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Why Investing is Crucial for Women As They Plan the New Year

January 25, 2012 By 1 Comment

The new year has come and gone and things have settled down for most of us. Many people (myself included) begin the new year full of energy and ready to go. We are full of ideas and things we want to accomplish in the new year. Then somewhere around week two of the new year, things slowly start to fizzle out.  By the end of January, the resolutions and goals are forgotten about and it’s back to the same old routine of life. We might have wanted to save more money or lose those last 10 pounds this year, but settling back into what we are comfortable is just too easy.

As women, what if we could take one area of our finances and make a difference this year? I want to focus on investing because I think this is the one area that women fail to take action. Sometimes it’s out of fear, sometimes it’s out of lack of knowledge but whatever the reason, more women need to get started investing and they need to do it now!

According to the Women’s Institute for a Secure Retirement, elderly women are twice as likely to live in poverty as men and experts do not predict much change in the future because:

  • Women earn less money than men and have less to save;
  • Caregiving responsibilities make women more likely to leave jobs or work part-time and forfeit pension benefits as a result,
  • And women are more likely to work in occupational sectors, such as the service industry, where pension benefits are less common.

If you’ve been putting off saving for retirement, consider this article your wake up call. Here are four reasons why investing is important as you plan the New Year:

Reason 4. Build - We all know saving for the future is important, but for some of us, the future seems so far off we are not that worried about it. Instead of building our nest egg, we worry about what we want now and our spending and savings reflect that. Building your nest egg is an important component of your financial picture. Not only are you building your financial foundation, you will have the peace of mind knowing you can rely on yourself when it’s time to retire.

Reason 3. Benefit – If you have yet to start investing, one thing you are missing out on is compound interest. It’s never too early or too late to get started investing but the earlier you start, the more you will be able to utilize the power of compounding interest. Investopedia defines compound interest as interest that accrues on the initial principal and the accumulated interest of a principal deposit, loan or debt. Compounding of interest allows a principal amount to grow at a faster rate than simple interest, which is calculated as a percentage of only the principal amount. By starting early, you are able to grow your investment account at a faster rate because time is on your side.

Reason 2. Control - Being in control of your money is a much better place to be than constantly living in a state of financial chaos. When you are in control, it can help alleviate financial stress and worries about the “what if” situations that may come up in the future.

The number one reason investing is important for women as they plan the New Year is Empowerment. Empowering yourself and your financial situation is such a huge hurdle that I don’t think many of us women ever get across. We rely on other people to make our financial decisions and along the way we lose a little bit of our own security. When you take action and do something to propel your situation forward, it can be a huge relief. Not only are you taking actionable steps today, you are planning to take care of yourself in the future.

Do you want to become one of the statistics I mentioned earlier in the article and live in poverty or do you want to change your situation? You have the control to make a difference this year so my only question to you is, what are you waiting for?

This post was featured as a part of a series by Betterment.com called Blogging for a Better New Year.

Filed Under: Blog, Featured Bar, investing, Retiring

Women & Investing: Betterment Makes Smart, Goal-Based Investing Accessible to Everyone

January 2, 2012 By 8 Comments

Unfortunately the statistics show that women & investing do not go hand in hand. Statistics compiled by the Stockton Women’s Networkshow 38% of women 30-55 years old are worried they will live at or near the poverty level because they cannot adequately save for retirement. If that’s not scary enough, how about this: Among women who live alone, spending peaks in the 25-54 age group. There are about 15 million women who live alone, 48% are over 65.  54% of women have little to no money left to save for retirement once they pay their bills.

These numbers are heartbreaking! I hate seeing numbers like this and statistics like this are one reason why I started this blog. I not only want to help educate women on getting out of debt but also on the importance of building wealth! I want to help change those statistics so women are educated and motivated to save for retirement.

You may remember last year that I started educating myself on investing and decide to test out the waters with my own investment account. While it worked out fine and was a great learning experience, I’ve kind of been stuck at this “now what?” roadblock. I don’t have thousands of dollars to throw at that account monthly but I still want to  focus on becoming more educated on building wealth through my retirement strategies.

I initially heard about Betterment on Twitter. I had seen several tweets about people attending Betterment’s webinars so I was generally curious. I watched the demo, read about the company and why it was founded and thought why not give it a try? I haven’t done any more investing on my own since my original post mainly because I didn’t really know where to go next! Plus with the expenses involved in trading, I had to have larger sums of money to invest to make the trade worth it & I’m just not to that level yet. Enter Betterment.

What is Betterment?

It’s smart investing made easy. Betterment puts a personal investment account in your hands by blending the simplicity of an online bank account with the higher long-term returns associated with investing in stocks and bonds. The best part? You don’t have to spend nights and weekends researching—that’s our job.

That sounds good to me. Investing can be so intimidating and overwhelming. Where do I start? What if I make a mistake? Will I wipe everything out? I like the simplicity Betterment has to offer for a beginning investor.

One of the questions I had about Betterment was around the type account I was setting up. (See, I’m new to this too!) Was I setting up an investment account, an IRA, a Roth IRA? What exactly was I doing?! I contacted their customer support and got a very quick response. Here was the answer:

Hi Jenny,

Thank you so much for setting up a Betterment account. The short answer is that it can be both. When you set up a Betterment account by default you have a taxable investment account. We are the broker dealer and funds you deposit are automatically invested into a set portfolio, while the allocation between stocks and bonds is chosen by you.
Once you have an account, you are able to then open up an IRA account as well. To do this, you can sign into your Betterment account and at the very bottom you can choose to open up a new goal (sub-account) or you can open an IRA account. You are then given the option to open a ROTH or Traditional IRA, and you can also choose to roll over IRA’s or even a 401k into an IRA.

That answer helped clarify things for me. I already have a couple of IRA’s & a Roth IRA so right now, I’m looking for an investment account but I like having the IRA options as well. I had another question around withdrawing the funds & here was their answer:

Regarding withdrawals, there are no fees and no penalties for withdrawing funds from your taxable investment account. With Betterment you only have but the one advisory fee and nothing else. This allows you to make consistent contributions to your investment and IRA account without having to worry about stacking up trade fees because you have 8 securities you are diversified across. In fact, at even $7/trade that would mean you would pay $56 each time you deposited money into your account. With Betterment, there is no charge for any of the trades made when you deposit, withdraw or change asset allocation.

Another nice thing about our only having a fee on the balance of your account is that there is no charge when you have no balance. We know that people need access to their money, and if you need to withdraw funds from your account there is no charge. Also there is no charge to have your taxable investment account and only have money in the IRA portion. While we do currently require that people set up a full Betterment account to take advantage of the IRAs, we will only charge a fee on the services you actually use, and only when you’re using them.

I’m glad they brought up the point about the cost per trade because that was one problem I had when I was toying around with investing on my own. I couldn’t very well just buy $25 in stocks because the fees would make that type of trade pointless! Since Betterment has no fees to deposit, withdrawl or change asset allocation, it’s a better option for me.

I still had a follow up question after this response so here is what I asked: You said ” While we do currently require that people set up a full Betterment account to take advantage of the IRA’s…” do you mean that I am required to set up an IRA (Roth or Traditional) or can I just keep the taxable account?  I’m new to investing on my own outside of the 401k so I just wanted to make sure I understand this.

My second question was answered just as timely as the first and here was the response:

Hi Jenny,

You do not have to set up an IRA to have a Betterment investing account, but you do have to set up a Betterment investing account to set up an IRA. It’s a bit chicken before the egg, but by default everyone who sets up a Betterment account automatically is setting up a taxable investment account, and then you elect to set up an IRA. I hope that helps clarify.

So what that means is when you set up a Betterment account, you are setting up a taxable investing account which you can withdraw from as needed. Any withdraws are subject to capital gains tax on the amount you made which is sent to you in the form of a 1099-Misc form for your taxes.

If you wish, you also have the option to set up a Traditional or Roth IRA (Individual Retirement Account) to save for your retirement. With this type of account, you can deposit to it but you would not want to withdraw from it until you retire otherwise you will face a taxable penalty.

Betterment Benefits

Betterment provides benefits for any investor who values time, accessibility, and market returns. Here’s a list of just a few:

  • A straightforward pricing model without hidden fees.
  • No minimum balance.
  • Automatic deposits to minimize your average investment cost.
  • Focus on the two investments that matter the most – a great stock basket and a conservative bond portfolio.
  • An incredibly simple user experience that makes it easy to understand your money and control your exposure to risk.
  • Automatic, seamless diversification (which means higher returns with lower risk).
  • Automatic rebalancing every quarter.
  • Automatic dividend re-investment to save you time and energy.
  • The ability to see how others like you invest.
  • Transactions in exact dollar amounts, instead of whole shares.
  • Goal-based advice and accounting.
  • Access to your account, whether at home or on the go.
  • Dedicated customer service, so in addition to receiving advice online, you can chat with real people when you need them

My Thoughts & Feedback

I set up my Betterment account & it was just as easy as they said. I linked my Betterment account to my PerkStreet Checking account & funded my account with $25. My next step is to confirm the two small deposits Betterment has put into my PerkStreet Checking account (which I am still waiting for). Then my accounts will be linked & I’ll be ready to go!

I think the thing I like about Betterment the most is its so easy to use. Investing is intimidating and seems complicated but the platform Betterment uses eliminates that for you. Betterment makes it easy to avoid becoming one of the women & inveseting statistics. I get asked by A LOT of you how to start investing and after reviewing the process & what they have to offer,  I think Betterment is the place to do that.

Next Steps:

Betterment is offering a free webinar on How to Build Your Perfect Investment on January 5, 2012. If you are interested in learning more about what Betterment has to offer, follow these steps:

Don’t forget to check out Betterment’s Blogging for a Better New Year throughout January for great advice to help you finally meet your financial goals in 2012. I’ll be featured as one of the bloggers at the end of January, so you won’t want to miss out!

 

Filed Under: Blog, Featured Main, investing, Personal Finance, Retiring, Saving

The Stock I Bought is Up $1,759.19 This Week!!

October 28, 2011 By 11 Comments

I know I have been slacking on my Friday posts about building wealth but to tell you the truth, this is one area I really struggle in. I can talk to you all day about budgeting and personal finance as a whole, but when it comes to investing & retirement, I don’t feel that confident.

One thing I’ve been trying to do this year is educate myself more on investing and retirement. I’m trying to read and learn as much as I can so I can write about it and hopefully you can learn with me too.

Earlier this year, I started subscribing to a newsletter called Crashproof Prosperity for the investment education. The newsletter is written by Kip Herriage who was a financial advisor on Wall Street for over 15 years but was fed up with the way Wall Street worked so he decided to do his own thing. Kip has written a newsletter since 2006 called The Vertical Research Advisor (VRA). This is where I started to educate myself more on the topic of investing.

What I get out of Crashproof Prosperity

The two things I get out of Crashproof Prosperity are 1. a subscription to the Vertical Research Advisory Newsletter (education) and 2. commentary on what is going on as it relates to investing and economics from Kip Herriage,  Gerald Celente and Wayne Allen Root. I won’t go into great detail on who those people are in this post but I’ve linked to their websites if you’d like to learn more.





How it Works

Once I was a member of Crashproof Prosperity, I was able to have access to the “core portfolio” recommended by Kip. This core portfolio is a list of 8-10 stocks that Kip feels like are the ones to invest in. You might be wondering how he picks the stock he recommends:

“How do we select our stocks”? A significant amount of research has been done over the last 20 years in order to perfect the system of stock selection…and the research is extensive. After a company has been selected as an interesting possibility (we speak with hundreds of company insiders and industry experts each year), we then begin a two-pronged approach. While we are speaking and meeting with the company’s top insiders, we are also researching their competitors, carefully analyzing SEC filings, and using proprietary fundamental and technical screens. This approach allows us to uncover companies that fly under the radar screen of most Wall Street analysts (who operate to a large degree based by what the company will pay in investment banking fees) and mutual fund managers. Ideally, we enter a stock 1-3 months before it is “discovered” by Wall Street and the global markets. Members are updated on a regular basis with news, proprietary analysis, or a rating change on recommended companies.

Remember,Kip was on Wall Street for 15 years and has been researching this and picking stocks for years. Is he always right? Not always, but I feel confident in his choices. Currently, the whole VRA portfolio is up 35% in the past month.

No one at Crashproof Prosperity or Kip manages your money. You do this on your own by opening your own brokerage account with Scottrade or Etrade – or whoever you prefer. This was one reason why it was so appealing to me. I was able to get the financial advice and do what I want with it. I could buy if I wanted or not. It was up to me.

What I do 

While I admit, this was scary at first, now I’m loving watching and learning how this all works. There was one particular stock listed in the core portfolio I was interested in. Kip calls it “the stock of the century” so I sat on it for a long time (about 5 months ) before actually buying any.

After I got laid off, I transferred a portion of my retirement account from my employer to my own retirement account at Scottrade to buy this stock. I call this my “play money”. It makes up about 13% of my whole retirement portfolio – which I know isn’t a small amount but I’m willing to use it to learn with. ( The other 87% of my portfolio is managed by a trusted broker). Call me crazy but I feel like it’s one of those things it’s best learned by doing, not just observing.

The “stock of the century” is on the move this week and my account is up $1,759.19 this week. Yes I know it is stock and it can fluctuate depending on the market but it was really exciting for me to see this because it was the first thing I’ve really every done on my own with investing. Instead of just sitting on the information and assuming I couldn’t do it, I did the following:

  • I sought out investment information
  • I educated myself and didn’t make an impulsive decision
  • Then I acted on it
I don’t know what will happen with this stock, it could be down as much next week. But I feel I’m young enough to be able to take this risk now and I’m hoping it will pay off later. If you are interested in learning more about Crashproof Prosperity or getting your own subscription, click here or on the banner below.

 

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Filed Under: Blog, Featured Main, investing, Retiring Tagged With:

Use Adaptu to Manage Your Finances Online

October 24, 2011 By 11 Comments

I’ve been on a quest recently to finally start to manage my finances online. There are two reasons I’m doing this. The first one is I need the accountability of the alerts and reminders so I can gauge where I’m at with my budget. The second is I need the visual so I can see what I’m actually spending every month. Up until now, I’ve always managed my budget with a pencil and paper. Yes that’s right, I’ve never done anything online or with spreadsheets to manage my finances. On the one hand this is good because you don’t spend a lot of time trying to set things up online (like I did with Mint, 2+ hrs later and I still didn’t have the thing set up correctly). The downside to this is you don’t ever end up going back and seeing what you actually spent for the month. At least I never did. It was too much manual work and I just assumed I was spending where I should.


Of course, I know now I wasn’t spending according to my budget and I could have been doing a lot better. So I’m finally moving into the 21st century and managing my finances online. I want to be accountable to myself  and get awesome visuals of how good or bad my month was going. I tried to use Mint, but as I said earlier, I spent over 2 hours and still didn’t have my budget set up the way I wanted so there are still too many bugs in that system to make it worthwhile for me.

Enter Adaptu.

Who is Adaptu?

We created Adaptu to help individuals and their families who wanted to better understand their finances, what choices/options are available to them and feel confident in the decisions they made. While we saw the importance in seeing your financial data, knowing what to do and asking questions to help make the right choices for you was still missing.

Adaptu is a new, free online financial life planning and management service. Members of Adaptu can create a personalized view of their financial life and engage with a community to help take a more active role in the financial decisions that will affect their lives. At Adaptu, we want our members to be empowered. We want them to see how every financial decision you make has an impact on the next. With a solid understanding of your own financial situation, we think you will be more prepared for those big moments in life- and closer to the financial security everyone dreams about.

So how do we do this? We help you understand where your money is going, where your money has gone. And where you need to plan for the future. We also show that you aren’t alone in this journey. Connect with others in the community to see how they may have gotten themselves through a similar situation. With a plan in place as you actively take part in your finances, you have a much better chance of reaching your goals.

Features of Adaptu

1.  Manage my finances- You can upload all of your financial data, track bills, see a financial calendar, and even manage various reward programs all through Adaptu.

 

2.  Manage my Investments – This section provides a forward-looking view to help you manage your investments.

3.  Investor Center – Here you can learn about finances, track stocks, research markets and get the latest news feeds.

 


4.  Adaptu Community - Interact with others experiencing the same financial decisions in life. Read blog posts, participate in discussions, watch videos, join groups and more.

 

How Is Adaptu Unique?

One of the most innovative aspects of Adaptu is the focus on life moments: those expected and unexpected events that can make a drastic impact on personal finances.

Why I like Adaptu

  1. It’s free. Yes totally free. I love free.
  2. It’s easy. I connected my PerkStreet Financial Bank Account to Adaptu, it scanned my transactions and started adding my categories. This took less than 5 minutes. No kinks! It worked like it was suppose to!
  3. I can create a monthly budget for myself and see the visual representation of what I’ve spent. I’m finding the visual is the most helpful for me since I’ve never looked at my spending habits in a pie chart before.
  4. I can set my account up to get alerts via email or text message when I have a low balance, a bill due or withdrawls and deposits. I like the alerts because it serves as a reminder and helps keep me on track for the month.

There is a lot of information on the Adaptu site and it can seem a little overwhelming at first. I found a few things were hard to find (like how to set up a budget in Adaptu and how to set up alerts in Adaptu).  The search feature works very well so if there is something you can’t find, try searching for it because it is likely there. The one thing I didn’t see (and maybe I missed it) was a way to set up overall financial goals, instead of just budgeting goals. I would like to see a feature so I can track how much money I have to meet my savings goal, etc.

Managing your finances online is just another tool in your tool box that can help you meet your financial goals. While I’ve been really late to implement this, I feel like it will really make a difference in how I handle my finances to keep me accountable. Visit Adaptu.com to learn more.

 

Filed Under: Blog, Budgeting, Featured Bar, investing, Personal Finance
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