper stocks this year? We’ve got you covered with the best penny stocks you’ll want to keep an eye on. Maybe you’re a veteran trader already — you’ve had your luck in forex, indices, and even commodities. And, now, you’re looking for something different to help grow your money. Or, maybe, you’re just a newbie who can’t wait to get started in the game.
Well, trading penny stocks isn’t something you want to go into blindly. It takes learning and mastering a few tricks to even make it as a penny stock trader. Do you know how to interpret the charts? How well can you analyze a stock technically and fundamentally? Have you even used a demo account yet? Also, depending on the weight of your wallet, you might want to pay for a couple of tools, including reliable stock screeners.
Reading expert books might come in handy, too, as is taking training courses. And yes, this can be daunting! The good news is that we’ve done the hard part and prepared a list of the best penny stocks you should be watching this year. It’s just that we don’t want you settling for every “Tom, Dick, and Harry” you bump into. But before we dive in…
What Are Penny Stocks?
Also called OTC stocks, cent stocks, or small-cap stocks, penny stocks aren’t your average stocks. These are securities that, while exchanged publicly, are usually cheaper with a small market capitalization. In fact, they’re priced below £1 in the United Kingdom and go for less than $5 in the United States.
Which makes penny stocks a riskier investment. A small move in the market can either fetch huge returns or subtract a decent portion from your investment, in equal measures.
Did you also know that…
Penny stocks are often issued by companies that are relatively small and new — businesses that are yet to establish a successful performance track record. And that doesn’t change the fact that penny stocks could be a sign a company is approaching bankruptcy.
Ever wondered why a stock priced up to $10 might fall under the OTC-stock category? That usually happens when its market capitalization is pretty low ($250 to $300 million). You should also know that most penny stocks are exchanged over the counter, even though some might be listed on large exchanges, such as the New York Stock Exchange (NYSE).
The history of penny stocks
We get it: You might be here for the best penny stocks to help grow your money. But it doesn’t hurt to dig a little into their background, right? Penny stocks have been around for a long time — since the inception of the stock market. It’s just that these probably traded differently.
The OTC stocks are even responsible for the 1929 stock market crash, according to the federal government. That was long before the Securities Exchange Act was created in 1934. This act would redefine the penny stocks to what they’ve partially come to be: The unlisted equity securities trading below $5.
The Great Depression would complete the definition to include those OTC stocks that trade on the exchanges. You should also know that before the age of the internet, you could only trade your best penny stocks over the phone. With the internet, however, new investors entered the market, exploding the entire penny stock idea.
Why Penny Stocks?
Even with the risk tied to trading penny stocks, many investors see these as a way of making quick money. And you know what? They could be right. Some of the best penny stocks available have high growth potential and can yield incredible profits. You only need to jump in early enough, rather than when the trend is about to reverse.
Even so, you want to know what you’re getting into before investing your hard-earned dollars. Get acquainted with the pros and cons and measure both sides. Do your research on each company you’re going to be a shareholder in, and diversify your stocks to manage risks.
Here are some of the pros associated with trading OTC stocks:
- A small move upwards can bring substantial gains, probably because of the lower price
- Penny stocks can be a means for small companies to gain access to marketplace listing
- These stocks help fund growing businesses
And here are the reasons you might want to trade penny stocks cautiously:
- OTC stocks tend to lack follow-up history
- There are no minimum standards set to trade these stocks, probably because they mainly exchange hands over the counter
- Small-cap stocks often have low liquidity
- Information related to these stocks might not be available to the public
How We Reviewed
So how did we review our best penny stocks? Firstly, we combed through dozens of expert websites for reliable OTC stock information, including PennyStocks. Then we followed through with the latest news, which helped shed some light on the small-cap stocks with higher growth potential.
Penny stock experts were next in line: Thanks to them, we added reliable predictions on our list of the best penny stocks you want to watch. And yes, we considered different sectors, just so you can have your pick. Last but not least, we factored in tips from real investors who’ve crushed it in this type of trading.
The Best Penny Stocks to Buy This Year
Finally, here are the best of the best penny stocks you can’t wait to add to your trading portfolio. We’ve listed them in no particular order.
Eldorado Gold (EGO)
Shares of this gold penny stock have been on the rise since the end of May. In fact, the price has more than doubled in the last 40 days. Which makes us wonder if Eldorado Gold could just be one of those rare stocks that tends to withstand difficult economic times. But despite the market’s stormy condition, this stock’s price has not lost its momentum.
So, why did price even soar? Well, all this came about following the company’s announcement in its gold-production surge in the second quarter of 2019. After which, investors, being who they are, couldn’t sleep on their job, sending the price north.
Camber Energy (CEI)
Another one of our best penny stocks to watch is Camber Energy. Based on the company’s announcement that it was nearing a key acquisition, prices have rallied over the last few weeks. On July 8, Camber made known its plans to acquire Lineal Industries. And, this is no small deal. In fact, according to experts, it should only boost the company’s revenues.
It’s no wonder investors have raised their eyebrows since the stock at one point escalated in price by over $6.50 in 24 hours. And, even though the price has tested lows of under $6 during this time, it is still interesting to know how Camber is going to perform going forward. Definitely, a stock you want to keep an eye on.
FuelCell Energy (FCEL)
You don’t want to skip FuelCell Energy when assessing the best penny stocks to help grow your money this year. But if you’re still thinking this stock has had a bumpy year, you need to rethink it. In case you’d no idea, things made a remarkable turnaround in late June, when the company landed a major project with Drax Power Station, one of U.K.’s largest renewable energy generators.
And yes, this alone has skyrocketed share prices to higher highs. Not only has price rallied by 37 percent, but also the trading volume has towered to a record peak. Which leaves us with the question: Will FuelCell’s price keep rising, considering it has since doubled?
Sure, the current recession might have compromised the earning potential for several companies, but the defensive health sector could, apparently, survive the “tsunami.” Even with an extensive global portfolio of 33 patents, Biocept recently announced a potential launch of a liquid biopsy test for lung cancer.
Got no idea what Biocept’s cancer assays do? Well, these allow for cancer patients to qualify for targeted therapy, all in an endeavor to identify resistance mechanisms. This oncology diagnostics firm is witnessing some pretty strong sales, as a result. It is one of the best penny stocks you don’t want to overlook, especially if you’re a risk-averse investor.
STRATA Skin Sciences (SSKN)
You probably already know that prices for this dermatological service company have nosedived over the last few months. However, that’s not to say the price has stagnated downwards. After the fall, STRATA has gained a cool 12 percent. Yes, this might not be much of an increase, but there are signs the ascend could linger on for some time.
STRATA’s average 5-year sales rate is standing at a whopping 137 percent. We’re not even talking about the promising balance sheet. Without a doubt, you want to add STRATA to your best penny stocks basket.
CVR Partners (UAN)
CVR Partners couldn’t be more promising in the near future. But this nitrogen fertilizer company has reported a 68 percent growth in earnings per share (EPS) in 2019. And the estimated 28 percent increase for 2020 only adds to the already decent score. Yes, we know: Analysts have forecast a negative outlook with regards to fertilizers. We, however, are thinking they might be basing their evaluation on these two things: trade disputes and declining global demand.
You probably are also asking yourself questions on the CVR low prices, in June. Wonder no more! The company has recorded a 10 percent increase over the last several days, which has seen prices ascend to $3.99. This ascent is believed to have been initiated by Moody’s positive sentiments towards CVR Partners. Among other things, investors are also hopeful that the upcoming meeting between the U.S. and China chiefs is going to be fruitful.
Avino Silver & Gold Mines (ASM)
If you’re looking to invest in precious metals, this penny stock could well fit the bill. Of course, silver has been revolving around the $15.50 resistance level, but Alvino is proof that this metal is about to trend upwards. The company has, in fact, gained an impressive 30 percent over the last few months.
As silver endeavors to catch up with gold, commentators are hopeful that it’s going to double its value, effortlessly, over the next six months. That probably means Alvino is showing signs that its share prices are just about to soar, despite the company recording a massive drop (56 percent) over the last year.
Encana Corporation (ECA)
Even though it’s currently trading just over the $5 mark, this fuel producer deserves to sit on our list. It is still one of the best penny stocks you want to watch. Don’t be fooled with the higher debt and unfriendly balance sheet — which has probably contributed to the current lower price. But we have a reason to believe Encana might catapult to $7 pretty soon.
Oil prices tend to rise just before a recession. So, if you don’t mind investing just over $5 a share in the energy sphere, this stock might well offer a perfect entry point. Note that it can be tempting to think Encana is currently oversold due to its six quarters of upbeat earnings in a row.
Rekor Systems (REKR)
This security firm has got some terrific clients, including the Nokia Corporation and the U.S. Defense Department. Not only has Rekor managed to increase its clientele, but also more customers are scheduled to use the company’s software. Just recently, the price skyrocketed to $1.12 — that’s about a 62 percent rise.
And, while Rekor lost some of the gains, it has more than redeemed itself, recording escalations of up to 117 percent in the last few months. Even though this company sits in our best penny stocks category, it’s currently showing signs of being overbought, which can be a red flag. You want to trade cautiously!
Flex Pharma (FLKS)
The potential merger for Flex Pharma with Salarius Pharmaceuticals, an oncology firm, is one watch. Well, Flex Pharma is a Boston-based biotech firm, whose share prices are currently sitting below 50 cents. The company, in fact, has recorded a loss in the first quarter of 2019.
However, the potential merger has got analysts thinking positively; they are hopeful it’s going to be a success and push the share prices up. Also, just so you know, Flex has risen over 45 percent in the last few weeks. And no, this wasn’t news-based, as is often the case with such spikes in price.
Partake in This Profit-Making Wave
There you have it — some of the best penny stocks you want to watch. Even so, like with forex, indices, commodities, etc., trading stocks can be risky. You should be doing it cautiously and investing what you’re comfortable losing.
You also want to do your homework on the various penny stocks you’re looking to invest in before taking the next step. Equally noteworthy, if you’re a newbie, you should consider taking training classes, reading books, and mastering a few tricks. You want to get started on the right foot.
Above all, you don’t want to skip using the demo account — you need some experience with virtual money before risking your hard-earned cash. It’s just that money, like time, is precious. Losing huge sums of it in unexpected ways can be especially devastating. We don’t want that for you.
Remember: This is not investment advice. You want to do your research before even giving these stocks a shot — and, ultimately, beat the penny stock promoters at their own game. What penny stocks do you recommend? Let us know in the comments below.
Buying real estate can be one of the most secure investments you can make, but it can also be stressful. Understanding the difference between a down payment vs. deposit is just one of many obstacles to becoming a homeowner.
And even once you know the difference, you still have to decide how much money your down payment vs. deposit should be.
But while the whole process can seem daunting, arming yourself with knowledge is the best thing you can do. Deposits and down payments are big financial decisions that will impact your fiscal future. So, it’s essential to understand every step of the process so you can make a properly informed decision.
Definition of Down Payment vs. Deposit
What is the difference between a down payment and a deposit?
A down payment determines the conditions of the relationship between the lending institution and the buyer. Similarly, a deposit forms an agreement between the buyer and the seller.
A buyer makes both during the home buying process: the deposit first, and then the down payment. And in both cases, the money comes out of the buyer’s pocket, not as part of a loan.
What is a Down Payment?
A down payment is a percentage of the purchasing price that a buyer gives to a lending institution (usually a bank) in a single transaction. Most people don’t have the cash to buy a home or car in one payment.
As a result, the buyer applies for a loan (called a mortgage loan for homes) to cover the remaining costs.
For example, you need a mortgage loan for a house that costs $100,000. If you make a down payment of $10,000 (10 percent of the purchasing price), you will receive a $90,000 loan from the bank to complete the payment.
Then, depending on the terms of the loan, you will make monthly payments with interest on the $90,000.
The size of the down payment doesn’t necessarily influence the seller’s decision. In the end, the seller will still receive the total sum of $100,000 (assuming the appraisal matches the purchasing price).
The amount of the down payment affects the conditions the bank sets for the loan.
The down payment doesn’t include any of the money received from the bank. The buyer has to have the cash readily available in their bank account. That’s why saving for a house can take years.
And the larger the down payment you can make, the less interest your mortgage loan may accrue over time. Plus, a large down payment may lower the interest rate.
Ultimately, your down payment can help establish your trustworthiness to the bank.
What is a Deposit?
A deposit is like an agreement of good faith between the buyer and the seller. It may also be described as earnest money or an escrow deposit.
If you rent, you should be familiar with the concept. Landlords usually ask for a security deposit when you sign the lease agreement.
When you move out, the landlord may return the deposit as long as the property is in good condition. If not, the landlord may use part or all of the deposit to make necessary repairs.
Whereas a deposit with a landlord may equal one to three month’s rent, an earnest money deposit is usually a percentage of the purchasing price. A large deposit may persuade the seller to make an agreement with you instead of another buyer.
It can demonstrate to the seller that you are confident in securing the mortgage and committed to finalizing the sale.
But that deposit does not go directly to the seller. The money usually goes into an escrow account, which is managed by a third party. That allows both the buyer and the seller to enter contract negotiations in good faith.
A deposit does not guarantee a sale; however, if the seller accepts the deposit, then the contract usually instructs the seller to take the house off the market. During this time, the home is appraised to verify the conditions of the house and determine its worth.
If the buyer decides not to follow through with the purchase or fails to meet conditions set by the contract, they may lose the deposit to the seller.
If, however, the inspection finds something horribly wrong with the property or the price doesn’t match the appraisal, the buyer could receive the deposit back — but only if the contract allows it.
When Do I Make a Down Payment vs. Deposit?
As we said, down payments and deposits are part of the home buying process, but they can also be steps to purchasing a car as well.
But before you make your purchase, it’s wise to get pre-approved for a car loan or mortgage before shopping around. This effort demonstrates to the lending institution (as well as the seller) that you are responsible and serious about making the purchase.
When approaching a bank for a loan, you should have an idea of what size house or car you want, where you want to buy, and how long you intend to own it.
Once you receive a pre-approval, you know what your budget can be for a down payment vs. deposit.
If you want to buy a car model that is custom-built or isn’t in stock, the dealership may require a deposit before ordering from the manufacturer. Or if you buy a car from a private seller, you may want to offer a deposit while you finalize your loan.
In contrast, buying a home is a longer process. Once you find the home you want, you make the deposit to secure a contract. When the seller accepts the deposit and takes the home off the market, the house needs to be appraised.
As mentioned previously, the appraisal will confirm the purchasing price set by the seller. Depending on what an appraiser finds, the buyer and seller may negotiate on any repairs or adjustments.
But if the appraisal goes well, then the buyer and seller enter the closing process.
During this time, the buyer will finalize the mortgage loan with the bank, which includes the down payment. Often times, the bank will accept the deposit as part of the down payment.
How Much Money Is a Down Payment vs. Deposit?
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A large down payment vs. deposit can be a tough choice. Unfortunately, there is no magic number that fits all down payment or deposit situations. It largely depends on the value of the asset, the demand versus the supply, and your financial situation.
As a Home Buyer
A deposit is generally no more than two percent of the purchase price. The down payment a bank may require is usually 20 percent, but that’s not always the case.
In a hot housing market, a larger deposit may be more attractive to the seller and make you a top candidate.
For example, in 2018, the median selling price for a home in San Francisco was $1.5 million, but people were still bidding hundreds of thousands over the asking price. Buyers wanted to be competitive candidates by offering more money.
For down payments, banks often prefer to receive more money upfront to reduce their risk. As an incentive, they may offer lower interest rates to encourage larger down payments.
But remember that your home is a long-term investment. During that time, you may discover more lucrative opportunities that outweigh the benefits of a large down payment.
For example, say you have $20,000 available for buying a house that’s $100,000. You could use the entire $20,000 for a down payment, or you could use just $15,000 on the down payment, and invest the remaining $5,000 in other markets.
While you may accrue more interest on your mortgage, the $5,000 you invested may help you pay off the mortgage sooner.
It may also give you more financial freedom in the short run than if you had paid a $20,000 down payment.
But if you use the full $20,000 for the down payment, your monthly mortgage payments may be smaller. And depending on your financial situation, smaller monthly payments with a lower interest rate may be the fiscally responsible decision.
There are a variety of factors that will affect how much you pay, so be sure to keep all your options in mind.
As a Home Seller
When selling a home, the size of the deposit may affect your decision. Generally, a larger deposit means the buyer is serious about purchasing your home, and that they have the money to close the deal.
Plus, if the buyer does not commit to the sale, you may be able to keep the deposit and put your home on the market again. Or if the buyer fails to meet the obligations outlined in the contract, you may be entitled to the deposit.
But you only want to go through this process once, and a large deposit doesn’t necessarily mean an easy sale for you.
For example, a buyer may offer a high deposit, but also add a home sale contingency in the contract. That means the sale of your home is dependent on the sale of the buyer’s home.
So while a big deposit seems like a good thing for you, other factors may make the process easier in the long run.
What Happens After Making My Deposit and Down Payment?
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Once your deposit is accepted by the seller, and the bank accepts your down payment, you are on your way to closing on the house!
But this is just the beginning of your journey as a homeowner (or landlord). Be sure to check out our tips for first-time home buyers so that you can make the best decision possible.
Have you made a down payment on your house yet? Do you still have questions about what a down payment vs. deposit is? Let us know in the comments!
Are you in search of a reliable sales software solution? You’ve probably come across a ClickFunnels review when searching online.
The problem is, there are countless reviews of other software such as Leadpages, InfusionSoft, Instapages among others.
There’s no better way to pick the right choice than by reading an in-depth review, such as this ClickFunnels review, to get your facts right!
What’s All the Fuss About Funnels?
Sales funnels exist in every business whether you know it or not. Understanding how it works can help you influence how web visitors relate to your site and reach buying decisions.
Website optimization is what matters most when it comes to your sales funnel. To help you understand how a sales funnel works, we’ll look at a brick-and-mortar funnel.
The Perfect Analogy
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People usually walk into a clothing store and start browsing. A sales associate then approaches them, greets them warmly, and offers them assistance.
One particular customer spots some dresses on clearance and the sales associate goes to help her out. He tells her that he can offer her a discount if she buys four or more dresses.
The customer gets thrilled by the offer and picks six dresses. At the cashier’s, a sales associate recommends a black moto jacket to go with all her chosen outfits.
That seems like a great idea to the customer and she adds it to her purchases then leaves. She is so pleased with the discounts, she comes back two weeks later and buys more dresses.
When it comes to websites, the same sales play out. The only difference is that you have web pages to guide visitors through the sales funnel instead of a sales associate.
The Sales Funnel Process
The sales funnel consists of five main stages including:
At the awareness stage, the prospect learns about your existing solution, product or service. That is where they visit your site for the first time either through a Google search or social link.
At the interest stage, the prospect actively seeks solutions to their problems. Here, they can follow you on social media or subscribe to your email list.
The third stage is the decision stage where prospects try to decide if you are the right fit for their needs. They pay attention to your packages and offers before making their final choice.
At the action stage, the prospect has become a customer by finalizing the deal with you. This could be by signing a contract or clicking the purchase button and wiring the money to you.
Then the retention stage is where you encourage the customer to make repeat sales. You do this by keeping them engaged with your product or service through special offers, follow-ups or emails.
ClickFunnels Review: Overview
ClickFunnels is a sales funnel builder that helps businesses to build beautiful pages that market, sell, and deliver their products and services. You can think of ClickFunnels as that sales associate guiding visitors to make a sale.
It offers a range of pre-made sales funnels, an intuitive drag-and-drop editor, and landing page templates for a smooth funnel design process.
The software was created in 2014 by Russell Brunson, an experienced internet marketer and entrepreneur. The company has grown to become a $360 million dollar SaaS business within three years. What’s even more impressive is that it’s entirely self-funded.
How Does ClickFunnels Work?
ClickFunnels simplifies the entire sales and marketing process for all kinds of businesses.
Traditional sales funnels involved dealing with website hosting, email autoresponders as well as landing pages and other different elements that have to work in unison. This makes the whole process expensive and time-consuming.
On the other hand, ClickFunnels incorporates all the above elements and offers them in a unified package. That way, you won’t have to deal with every service provider separately or even hire a developer. Similarly, you’ll be able to create a sales funnel that suits your business needs.
ClickFunnels Review: Key Features
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ClickFunnels comes with amazing features and tools to ensure you create impressive, high converting sales funnels fast. So let’s dive into an in-depth look at some of its best offerings.
Predefined Sales Funnels
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ClickFunnels provides numerous predefined sales funnels to choose from. They are usually categorized into industries and the goals they have been designed to achieve.
It has 22 types of sales funnel templates that can be used by different business entities. These funnels are classified into the following categories:
- Sales page funnels
- Lead capture funnels
- Membership funnels
- Event funnels
You have the option to select a free or paid template in each category. In addition, each sales funnels has a video what it can be used for and top tips for getting the best results. You can also set up custom sales funnels to cater to your specific business objectives.
To create a sales funnel, you can use the classic funnel builder that allows you to select a goal and funnel type or take advantage of pre-made funnel templates in the ClickFunnels Cookbook.
Visual Drag-and-Drop Editor
The intuitive drag-and-drop editor makes it easy to create sales funnels using ClickFunnels. You won’t have to deal with the coding mumbo jumbo anymore.
Using ClickFunnels, you can also display social share buttons, add a number of advanced forms to your funnel, choose background color and images or videos. If you are confident with coding, you can also create a custom CSS for unique pages.
ClickFunnels takes into consideration that e-commerce businesses will need a little extra to promote their products. It helps you create a multistage sales funnel where you can showcase your products, generate interest and eventually make a sale.
ClickFunnels supports online businesses that sell either physical or digital products. It integrates with ShipStation that takes care of the time-consuming task of packaging and shipping.
Consequently, ClickFunnels integrates with payment gateways such as PayPal, ClickBank, Stripe, Authorize.Net, and InfusionSoft.
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ClickFunnels integrates with popular email responders such as MailChimp, AWeber, Salesforce, and many more. It also offers its own marketing automation platform known as Actionetics. That feature is available on the Etison Suite plan.
Actionetics helps users to set up email lists, create email campaigns, use click bots, design action funnels, and follow up funnels.
You can create webinars using ClickFunnels and spread the word about your services.
You can use services like Zoom or GoTo Webinar to host live webinars and use ClickFunnels event funnel to customize the registration process.
Another option is creating a pre-recorded webinar that ClickFunnels plays on demand.
Analytics and Split Testing
ClickFunnels lets users split test sales funnels to understand what works and what doesn’t. Elements you can test include pages, copy, headlines, buttons, images, and videos.
It also automatically tracks your funnel to provide analytics on how your pages are performing. Using the ClickFunnels dashboard, you can access stats on user behavior, page views, conversion rates, and funnel comparisons.
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ClickFunnels offers impressive customer support by providing an extensive knowledge base that’s well-laid out in its dashboard.
You’ll find a wide assortment of help videos and best practices. You will also find an explanation of tools as well as the top tips on using its features.
Apart from this, ClickFunnels offers a community support forum and Facebook page to allow interaction between its users. It also has an active YouTube channel with informative videos.
Backpack Affiliate Program
ClickFunnels features the Backpack affiliate program that offers five percent, two-tier commissions for referring people to the ClickFunnels affiliate program
You can also win cool prizes such as $500 towards a dream car if you hit 100 active referrals. ClickFunnels sticky cookie lets you earn commissions on any upsells your referrals buy as they go through specific funnels.
What ClickFunnels Users Have Been Saying
Now that you have an idea of the features that ClickFunnels provides, let’s consider the ClickFunnels review from people who actually used it.
The ClickFunnels review on Capterra had an overall rating of 4.5 out of 5.0 stars. A good majority of users were impressed with its page elements selection and affiliate program.
However, one user mentioned that ClickFunnels doesn’t have a blog function. Another user said that it has a high learning curve when starting out.
On the other hand, the ClickFunnels review on GetApp also had an overall rating of 4.5 out of 5.0 stars.
Users loved that it took away the guesswork of building a landing page that converts. Some cited that the ability to upsell and downsell is what stood out for them.
Unfortunately, some users complained that ClickFunnels setup could use two separate screens and this can be confusing.
ClickFunnels Review: Pros and Cons
Below are some of the benefits you’ll enjoy and the drawbacks that you are likely to face when using ClickFunnels.
- Prebuilt sales funnels
- Amazing affiliate program
- Split testing option
- Upsell and downsell features
- Actionetics autoresponder
- High learning curve
- Limited features in the starter plan
How We Reviewed
To bring you an unbiased ClickFunnels review, we scoured the internet and read numerous user reviews from sites such as Capterra and GetApp.
We also looked at the ClickFunnels website to come up with an in-depth overview of its features.
Furthermore, we compared ClickFunnels against its strongest competitors such as InfusionSoft, Leadpages, and Instapage.
ClickFunnels Review: Top Competitors
No ClickFunnels review would be complete without looking at the competition. So, how does ClickFunnels stack up against other major landing page builders?
Let’s find out.
InfusionSoft, now Keap, is one of the most powerful online marketing tools to compare with ClickFunnels. It offers highly extensive landing page designs and opt-in form builder. It also allows users to run split tests and email marketing automation.
User reviews on Capterra gave InfusionSoft a rating of 4.0 out of 5.0 stars. Several users liked its automation capabilities and the responsive email builder. However, some users complained that InfusionSoft’s new landing pages are limiting.
Customers on GetApp gave InfusionSoft an overall rating of 4.1 out of 5.0 stars. Users liked that it provided a full-featured email marketing system but, a user complained about their customer service.
Leadpages was one of the first landing pages solutions in the market. It offers two landing page editors that cater for beginners and an advanced user. Users can create popup windows to encourage email signups and host webinars.
Leadpages reviewers on Capterra gave it a rating of 4.5 out of 5.0 stars. Users liked that it easily integrates with major email service providers and that it can be used with Facebook. However, one user complained that phone support was only reserved for advanced subscribers.
Users on GetApp gave Leadpages an overall rating of 4.4 out of 5.0 stars. Users applauded its ease of use and flexibility with membership platforms but complained that its customer support was poor.
Instapage offers a higher level of sophistication than other landing page builders. It provides an in-built analytics tool, A/B testing and heatmaps to track visitors and optimize your landing page. For instance, you will be able to see what web visitors click and how far down they scroll through your pages.
Instapage reviewers on Capterra gave it an overall rating of 4.5 out of 5.0 stars. Most users liked that it had stunning landing pages and how it was easy to use. Unfortunately, a user complained that it was hard to edit font size in the mobile workflow feature.
Reviewers on GetApp gave Instapage a rating of 4.6 out of 5.0 stars. Users liked its fast loading pages and heat maps feature. However, one user cited that the form page element overlaps two sections.
Why ClickFunnels Stands Out
ClickFunnels stands superior to other funnel creators because it excels in building landing pages, membership groups and creating sales funnels with upselling and down selling functionalities.
Leadpages focuses on building landing pages more than sales funnels. InfusionSoft comes with powerful landing page builder capabilities but ClickFunnels offers a wide variety of pre-built funnels that gives you more influence over the buyer’s journey. Instapage was a close call but it doesn’t integrate with membership platforms seamlessly.
Which of the above landing page builders is your favorite? Tell us about it in the comments section below!
Saving money is one of the hardest things to pull off. Many of us start saving with good intentions, then find ourselves putting in less and less until we stop all together. However, starting a money saving challenge may be the answer to your saving issues.
Saving money takes time, and they say time is money and money is time. With any of these challenges, you’ll find out just how true that is. As long as you stick with the challenge and continue to keep up your new saving habits, you’ll be saving money in no time at all.
The Money Saving Challenge
There are a ton of different challenges out there that people have come up with, all intending to help you put away as much as possible. Some are more difficult to do but yield better results. Others will leave you with a decent amount when all is said and done and will require less as you go.
The money saving challenge you decide to go with is dependant on how much you make and how much you’re willing and able to put away. Some of these deal with pretty hefty dollar amounts, while others deal with pennies.
Whether its a lot or a little, saving money is always a good idea. You never know when that savings will come in handy.
52 week challenge
This challenge is probably the most popular money saving challenge there is, partly because of its simplicity. There are also variations of this challenge that can increase your result. Again, it all depends on what you’re comfortable with.
Throughout the 52 weeks, you will slowly increase the amount of money you save each week. You start with just one dollar, then up it to two dollars the next week, and three dollars the third week. This goes on until week 52 where you save $52.
At the end, you will have put away $1,378, which is an excellent amount of money. While this challenge starts pretty easy, as the weeks go on, you’ll have to find new ways to save a little more.
However, once the challenge is over, those money saving techniques can stay with you, and you’ll find yourself saving regardless of the challenge.
Other variations of this challenge include the double 52, mini 52, reverse 52, and flexible 52. All of these differ in either the dollar amount or the amount of time spent doing the challenge.
This money saving challenge is perfect for those of us who get a paycheck every two weeks. Technically this is another variation on the 52 week challenge, but may be more accessible for some.
For this, you will save money on the week you receive your paycheck. So, it will be three dollars on the first paycheck, seven dollars on your second paycheck, and so on. The pattern is the same as the 52 week challenge, but you put money aside every two weeks rather than every week.
You’ll be adding the dollar amounts of each week to figure out how much to put away with each paycheck. At the end of it, you’ll be left with the same amount as the 52-week — $1,378.
365 day challenge
What do you think is more: $100 or 1 cent for each day of the year? If you chose the cents option, you have good common sense.
The 365 day challenge has you saving a penny for each day of the year. It works by starting with $0.01 the first day, $0.02 the second day, and on the last day, you’ll save $3.65. By the end of the year, you’ll have $667.95 in your reserve.
While it may not be a whole lot, it may surprise you how much 600 bucks can help in a pinch.
Spare change challenge
Also called the round-up challenge, this one has you investing all of your spare change from the money you spend. If you use cash, this will be a bit easier for you, as you can just physically put all of your change into a jar.
Of course, a money jar is a lot better if you can keep track of how much you’ve put in so far, like the Lefree Piggy Bank.
However, this money saving challenge is still possible if you use a debit card often.
If you keep an eye on your purchases, you can transfer your spare change into your savings account at the end of the day. For example, if you buy a drink for $1.75, round it up to $2 and deposit a quarter into your savings account.
You’d be surprised how much you end up saving with this challenge.
Five dollar challenge
There are a lot of different forms of this money saving challenge. There’s one that has you multiplying $5 by the number of the week you’re in. This one can get you saving up to $7,000 by the end of the year.
But not everyone has that kind of spare change.
Another version of this challenge has you physically putting any five dollar bill you come across into a jar. Then six months or a year later, depending on how long you want, you deposit all of the five dollar bills into your savings account.
The second method doesn’t have a definite end goal but instead has you surprised by how much you can save, which is just as good.
How to Start to save Money
Saving money can be a hard habit actually to start, but once you get into it, you’ll be happy you did.
We always say we will and most probably have good intentions, but those words rarely come to fruition. That leaves us sitting there with nothing to show, hoping people forgot what we had said.
But you don’t have to be one of those people. Saving money can be as easy as just putting one dollar away a day. You won’t be left with a whole lot of money by the end of it, but you’ll have something.
But probably the best thing you can do to help you save money is starting a budget. The 50/30/20 budget is a genius way to start and keep saving. It has you devoting 50 percent of your income to necessities, 30 percent to your wants, and 20 percent to your savings.
Keeping your budget is also a lot easier if you have a way to track how much you’re putting where. Something like an expense tracker is a good way to do that.
But whatever money saving challenge or method you go with, remember to stick with it and keep it up even after the challenge is over.
The worst thing you can do is wait too long to start saving. The earlier you begin to put just a little of your money away, the more you’ll be left with down the road.
However, that final amount is getting lower and lower as you’re reading this article.
Just finding a money saving challenge you like is a great first step. Once you do that, all you have to do is put the money away; then it just gets easier from there.
Everyone has dreams and goals that they want to accomplish. Starting to save money now will help you reach those goals much more quickly. Whether its a house, or college, or just a new gaming system, putting a little away now and then will help out a lot.
Why Is It Important to save Money?
Saving money can be one of the smartest decisions you can make. And whether you go with a money saving challenge to help with the savings or find other ways to save, it’s always a good idea.
Starting a money saving challenge and continuing it can help you in any number of ways.
Savings accounts are a great way to build up an emergency fund. These are one of the most common forms and can help out a lot in a pinch.
If you find yourself needing a flight ticket to go home for an emergency or find your bonus is lower than you expected, you no longer have to panic because you’ve prepared for any situation.
The amount that you could potentially save is unlimited. In fact, it all depends on you and your needs. Focus on the things you need first, like rent, bills, and food. Anything extra is something you could put away.
Common money saving mistakes
If you’re trying and struggling to save money, there may be something you’re doing that is detrimental to your efforts.
Believe it or not, some saving techniques are not all that great. One common mistake is panicking and putting everything into your savings at the expense of everything else. Your bills and livelihood should be your priority, and saving is extra.
Another mistake is trying to save money by buying cheaper products. Yeah, you may be saving a bit right then and there, but how good is that product?
Typically, when you buy a cheaper product, the quality is not great, and you may end up buying the same product in another month.
If you’re starting an emergency fund, you need to make sure that it’s easy to access if you need it, but not too easy that you’re tempted to dip into it all the time.
The phrase out of sight, out of mind is a smart way to keep yourself away from your money, but make sure that it is there if and when you need it.
Whatever you do, make sure you remember to put money away. One of the most common mistakes people make is simply forgetting about your fund. The only way it’s going to grow is if you remember to put money in it.
Save Your Sheckles
Using a money saving challenge can be a great way to introduce you into the world of saving money; however, it can only do so much. It’s totally up to you to keep saving money after the challenge is over. If you don’t, you’re back to square one.
But whatever money saving challenge you get into, it’s a great starting point. We want to know which challenge worked for you, if you tried one. Let us know about your experiences!
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