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The Difference Between a Credit Union and a Bank Explained

Content - - March 25, 2020

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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.

To start, a credit union is a not-for-profit financial institution. In other words, ownership of the credit union is shared between all members rather than a single person.

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.

A bank run might seem like something that only happened in the early 20th Century. But, in fact, this has recently occurred in both Greece and Venezuela.

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!

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What Is The Opportunity Cost Of An Investment? How To Calculate It

Content, How to Invest Money - - November 1, 2019

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books papers calculator and pen

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.

Money

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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.

Sweat equity

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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.

Time

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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!

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How to Read a 10-K Annual Report and Actually Understand It

Business, Content - - October 24, 2019

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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?

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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

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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

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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.

Auditing

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.

Proxy statement

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

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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.

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Travel Hacking 101: How to Save Money on Traveling

Content, Personal Finance - - October 24, 2019

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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

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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.

Packing

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.

Eating

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.

Wifi overseas

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.

Shopping

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.

Lodging

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.

Flights

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.

Local transportation

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.

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ClickFunnels Review: Is It A Reliable Software Solution?

Content, Reviews - - August 6, 2019

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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Image by pixabay

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:

  • Awareness
  • Interest
  • Decision
  • Action
  • Retention

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.

Ecommerce

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.

Email Services

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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.

Webinars

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.

Customer Support

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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

In addition, ClickFunnels pays out 40 percent commissions for promoting any product in its ecosystem. This could be its books such as the Expert Secrets and DotCom Secrets by Russell Brunson.

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.

Capterra

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.

GetApp

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.

Pros

  • Prebuilt sales funnels
  • Amazing affiliate program
  • Split testing option
  • Upsell and downsell features
  • Actionetics autoresponder

Cons

  • 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

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

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

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!

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A Money Saving Challenge May Help You Put More Away

Content, How to Invest Money - - July 31, 2019

money saving challenge

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

stacked coins with plant on top lined up

Image source: Pixabay

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.

Bi-weekly 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

stacked coins placed on top of bills

Image source: Pixabay

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.

Don’t wait

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?

two persons holding piggy bank

Image source: Pexels

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

top view of money beside bank cashbook and pen

Image source: Pexels

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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