Why You Should Think About Renting Your Assets

renting your assets

With the rising cost of living and inflation rates, it has become necessary for many Americans to take on second jobs or look for a side gig. Today, nearly 45% of people have a side hustle of some sort. However, this can take a lot of extra time and energy that you probably don’t have. So, why not put the assets you already own to work for you? Here are a few reasons you should consider renting out your assets for extra cash.

Uncertainty for the Future

Since losing my dad last year, it has been tough for my whole family. While trying to navigate our lives without him, I have also taken on the responsibility of helping my mom with his finances and taking care of their property. I’m learning just how much of a physical and financial responsibility this really was. And, we aren’t certain if it is feasible or sustainable in the long term.

In addition to my mom’s physical limitations and health concerns, she is also living on a fixed income. It takes a lot to upkeep an acreage. However, she isn’t ready to leave the family home just yet. So, we’re looking at other ways to recover costs and maintain the property.

The idea that seems most promising is renting out assets to earn passive income. It could be a good opportunity for extra income if we can clear out some space and get things working again.

5 Advantages of Renting Out Your Assets

After talking to a few family, friends, and neighbors, here are a few reasons why we may consider renting out assets from my parents’ estate.

1. You can turn a profit from assets you aren’t using.

The most obvious advantage is the extra income. There are online platforms that provide a new way for you to earn money by renting out things you already own. And, you don’t have to invest any more money into it. You simply post your items, and the site facilitates the rest, including liability coverage to protect your assets.

If you aren’t sure that you have things people would want to rent, do some research. You might be surprised what people are looking for. For example, you can list:

  • a second home
  • extra bedrooms for tourists or long-term renters
  • office space
  • parking spaces in urban areas or near attractions
  • large outdoor spaces to host events
  • unused land for animals or agriculture
  • pools during the summer months
  • any type of storage space (including closets, basements, attics, garages, and outbuildings)
  • vehicles
  • tools
  • electronics
  • cameras and photography equipment
  • outdoor gear and sporting goods
  • designer clothing
  • baby items
  • extra bandwidth
  • money through peer-to-peer lending platforms

And this is just a short list of the most popular items. If you have any of the assets but don’t use them regularly, then you may want to consider renting them out for profit.

2. People earn more than you might expect.

The second advantage is just how much more you can make. On average, miscellaneous household items usually rent for $10-$50 per day. Although these could bring you a few hundred dollars every month, others could earn thousands.

If you don’t believe me, consider these facts:

    • Airbnb reported the average user made an additional $924 a month.
    • HyreCar says it’s possible to make an extra $12,000 a year by renting your car.
    • Designer apparel and accessories rent for hundreds of dollars per item per week.
    • A garage usually rents for around $600 a month. A large storage space, such as my dad’s pole barn, would rent for at least twice that amount.
    • Cash loans through peer-to-peer lending platforms earn an average of 5-6% on your investment. However, crowdfunding through real estate sites like Groundfloor can yield double-digit returns.

Although every investment comes with risks, it seems this is one side hustle that may pay off.

3. Most websites provide coverage for liability and property damage.

My biggest hesitation comes down to the risks that come with renting out your assets. These were my dad’s things. While they have value to others, we still want to show them proper respect.

When you rent things out, you expect to have maintenance and general wear and tear. However, we want to keep them in working condition. And if we decide to use the property, we don’t want to be liable if anything happens.

So, I was pleased to learn that most sites provide coverage for liability and property damage to protect your assets. Some sites like FriendWithA also run background checks to ensure you are dealing with trustworthy people. With these kinds of measures in place, my family is more likely to give it a try.

4. It’s a mutually beneficial arrangement.

Many items like tools and outdoor gear are expensive to buy, especially if you only plan to use them once. Although you may be able to borrow from someone, this isn’t always a great option.

On the other hand, many people who have these items don’t use them regularly. Not only does this take up space, but you also don’t get your value from them.

So, renting your assets is a mutually beneficial arrangement for both parties. In our case, my mom gets additional monthly income and the renters get a better price than if they rented from a commercial supplier.

5. It’s easier than other side hustles.

Every day, I see people making money through delivery and ride-share services. Others are earning extra cash from second jobs and other side gigs. But, the truth is that it’s tough. The average person puts in about 13 hours a week just to supplement their primary source of income.

Although she tries, my mom just doesn’t have as much energy as she used to. And she can’t commit as much time as it would require to see significant profits. But if she could rent out things she already owns, it’s a much easier way to earn passive income. And thousands of others are already doing it.

Things to Consider Before Renting Your Assets

While this may be a solution to my family’s financial problems, there are a few things to consider before jumping in head first.

  • You need to find the right platform and make your listing as appealing as possible.
  • Consider if the items you have are valuable to other people and what they are worth.
  • If you market yourself across multiple platforms for maximum exposure, you’ll be more successful.
  • Pay attention to the legalese in rental terms and protection policies to ensure you are covered.
  • Be careful when renting to family or friends.

If you are smart and find a niche that doesn’t have much competition, there is huge potential for growth. With enough success, you may discover that reinvesting in additional equipment could be a very profitable move.

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What Does the IRS Modernization Plan Mean for Taxpayers?

What Does the IRS Modernization Plan Mean for Taxpayers?

After much anticipation, the Internal Revenue Service has announced its multi-year plan to improve its operations. It includes many initiatives to streamline interactions as well as strengthen its cybersecurity and technology systems. With the IRS modernization plan already underway, people are starting to see its effects. But, what else is in store? And how will these changes affect taxpayers when they take full effect?

Unveiling the Strategic Operating Plan

After months of work, the IRS revealed its Strategic Operating Plan in April. It is designed to transform the agency and improve services to both the taxpayers and the entire country. It includes 42 initiatives, 190 key projects, and an outline of how the IRS plans to deliver these transformational changes.

Utilizing funding from the Inflation Reduction Act, the IRS modernization plan will focus on updating and bolstering resources within the agency by:

    • Rebuilding customer service. Through access to online tools, greater capacity for in-person taxpayer assistance centers, and more in-house staff, they will be able to reduce the notoriously long wait times. Providing more channels of communication will also create smoother interactions and help resolve issues more quickly.
    • Improving services. Adding more customer service representatives means the IRS will be better equipped to address taxpayers’ questions, help them meet their tax obligations, and ensure they receive eligible incentives.
    • Revamping the outdated systems to modernize the information technology systems. This will provide the IRS with the latest technology, data, and analytics to make operations more efficient. In addition to building the infrastructure needed to support the tax system, it will also provide stronger cybersecurity to protect taxpayer data.
    • Adding compliance personnel. These individuals will focus on handling audits of complex filings from high-income earners, partnerships, and large corporations. With more dedicated staff, the IRS will have better resources to enforce compliance laws and go after high-dollar noncompliance filings.
    • Training a more skilled workforce. Finding ways to attract, retain, and empower a skilled workforce will expedite the transformation and deliver better results.

The Immediate Affects on Taxpayers

Although it is a multi-year plan, taxpayers are seeing the first signs of change. We already have access to more staff and digital tools to provide faster customer service and simplify interactions. Some of these tools include more features in your IRS Online Account, a modernized e-filing system, automated voice and chatbots, and customer callback options. As these automated services and online options develop further, it will create a more seamless customer service experience.

Another immediate effect of the IRS modernization plan is the focus on high-income individuals, partnerships, and large corporations. Although audits will still be conducted within all tax brackets, there will be greater emphasis on high-dollar noncompliance issues. While audit rates will remain the same for households earning less than $400,000, those over this threshold will see an increase. Greater enforcement for those not fulfilling their tax obligations will hopefully decrease our national deficit and free up funding within the federal budget.

What the IRS Modernization Means for the Future

We are just starting to feel the initial effects. However, we will certainly see a greater impact as these historic changes take hold. The ultimate goal of the IRS modernization plan is to ensure fair enforcement of tax laws through the use of updated technology and better staffing. With faster resolutions of compliance issues, the IRS hopes to close the tax gap, relieve the tax burdens on those who are struggling, and collect revenue to support our nation.

In the past, the IRS didn’t have the resources it needed to address these problems. But according to the IRS Commissioner, Danny Werfel, “Now that we have the long-term funding, the IRS has an opportunity to transform its operations and provide the service people deserve. Through both service and technology enhancements, the experience of the future will look and feel much different from the IRS of today. This plan charts the course forward for the IRS and tax administration.”

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How To Restructure Your Budget for Unexpected Expenses

How To Restructure Your Budget for Unexpected Expenses

Many things in life are uncertain. But, one thing you can always count on is surprises. Unfortunately, they are not always good ones. And, sometimes they get expensive. Therefore, you have to learn how to adjust your finances and make room in your budget when this happens. Here are a few sound ideas to help you restructure your budget for these unexpected expenses so they don’t catch you unprepared.

4 Ways to Restructure Your Budget for Unexpected Expenses

A recent survey revealed that 56% of Americans do not have sufficient savings to pay an unexpected expense of $1,000 or more. The fact that so many people are living on the brink of financial instability is concerning. So if you find yourself among them, here are a few ways you can restructure your budget to help you get ahead.

1. Build it into your budget.

Even if you keep detailed accounts and know the exact total of your monthly bills, it’s impossible to anticipate every expense you will have. So, I learned long ago to leave a little room in the budget for “miscellaneous” expenses.

For example, I had to pay the repair cost this month when our dishwasher needed a replacement part. Last month, we used the extra money to cover the cost of gas for a visit to see family on the other side of the state. There was no way we could have planned for these situations. But, it’s for this very reason that I pad our monthly budget with an extra $200 (give or take) when things come up. Not only does it protect our finances, but it also reduces the stress of living on a limited budget.

2. Bolster your emergency fund.

As a student and young adult, I lived paycheck-to-paycheck for years. I earned enough to support myself. However, I ignored my parents’ advice to maintain an emergency fund. I was barely scraping by and didn’t see the point in setting the money aside since I needed it. That was, until my first major car repair.

After the transmission went out, I was left with a difficult choice: either fix my car or make rent for the month. At the time, it felt like an impossible situation. No matter how much I worked, it took months to regain my footing. And during that time, I felt like a huge burden to those around me.

So as soon as I was able, I started bolstering my emergency fund. In the beginning, I contributed $25 from each paycheck. Eventually, it grew into a comfortable safety net for the next unforeseen emergency. We now make sure that we maintain an account with enough money to cover 6 months of expenses should anything happen. For me, the anxiety of teetering on the financial edge was enough for me to take control of my finances and restructure my budget.

3. Reallocate resources.

Once you are down to a barebones budget, the next thing you can do is reallocate your resources and find ways to reduce costs. Here are a few ways you can restructure your budget without taking on more debt.

Reduce the interest payments on your credit cards.

If you carry credit card debt, you are probably paying hundreds of dollars each month in interest. So, one of the easiest ways you can give yourself breathing room after an unexpected expense is to reduce your interest payments.

You might be surprised how willing your credit card company will be to work with you. If you notify them before you miss a payment, they may be able to suspend the interest, waive late fees, or negotiate a lower monthly payment. You could also look into a balance transfer to a credit card offering 0% APR. And, there are also debt relief programs that can save you money by consolidating your bills.

cut out unnecessary spending

When it comes down to tough decisions, you need to learn how to prioritize your spending. Cutting back can be uncomfortable, to say the least. But you have to be able to recognize the difference between wants and needs.

So if you need to borrow from your other budget categories, you have to determine which things you can temporarily give up to recoup the costs. Perhaps you suspend an expensive membership, stop paying for activities, or delay a large purchase until you are more financially stable.

4. Review your monthly spending and the scope of your budget.

Whether you are trying to save, invest, pay down debt, or simply make it to the end of the month, you have to know the scope of your budget. However, the hardest part of any financial management plan is the follow-through. Not even the best-laid plan will be successful unless you consistently work toward your goals.

It requires self-discipline which starts by establishing good habits and holding yourself accountable. I tend to rely on my calendar and set deadlines to keep me on track. This includes notifications for when payments are due, alerts for balance limits, and reminders to make my monthly contributions.

We also schedule regular “health check-ups” to stay on top of our finances. We check our credit reports and meet with our advisors to review the status of our accounts. My husband and I also sit down together to review monthly expenses and remind each other of upcoming ones. This has become much easier with tools that show our spending by category and help us budget more efficiently for the months ahead.

Preparing for the Unexpected

Unfortunately, you can’t predict when an emergency will happen. You never know when you might lose your job, incur a large medical expense, or receive a repair bill. And with so many people struggling in the wake of the economic downturn, it’s becoming even more difficult to prepare for the unexpected.

The key is learning to assess your budget and live below your means so you are not spending more than you bring home. If you notice an imbalance, it’s best to restructure your budget so a financial setback won’t send you into survival mode.

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What Should Investors Expect If the U.S. Debt Ceiling Isn’t Raised?

What Should Investors Expect If the U.S. Debt Ceiling Isn't Raised?

Once again, the national debt is making headline news and putting the country in a high-stakes standoff in Congress. While the thought of the government defaulting on its debt is cause for concern, the confrontation seems to have become a partisan ritual. Although it hasn’t happened yet, failure to act could have far-reaching impacts on both the U.S. and global economies. But how would this affect individuals? And what should investors expect if the debt ceiling isn’t raised?

What’s Going on with the U.S. Debt Ceiling?

It’s no secret that the U.S. government spends more than it collects in taxes. Therefore, it has to borrow money by issuing bonds in order to meet its financial obligations. However, the current debt ceiling caps the total allowable amount of outstanding debt to $31.4 trillion. And, the government reached this limit on January 19, 2023.

At this point, the Treasury has taken measures to make sure it will have sufficient funds through June. But if Congress fails to raise or suspend the debt limit, it won’t have enough to cover all its payments. An unprecedented event like this would cause rippling effects through the national and global economies, affecting all markets. The negative impacts of the U.S. government defaulting on its debt payments could trigger a deep recession amid the already tenuous economic conditions.

The extent of these effects would largely depend on how long the situation lasted. But one thing is certain; if Congress fails to reach an agreement, we will all feel the financial impact. Without the money to finance them, the government would have to slash its operations and programs – including national defense, Medicare, and Social Security. This would cause an economic freeze and leave many Americans out in the cold.

How Did We Get Here?

To understand what’s at stake, you also need to understand how we got here. Over the last two decades, Congress has signed off on legislation for trillions of dollars in additional spending which has tripled the national debt. And with the public debt now at 127% of the country’s GDP, it seems like that deficit is going to continue increasing. This alone is cause for concern. However, simply refusing to deal with the issue would lead to a government shutdown.

This is where the mandated debt ceiling becomes this issue. In the past, Congress has repeatedly had to either suspend or increase this limit to allow the government to continue operations. Since 1960, this has happened 78 times, under both Republican and Democratic presidents. It was usually done with little fuss, until 2011 when government infighting led to a downgrade in the United States’ credit rating.

Now in 2023, it seems like we are once again facing a high-stakes standoff that could have even more devasting economic effects. If the Treasury cannot maintain cash flow, it could lead to an economic freeze, millions of lost jobs, and a crippling spike in interest rates when conditions are already unstable. Tipping the scales even further could land us in the middle of a recession that will take years to recover from.

What Are the Odds of the U.S. Breaching the Debt Ceiling?

As it stands, government operations will continue until at least June 5, which is the earliest possible date the U.S. could default. Although there is always the threat that the debt limit will be binding, markets have assigned low odds that this will happen.

Looking at recent history, it’s likely that Congress will approve to suspend or raise the debt limit. The bill has already passed in the House, and will likely pass in the Senate as well. And even if it fails, the president can still raise the debt limit through an executive order.

While the national deficit is a powerful political factor, both sides of the aisle know the score and the potential risks of inaction. However, that doesn’t prevent them from political jockeying to gain the advantage.

What Can Investors Expect?

Although analysts expect both parties to come together to find a solution, the idea of a Congressional impasse is still a horrifying prospect. And it would have many significant implications for investors.

  • Stock Market Volatility

Defaulting would likely stoke short-term market volatility. But it’s hard to gauge just how much it would affect global markets since so much is dependent on participants. If business and consumer confidence are completely undermined, it would have catastrophic market effects.

  • Market Panic

When market conditions worsen, some investors panic and start selling off everything. If investors unload all their bonds at the same time, it could lead to a market panic and crash similar to what happened in 2008.

  • A Permanent Downgrade

If lawmakers can’t come to a resolution, defaulting would lead to a permanent downgrade from credit rating agencies. The loss of status would also raise the cost of borrowing, making future investments even more costly.

  • Higher Interest Rates

As bond market yields plummet and sell-offs continue, we’re likely to see rate volatility across the board. This would mean higher interest rates for everyone, further exacerbating the already high inflation rates.

  • Weakening of the US Dollar

If other countries perceive the U.S. as unreliable in paying its debts, it could reduce demand and weaken the U.S. dollar.

  • Increase in the Price of Gold

If we have a weaker U.S. dollar, it could lead to an increase in gold prices, at least for the short term.

  • Outperformance in the Defensive Sector

The increased risk of a recession could benefit more defensive equity sectors such as utilities, healthcare, and consumer staples.

The future will always be uncertain. But, there are moves you can make to mitigate your risks in the face of a recession. If you are concerned about your portfolio, it’s wise to seek expert advice. Your financial advisor can help put you in the best position to withstand potential volatility.

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Persian Rugs as Investments: A Guide to Choosing, Buying, and Profiting from Exquisite Carpets

Persian Rugs as Investments

For more than two millennia, people have enjoyed Persian rugs for their beauty and longevity. Because of their superior quality, they retain value after many years as long as they are not damaged or worn out. Therefore, some people consider Persian rugs as worthwhile investments. But before you spend thousands of dollars for one of these unique masterpieces, here’s what you need to know about choosing, buying, and profiting from these exquisite works of art.

7 Considerations When Buying Persian Rugs

1. Origin

Those who want to purchase Persian rugs as investments must first learn an important distinction. While Oriental rugs come from all across the Asian continent, Persian rugs only come from the area of modern-day Iran. Although borders or empires have changed, rug-making is a 2,500-year-old tradition that has remained the same over time.

2. Workmanship

When you buy a Persian rug, you have a rare and beautiful piece of the country’s artistic history in your home. Each one is handmade and unique. Although they may have similar patterns, you will always find subtle differences that make them one-of-a-kind.

The skill and workmanship that go into producing Persian rugs are what make them valuable. Each one is knotted by hand and requires multiple artisan months, sometimes years, to complete. More knots equate to more work, but a high knot count also indicates its quality. You won’t find the same level of workmanship in machine-made rugs. Not only are they identical, but they are usually much lower quality than the real thing.

3. Materials

Another characteristic to watch for is the quality of the material. Persian rugs are woven from all-natural wool, silk, or cotton, not synthetic substitutes.  They also contain natural dyes from plants, insects, and other animals. In addition to lasting longer,  they won’t adversely affect the yarn. Since they are made from high-quality materials, these rugs can last for centuries.

However, you get what you pay for. And, the cost of labor and materials is on the rise. Although Persian rugs have always been considered valuable, these factors only increase their worth.

4. Condition

The condition is one of the most important factors affecting the value of a Persian rug. Some examples that have sold for millions at auction were hundreds of years old. However, they retained their value because they were in excellent condition with no repairs.

So before you buy, ask yourself a few questions. Has the rug been well cared for? Is it soft and pliable? Or is it brittle and stiff?

If you decide to invest, then you will also need to ensure that you continue proper care and maintenance so it won’t depreciate. This includes vacuuming, sweeping off debris, or shaking them out as part of household chores. You should also rotate it regularly, avoid direct sunlight, protect it from heavy furniture, and clean stains immediately. But if it’s silk, you will need to get it professionally cleaned.

5. Rarity

Any collector will tell you that rarity is another thing you must consider. Older Persian rugs with few surviving examples of the style will be the most sought-after. However, rugs that originate from famous workshops, tribes, or cities that no longer exist will also be extremely valuable.

Sadly, Persian rug-making is becoming a dying art. Many village and tribal weavers have already passed on or are moving to larger cities to find better-paying jobs. Therefore, there are fewer skilled weavers today and fewer Persian rugs produced every year. And, there will likely be even less in the years to come. Since they are already in short supply, prices will only increase as supply chains dwindle.

6. Appeal

Many people view Persian rugs as classic decor with timeless appeal. Although they were originally used by tribes to protect against the harsh climate, they became popular among 15th-century European royalty. In addition to elevating their status, it also brought them to new markets.

While it is subjective, a rug’s appeal will also affect its value. They come in a variety of designs, unique patterns, and vibrant color combinations. Though some look similar, each one is distinctive to a specific region, tribe, and family. Establishing this history gives the piece more appeal which could make it infinitely more valuable.

7. Generational Wealth

Those who are considering Persian rugs as investments may also factor in their potential for passing on generational wealth. Like other forms of art, they will appreciate in time if they are well-maintained. And when you compare it to other forms of art, Persian rugs come with a relatively low price tag.

Finding Reputable Dealers

The experts and serious investors know that if you want a quality piece, then you will need to work with reputable dealers. Not only will they ensure authenticity upon careful inspection, but they will also provide certification if you ever decide to sell it.

But unfortunately, there are not as many dealers as there once were. And Persian rugs are the type of thing you just buy online. Like art, you want to examine it for yourself and ask questions before purchasing it.

Finding reputable dealers will protect your investment and ensure that you don’t pay more than you should. But if you have any doubts about who you are working with, check out their reputation online. Find out how long they have been in business and look for customer reviews. This information can help you identify legitimate dealers from potential scammers.

Profiting from Persian Rugs as Investments

Many people get ideas when they hear stories of thrift store finds that sold for a fortune at auction. Although the most expensive Persian rug sold for $33.7 million at Sotheby’s New York in 2013, it wasn’t hiding in the back corner of a second-hand store. It’s not very realistic to expect that you will find a hidden treasure that will bring this type of profit.

However, it’s still possible to get a return from Persian rugs as investments. It won’t pay out overnight, but it can earn decent returns in time. But like all investments, alternative assets come with risks. Trends and preferences change, and some rugs never sell at auction. So, you must consider more than projected returns. You have to do your research, find reputable sellers, and take the time to understand the market. But more importantly, you have to invest in quality if you want to earn a profit. It won’t come cheap, but it may pay off in time.

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What You’ll Need to Know About Traveling in Retirement

Here's What You'll Need to Know About Traveling in Retirement

Most people dream of having the chance to travel. I caught the bug early and was lucky enough to spend more than 10 years living and working overseas. Even though I’m currently back in the US, I still have big travel plans for my future. My husband and I have even talked about retiring abroad. However, there are many things about international living you have to consider. If you have similar plans, here’s what you need to know about traveling in retirement.

7 Things You’ll Need to Know About Traveling in Retirement

1. You have to account for it in your retirement planning and monthly budget.

Unfortunately, traveling requires money. And if you are looking at luxury or international travel, it will get even more expensive. Even if you are a budget traveler and hunt for discounts, it won’t offset the costs of traveling in retirement. Therefore, you will need to estimate and account for these expenses in your budget.

Affording travel on a fixed income may be difficult, but it isn’t impossible. If you research the costs, plan well in advance, and are realistic with your budget, you can make it happen. However, if you feel like it is too much of a strain, you can also consider partial retirement or consulting jobs to finance your lifestyle.

2. You can overlook your health and physical limitations.

The chance to explore new cultures and remote places has deepened my desire to travel. But the sad reality is that it will be harder to access rugged hiking trails or handle steep staircases at 65 than it was at 25.

As you get older, you have to factor in your health and physical capabilities when you choose travel destinations. International standards for accessibility also vary. So, you want to make sure you go somewhere that allows you to fully enjoy the sights. If you have specific needs that can’t be accommodated, it’s probably a good idea to adjust your itinerary.

Even now, I leave room for flexibility in our schedule for downtime, especially if we plan strenuous excursions. Having time to relax and recover can reduce the risks of injury and illness. While these will become more common the older we get, you can take precautions so it won’t interfere with your travel plans.

3. Your health insurance may not offer coverage in other countries.

Since we’re on the subject of health, it’s also important that you understand the limits of your healthcare coverage. Private insurance usually has allowances for international coverage, but may still require you to pay upfront and send in receipts for reimbursement.

However, basic Medicare plans won’t be much help if you are traveling internationally. You will need to purchase gap coverage or travel insurance if you will be spending significant time outside the country. And, you will have to make room in the budget for it as well.

4. Travel insurance isn’t a waste of money.

To reiterate an important point, you need more flexibility with your travel plans as you get older. Reservations changes, health issues arise, and emergencies come up at the last minute. And the more you travel, the more likely it will happen to you.

Therefore, it’s smart to purchase travel insurance so you aren’t at the mercy of service providers. Many people think it’s a waste of money. But, they probably haven’t gotten stuck somewhere due to weather conditions, service failures, theft, poor health, or simply bad luck. I would much rather pay a little extra for more financial protection and greater peace of mind.

5. Other people have the same retirement plans.

If you plan on traveling in retirement, remember that there are many like-minded people out there who want to visit the same places you do. If you stick to popular destinations, you will have to contend with bigger crowds, limited space, and higher prices.

The solution is to book early and plan ahead to secure your reservations. Or, you could also look at vacation destinations that are off the beaten track. Not only will this allow you to get away from the crowds, but also gives you more solitude to enjoy your surroundings.

6. You can find cheaper ways to travel.

While it should be common sense, the easiest way to book isn’t always the cheapest. We’ve had several packages through third-party websites only to find cheaper deals later on. Sure, they conveniently bundle what you need in a single reservation. But, that doesn’t guarantee the best rates.

Instead, I go directly through the service provider and start looking a few months before our travel dates. I compare prices, set alerts, and scan for daily discounts and flash sales. This has gotten me some killer deals over the years. But even if they aren’t advertising any discounts, they may still offer special rates for senior citizens or members of AARP, AAA, and Costco.

Here are a few other ways to cut corners in your travel budget to help you save:

  • travel in the off-season
  • be flexible with your dates
  • use reward miles and points
  • look at other types of accommodations
  • use public transportation
  • plan your trip around free attractions and activities

It’s also wise to pay attention to the exchange rate if you are traveling internationally. When you are deciding on your destination, look at countries where the U.S. dollar is strong. This can reduce the budget for daily expenses and help your money go even further.

7. Have your paperwork in order before you leave.

Perhaps the most important thing to remember when traveling in retirement is to always get your paperwork in order before you leave. I’ve known several people who have shown up at the airport only to cancel their travel plans because they didn’t have the proper documents.

That’s why I created this checklist to take some of the stress out of the preparations.

  • Confirm your reservations. I always call ahead, check online, and save copies of everything on my phone. Then, I know I’ll always have what I need.
  • Check your IDs. This has been the main reason I’ve seen last-minute cancellations. Before you book, make sure your IDs are valid. If they are close to expiration, apply for a new one as soon as possible or renew your passport online.
  • Apply for your visas. The American passport grants you many landing visas. However, sometimes you will have to apply for a visa. It can be a hassle when they don’t offer it online. But, you can still fill out the application and have it ready when you land.
  • Notify your credit card companies. This is one lesson I learned the hard way. If you have fraud protection, your credit card may lock your account if they see international charges. You will want to call ahead to notify them of your travel plans so it doesn’t happen to you.
  • Make a list of your medications. Many people don’t think of this, but it’s good to have a list of your medications if customs officers ask questions. It is also helpful to your traveling partners and healthcare professionals if you have a medical emergency.

Final Thoughts

Traveling has been one of the most rewarding experiences of my life. But, you can’t predict what will happen or plan for every possible outcome. However, knowing what to expect can make traveling in retirement more affordable and less stressful. Even on a fixed budget, anything is possible with some creative planning.

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The 7 Hidden Dangers of Oversaving

The Hidden Dangers of Oversaving

Consistently saving money is one of the first and most fundamental financial lessons we must learn. But, is it possible to save too much? Come to find out, yes you can. And, it happens more often than you might think. While saving more money than you need seems like a good thing, there are hidden dangers of oversaving.

What is Oversaving?

In general terms, oversaving occurs when you are saving in excess. It happens a lot and can manifest at any stage of life. Sometimes it’s the result of not fully understanding your expenses. Other times, it happens if someone has an ingrained need to save.

From the perspective of retirement planning, oversaving becomes a problem if you are accumulating more than you need to support yourself throughout your golden years. It can affect your current quality of life and create an imbalance in your savings plan. However, smart financial planning can give you a blueprint to help you gain a more accurate picture of your future and avoid the hidden dangers of oversaving.

The 7 Hidden Dangers of Oversaving

Recognizing the patterns can help you avoid these 7 hidden dangers of oversaving.

1. Arbitrarily saving works against your financial goals.

Many people believe that saving alone is enough. Once they deposit the money into a checking or savings account, it sits in there, forgotten. While it’s good to have an emergency fund, blindly saving with no clear goal is counterproductive to your savings plan.

You should be doing more than just putting your money into an account. With the low-interest rates on these accounts, your money will actually depreciate in time. Therefore, it’s wise to find financial products that will increase your rate of savings. If you are oversaving, you need to learn how to plan for your long-term goals and put your money to work for you now.

2. Your retirement planning becomes too generalized.

Financial planning isn’t a one-size-fits-all kind of deal. You can’t rely on standard models and financial software to plan for the future. These tools have many built-in assumptions that don’t apply to everyone. So, you need the ability to customize your plan to help you prioritize what’s most important.

Online estimates and calculators can be extremely helpful for quick estimates. But, you shouldn’t rely on projections without specific context and a serious discussion with your financial advisor. Every financial is unique; your financial plan should be as well.

3. Looking for ways to cut corners in the budget could cost you.

It’s one thing to look for ways to save money. It’s another to force yourself to cheap out on things you need because you think they cost too much.

Although it may not seem like a big deal,  it can impact your finances in big ways. When you try to cut corners on important things like insurance coverage, it can have devastating consequences. It’s not a good idea to skimp out and choose basic plans to avoid higher premiums. Being underinsured could leave you more vulnerable and cost you more than you could ever imagine.

4. Overestimating your retirement expenses can put a strain on your current situation.

One of the most common hidden dangers of oversaving that people encounter is the strain it puts on your current situation. If you are always focused on saving for the future, it can make it difficult to afford the here and now.

This frequently happens when people don’t do a deep dive into their finances to determine how much they will really need in retirement. People often overestimate their replacement rate and fail to account for additional income for Social Security and pensions. This leads them to think they need to save more than they will actually need.

In extreme cases, prioritizing retirement savings may come at the risk of not being able to afford much else. While saving should be a high priority, you should have to sacrifice small things that improve your quality of life now.

5. It can add unnecessary financial stress.

If you are a chronic oversaver, you are probably creating unnecessary financial stress in your life. Living as if you are constantly struggling so that you can put everything away for retirement means that you never get to reap the benefits of all your efforts.

This tendency to always save for later creates a lot of financial pressure that may lead to a lifetime of resentment and regrets. If you are too focused on saving for the future, you can’t live in the present.

6. If it isn’t addressed, it could turn into a fear of spending.

There comes a point when oversaving crosses the line from frugal into a cause for concern. When someone becomes obsessive about saving or afraid that they are on the verge of financial ruin, it may be a sign of a deeper-seeded issue or phobia that require professional attention.

For example, you should never deny yourself basic items to save money. Nor should you feel guilty about buying things you need. If you or someone you care about are exhibiting these behaviors, it may be a good idea to talk to someone about their relationship with money.

7. Oversaving comes with the risk of regrets.

Financial planning is an important step toward a comfortable retirement. However, building wealth and saving for end-of-life expenses isn’t the end-all-be-all. If you plan ahead, you should be able to have enough resources to afford the life you want, both before and after retirement.

However, oversaving could leave you looking back with many regrets. If you are sacrificing things you enjoy, it’s time to reassess your financial plan. The best parts of life require you to take a break so you don’t overwork yourself and can enjoy it with the people you care about. When you are preoccupied with saving money, you miss out on important moments in life. Although it’s important, no amount of money will ever buy you more time.

Striking the Right Balance

So, what should you do if you are oversaving? The best course of action is to discuss it with your financial advisor to help you strike a balance with your savings.

The first step is to do the math to determine how much you will actually need. While the calculations aren’t exact, they will give you a more accurate picture of your future. If you are always focused on the future, it’s hard to enjoy today. Therefore, knowing the hidden dangers of oversaving can help you have a better quality of life after retirement and allow you to live better now.

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How To Set Up a DRIP Investment

How to Setup a DRIP Investment

Dividends are an important way investors create cash flow from their investments without having to sell off their shares. However, what do you do with your quarterly payout? Do you use it? Reinvest in other assets? Or, put it back into the company to help you earn even more? Many people choose this last option and set up a DRIP investment. If you’re considering option number three, here’s what you need to know.

What Is a DRIP Investment?

A DRIP investment, or dividend reinvestment plan, is a popular strategy where you use your dividends to purchase more of a company’s stock. As the name suggests, it drips your earnings into additional shares, slowly adding to your returns.

Each quarter when companies pay dividends to their shareholders, those with a DRIP investment buy more shares with their earnings. When you opt into the plan, it automatically reinvests your dividends every quarter as part of the dollar-cost averaging approach. By making consistent investments at regular intervals, it lowers the average cost of the company’s shares over time.

Investors also have a better purchasing position since they can buy fractional shares as well. Since you can roll over the full amount of dividends into new stock, it compounds your gains and puts all your money to work for you.

If you want to set up a DRIP investment, you can buy them directly from the company or through a brokerage. As an added incentive, reinvestment plans sometimes offer additional shares for a significant discount.

What Are the Pros and Cons?

Every investment strategy comes with pros and cons. Here’s what you should keep in mind when you are considering a reinvestment plan.

The Pros

1. It gives you compounding gains.

When a stock consistently brings good returns, its value will continue to increase over time. As your dividends increase, you have more to reinvest back into the company, which will pay out even higher dividends.

With a DRIP investment, the cycle of profit continues and you earn higher returns every quarter by owning more shares. Thanks to compounding gains, your initial investment has the potential for unlimited growth.


Another advantage you get with a DRIP investment is discounted share prices. Instead of paying the open market price, the company will usually offer a reduced price when you reinvest your dividends. The discount can be anywhere from 1-10% which helps you get more for your money.

3. A DRIP investment reduces your risk through dollar-cost averaging.

Banking on the technique of dollar-cost averaging, a DRIP investment reduces your risk and exposure to price fluctuations. When you buy shares at regular intervals, you are not buying them at their peak or lowest price. And since you get the shares at a discount, this lowers the average price to save you money.

4. Investors increase their position with no additional fees.

Since investors can purchase shares for up to a 10% discount, a DRIP can increase your purchasing position. When you buy shares below the market value, can buy more shares in the company and set yourself up for even greater dividends.

Plus, they usually come with zero commission and brokerage fees. Unlike other investment options, you can avoid trading fees to free up even more money for reinvestment.


Most investments require careful monitoring and adjustments based on market fluctuations. But, this is one of the few investments where you can set it and forget it. It continues making regular investments until you decide to stop. Not only does this prevent you from rash decision-making during downturns, but it also keeps you focused on your long-term goals.


It’s really very simple to set up a DRIP investment. Once you enroll in the plan, your work is done. It automatically reinvests your dividends so you don’t even have to think about it. The plan remains in place indefinitely and requires little oversight since it purchases the shares with no consideration of the market price.

The Cons

1. Plans vary between companies.

Although the structure of a DRIP investment is universal, the plans may vary between companies. For example, they may charge a one-time setup fee or offer different discounted rates when you buy additional shares. To find the details of a particular company’s stock, you should contact their Investor Relations department to learn more.

2. It limits your investing options.

When you sign up, DRIPs will automatically reinvest your dividends for you. However, they will only use it for their stock. If you have other ideas for investing your dividends, then this isn’t the right product for you.

3. A DRIP may have minimums.

As mentioned above, every plan is different. Before you sign up, find out if they require you to purchase a minimum number of shares to participate.

4. It comes with a restrictive reinvestment schedule.

With most brokerage accounts, you have the option to buy stock whenever the mood strikes. However, a DRIP only reinvests dividends when they are paid out. And since this is done automatically, there is no consideration for market conditions. If shares are high, it could end up costing you more to reinvest with the same company.

5. It could create an unbalanced portfolio.

If some of your stocks are paying dividends while others aren’t, a DRIP could lead to an imbalance in your holdings. While this reinvestment strategy has many benefits, an unbalanced portfolio reduces diversification and makes you more reliant on the stocks you own more shares of. This overexposure could leave you vulnerable when market conditions change.

6. You still have to pay taxes on your dividends.

While you can reinvest the entire amount, you still have the tax burden of dividends. Even when you reinvest them, dividends are considered taxable income. If you don’t account for this, you may end up paying out of pocket later on.

How Do You Set Up a DRIP Investment?

Although some brokers prefer not to let a calendar dictate their investment strategy, establishing regular investing habits is good for your long-term financial plans. If you and your financial advisor believe this would be a good addition to your portfolio, it’s simple to set up a DRIP investment.

  • Research which companies offer DRIPs. You can easily find this information online. However, some brokerages may set up their own DRIPs, even if the company doesn’t offer them publicly.
  • Decide which stock to buy. Look into their dividends history to ensure they have a proven track record of profitable performance. It’s also a good idea to choose a stock that will help you maintain a balanced portfolio.
  • Become a shareholder. Once you know what stock you want to buy, you have to become a shareholder. You have several purchase options. This can be done directly through the company, a brokerage, or your online brokerage account.
  • Enroll in the DRIP. The easiest way is to facilitate it through a brokerage. If you use your online brokerage account, the site will usually include tutorials. However, if you choose to go directly through the company, you will have to enroll through their Investor Relations department or with a transfer agent.
  • Watch your dividends grow. Once you’ve enrolled, the DRIP will automatically reinvest your dividends following each payout. It will continue to do so until you opt out of the program.

If you are a new investor, DRIP investments are a great way to grow your portfolio. However, if you plan to live off the dividends, it make not make sense for your investment strategy. As with all investments, you should always weigh the benefits and discuss them with your financial advisor to see if it’s the right choice for you.

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How Does Amazon Fresh Stack Up Against Other Grocery Stores in 2023?

How Does Amazon Fresh Compare vs Grocery Stores?

Amazon has become the largest online retailer with over 300 million active members worldwide. And, it has broken into every industry, including food and beverage. In the wake of Covid-19, it was a natural progression into food and grocery delivery services. Now, Amazon Fresh has many competitors worried as it establishes its presence by utilizing technology, convenience, and wider selections to offer lower prices. But, let’s take a look to see how Amazon Fresh stacks up vs other grocery stores.

What is Amazon Fresh?

Amazon Fresh is the e-commerce giant’s solution for your grocery needs, offering wide selections and same-day delivery. In many respects, shopping for your groceries online is very similar to your other Amazon orders.

Unfortunately, its services are not yet available to everyone. But Prime members in select cities can shop for groceries, everyday essentials, and any other grocery items they may need. When you visit the site, you select your items and add them to your cart. Then, you choose either a pickup time or schedule within the available window with the option of attended or unattended delivery. Once the order is sent out, you will receive the tracking information where you can see its exact location.

While Amazon Fresh has become most popular for its delivery services, there are also a few physical store locations you can visit. You can find their stores in most major cities across the U.S. and a few international locations as well. However, delivery and service fees may apply.

How Does Amazon Fresh Compare vs Other Grocery Stores?

1. Amazon Fresh has competitive prices.

Based on other reviews and my personal shopping experience, the prices are close to being on par with other grocery stores. Depending on where you live and what’s in season, there are a few items that cost much more through Amazon Fresh. But generally speaking, it seems to offer competitive overall pricing.

2. It offers more brands and product lines, but fewer off-brand options.

If you look through their products, you will find all your favorite brands and high-quality items that are available in other popular supermarkets. Since they work with local vendors, you will also have access to specialty product lines. And almost across the board, Amazon Fresh’s branded items are cheaper.

However, there are fewer off-brand options. While they do have their own brands like Happy Belly and Fresh with off-brand pricing, they won’t compare to other retailers who focus on budget-friendly lines.

3. They offer discounts and deals.

Like any other retailer, Amazon Fresh also has daily discounts and deals. You can select items that offer an immediate price reduction or browse through their clearance section to save even more.

4. You can expect reliable service.

When you order through Amazon, you know that your package and payment are safe. So when it comes to ordering through Amazon Fresh, you can expect the same reliable service for your food deliveries.

5. Delivery costs are on par with other major retailers.

Although this had been one of the most attractive features, Amazon Fresh changed its delivery fees in February. While you can still get free shipping for orders over $150, their delivery fees will vary based on the amount you spend.

  • If you want 1-2 hour delivery for orders less than $50, the fee is $9.95.
  • It increases to $6.95 for orders $50-$100.
  • You only pay $3.95 if the amount is $100-$150.

6. Free delivery remains free.

For those who qualify for free delivery, there are no surprise fees. The app will set a default tip, but you can customize this if you wish. However, other online grocery vendors like Instacart tack on additional service fees. With Amazon Fresh, you know exactly how much you will pay for their services before check-out.

7. There’s no option for recurring deliveries.

For busy families like mine, recurring orders help save time and lift the mental load of grocery shopping. However, Amazon Fresh customers don’t have the option to set recurring deliveries. Although it isn’t available yet, many suspect that it will be in the future.

8. Its physical locations bring a whole new shopping experience.

When you visit an Amazon Fresh store, there are many distinct differences from the average supermarket. The first thing you should notice is the digital connection points through the store and parking lot. These allow for:

  • curbside services
  • access to your shopping list or existing cart
  • assistance from Alexa to find specific products
  • the option to skip the check-out line with your Dash cart

You won’t find these options with many other retailers.

9. It serves as an Amazon hub.

Most grocery stores are just that – stores that sell food, beverage, and household items. Some will have third-party vendors in the building as well. But, Amazon Fresh stores serve as a hub where you can send, receive, and return packages. For those who order several times a week, this saves a ton of time and trouble.

10. It isn’t accessible to everyone.

To use Amazon fresh you have to (1) have an Amazon Prime membership and (2) live in a city close to one of their stores. Currently, there are a limited number of locations, so it isn’t accessible to everyone.

Cost Comparison of Amazon Fresh vs Other Grocery Stores

Although Amazon Fresh is not available in my area yet, I wanted to see the savings for myself. So, I used the last address in my account which was near one of their stores. Then, I used a recent grocery list and compared it to one of the largest local competitors, Publix. Here’s what I found.

Grocery ItemAmazon FreshPublix
1 loaf, wheat bread$3.99$4.41
5 lb. bag, white flour$5.99$6.19
4 lb. bag, granulated sugar$3.39$3.25
15.4 oz. box of Cheerios$6.29$7.27
½ gallon whole milk$3.99$3.91
1 dozen large eggs$4.39$5.53
1 lb. ground beef$8.85$7.55
1 lb. boneless chicken breasts$7.99$8.29
1 lb. bananas$1.59$0.77
1 lb. Honeycrisp apples$1.69$1.93
1 lb. grape tomatoes$3.69$4.53
1 lb. yellow onions$0.99$1.09
1 lb. Russet potatoes$1.49$1.79
14.5 oz. bag of Doritos$5.99$6.63
12-pack Coca-Cola$8.79$9.75
24-pack spring water$7.99$7.75

Is Amazon Fresh Worth It?

If you are a Prime member and Amazon Fresh is available in your area, it is definitely worth looking into. Not only does it offer competitive pricing on most products, but it also has a great selection of brands and items. When you look at the final tallies, it shopping with Amazon Fresh vs other grocery stores may cost less if you make sure to reach their spending threshold for free delivery.

However, if you don’t have an Amazon Prime membership and don’t spend this much for every trip to the grocery store, it probably isn’t worth it. And, it’s not a great option when you need something now or prefer to pick out your own produce.

But, there will always be people who believe that their time is more valuable than the service fee they are willing to pay. If you’re interested in their services, sign into your Amazon account to determine if your zip code is eligible to start saving today.

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