Savvy Tips and tricks learned along the way...
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New Year, New Investments
One of my resolutions this year is to get more active about investing. Before kids, I used to enjoy trading in the stock market. After kids, I sort of forgot about it all. Since then, I've honestly been scared to look at my portfolio to see what's been going on. It's been in the back of my mind for a while now, and finally I've gotten up the nerve and made the time to log in to my retirement account and face the music. And yes, I did find some ugly-looking things that were still ugly since the last time I looked. But I also did find some nice surprises. My husband has actually been my inspiration to look at my portfolio. He has been really good at keeping an eye on his.
I know people are saying that the market is over-inflated right now, and that stocks really have nowhere to go but down. But the last time I remember them saying that, I made an investment move based on that and have been sorry ever since. So really, it's all just speculation. No one can predict the future, so we just have to do the best we can. I'm super tempted to make some short selling moves right now, in an "over-inflated bubble market". But that got me really bad last time, and I am still unable to recuperate from that.
Back in 2013 or 2014, when I remember them saying the same thing about the bubble that will burst, I stocked up on short ETFs, namely SH, which is ProShares Short S&P500. It is an Exchange Traded Fund (ETF) that makes money when the stock market declines. Since I bought it a few years ago, the stock market has gone up. A lot! Needless to say, I have a long way to go, if I have any hope at all, to make my money back on SH.
Recently, my husband has done well with some basic index ETFs, like DIA, SDY, VDC, and VYM. I was actually quite surprised at how well those funds did since he has bought them. But that is mostly due to the incredible rise in markets that we've seen as of late. I was thinking of buying some of those funds for my portfolio. But now I'm scared because of the "bubble". I guess for now, I will sit and wait for a little market correction, and then buy an ETF or two.
However, I recently perused the Commission-free ETFs list that TD Ameritrade offers. And I think I'll give a couple of those a whirl when the "time" comes :-). Saving on commissions is always a plus. The only catch that I have seen is that you have to hold the fund for at least 30 days, otherwise they charge a short-term trading fee. Who wants that?! So whatever Commission-free ETF I buy, I have to love it for at least a month. I'm looking at some "safe" ones for long term investment: SPTM (for total stock market) and FXG (for consumer staples). Yeah, not that exciting. But it's a place for me to start.
Total stock market funds seem easy to me, because I will always hear news about what's going on in the "stock market". And I always love consumer staples funds. I figure people always need food and household items even during a recession. I've noticed that these consumer staples funds don't seem to rise very sharply in a booming market, but they also don't seem to plummet as quickly either during a decline. So I like to have some it as part of my portfolio. I took a look at the FXG consumer staples holdings and noticed that there are quite a few companies whose products I use on a day-to-day basis, like Rite Aid, Tyson Foods, Safeway, Kraft, etc. That works for me.
Maybe once I get braver, I might take a look at some more interesting, but still not too gutsy, commission-free ETFs like SPYD (S&P 500 High Dividend), SPYG (S&P 500 Growth), or SPYV (S&P 500 Value).
Just a disclaimer, the above investment ideas are my own ideas based on my own research. If you want to use them, please do so at your own risk. The stock market is just legalized gambling, and there is a chance you can lose some of your investment.
Saving money is making your money go farther and getting it to breed on its own whenever you can. Here are some ways I found to do both.
Why bother with coupons?
There are always arguments against using coupons. Because there are only pennies saved here and there, is what most people think. But there are actually dollars saved. What I like to do is double dip. I get a coupon for something I use or want to use. Then I wait until that item is on sale and buy it then with the coupon as well. Of course, with or without the coupon, I usually try to wait for that item to go on sale, which it usually does. Like my favorite shampoo and conditioner or cleaning products.
Many stores also have coupons that will save you a ton of money. Since I love to do arts and crafts, I typically wait to buy them until I get my Joann's 40% off coupon in the mail. Bed Bath & Beyond also has those great 20% coupons that I wait for before I buy new sheets or towels from there, which I really love. I bought an Ultimate Sweater Machine there one time, and the checker asked me if I had a coupon. I did, and saved $60 off the $150 item. Then she told me that one time she asked another customer if she had a coupon, and her response was, "I don't do coupons".
Organizing your coupons
I used to use a file folder for my coupons, but found that they didn't separate them out very well. I also tried using those cute little coupon organizers that you can find at the store. But that was way to small, and some of my coupons would get lost in the little folders. Now I use a regular size 3-ring binder with vinyl sheet covers and adhesive tabs. That way I can easily find what I'm looking for and see the coupons in the see-through vinyl sheet covers. (I also do my recipes very similarly, and sheet music that I download, legally of course).
There is so much financial advice out there that talks about building an emergency savings fund. A financial guru that I call "my mentor" said he'd rather call it a long term savings account. I think my husband sometimes calls it a nest egg. Whatever you want to call it, you need to have it. Its like an insurance policy, like home owners insurance. You have it just in case. In case you lose your job, in case a disaster happened, or in case little things happen, like you need to get your car fixed or something around the house breaks down. I've heard for singles, 3 months' worth of living expenses is fine. For couples with children, you'll need at least 1 year's worth. And for those who are self employed, at least 2 years. And this account needs to be liquid (as opposed to invested in the stock market) so that you can access it immediately when needed, which is who knows when.
So as you are amassing this huge savings account, where do you put your money to get the biggest return? These days, with interest rates so low, its hard to find a bank account that gives you a decent return. After doing some research, I found a web site checkingfinder.com that helps you find and apply for a high-interest account. Using that web site, I found Malvern Federal Savings to be the best fit for me. This way, you can get the highest interest rates possible but still keep your cash liquid. This is perfect for your emergency savings fund!
These reward checking accounts are not for lazies, though. There's a bit of babysitting involved in them, as there are with many other bank accounts. Typically you've got to use the debit card a dozen times each month, log onto the online banking site once a month, and set up a direct deposit. To keep track, I put a sticky note on my debit card and use hash marks to mark off the times I use the card until I reach 10, which is the requirement for my account.
I dabble in the stock market, hoping that one day I'll be a great trader. I think that investing and trading is a very important part of saving money. I always keep my eye out for good online brokers that can beat the commission rates that I am currently paying. For years now I have used thinkorswim.com, which I have been very happy with. What do I like about them? They are helpful, courteous, and prompt, whether you contact them by phone, email, or online chat. Their commissions are very affordable and straight forward. Their trading software is very easy to use, and they are constantly updating and improving it. They have mobile trading platforms, which I use on my Pocket PC and like very much. I haven't found a better online broker yet. So if you are looking for one, give them a try.
Another great way to make your money stretch is to use cash back rewards cards. Tons of credit cards offer these, you can search for them on bankrate.com. I use PayPal because there are a bunch of other bennies that come with that account. For one, it's not really a credit card, it's a debit card that I use, so I don't build up debt. It deducts money from my PayPal balance as I use the card. The account is also a money market account, so you get interest on the balance. I also sell things on eBay or online and use PayPal to handle the transactions, so the money I make goes into my PayPal balance as well. And with the cash back that I get from using the debit card, it all works out great. I like cash back better than mileage because I don't take a lot of trips. The cash back gets deposited right into the account, so it makes the money in the account seem to last longer.
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