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How to Talk About Money with Your Partner

Posted Leave a commentPosted in Budgeting, Finances
Discussing Finances with Partner
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Is there a right way to talk about money with your partner? There certainly is. After all, you don’t want to end up arguing over money. If you can approach the topic of money in the right way, it should be much easier to talk about!

It’s well known that money problems are one of the leading causes of divorce. To help you avoid becoming part of these statistics these tips will help you to find it easier to talk about money with your partner.

Tips For Talking About Money With Your Partner

These tips are easy enough for anyone to follow. Remember, the goal is to build trust with your partner and have honest communication with them about money.

Learn To Compromise

Everyone has their own values when it comes to money. Some people love to spend, spend, spend! Others like to save as much as they can for a rainy day.

If you and your partner share the same values that’s fantastic and will make life more harmonious.

However, problems can arise when your opinions differ. Maybe one day you want to make a large purchase using credit, but your partner is dead set against it as they don’t like taking on more debt. Here is where learning to compromise will make it easier.

There will be times when one of you might have to agree to disagree. Alternatively, you may need to compromise by agreeing to a solution in the middle. For example, you may agree you will use credit for purchases, but only up to an agreed amount. 

Understanding each other’s values and learning to compromise is a great way to build trust with each other around finances.

Don’t Dwell On Stuff

Money is something we all must learn to manage. When we are combining finances with a partner it’s best to discuss how we feel about money openly and honestly.

Sometimes people fail to do this which means over time resentment builds up. Your partner may spend too much, save too little, or just not care about making sure bills are paid on time.

Whatever the problem is if you don’t say anything it will never get better!

Don’t dwell on things until it explodes into an argument. Discuss money daily to make sure you are both in agreement with how it’s being managed.

Be A Team

When you’re in a partnership it means you need to be on the same page when it comes to money and hopefully everything else. One great way to be a successful team is by playing to each other’s strengths.

One of you might be super organized which means they are better at planning the budget and tracking spending. The other partner might be awesome at saving and living frugally. Giving responsibility for each task to the right person is a great way to be a successful team.

This doesn’t mean you aren’t both involved. Make sure you still make decisions together and talk about all options. It’s important you both know what the other is doing!

Don’t Be A Financial Cheater

Financial Cheating
Photo by Anete Lusina on Pexels.com

There may be times you think keeping a purchase a secret is a good idea. Perhaps you think your partner will be angry and you want to avoid an argument.

Recent studies show that more than half of Americans have committed financial infidelity. Financial infidelity includes things like secret spending, hiding debts, and not declaring savings.

You may think you’ve got a good reason to hide the truth from your partner. However, when they find out the truth the relationship could be ended. Even when small amounts are involved that loss of trust can be hard to win back. 

The good news is that if you are following the other steps and regularly talking about money, you shouldn’t need to lie!

How To Talk About Money

Whether your relationship is new or decades-long you may be struggling to bring up the topic of money. It can be difficult if it’s something you’ve argued about in the past.

To start with it’s best to bring up the topic of money when you are both willing to talk about it. Simply ask the question, ‘Hey, would you mind if we chat about money for a bit?’

By putting this simple question out there first your partner should hopefully feel at ease to discuss the topic. This makes things much easier instead of just diving into tough questions without warning. Sometimes your partner may say no – that’s OK. Just let them know it’s a topic you need to talk about soon. 

Of course, if they keep avoiding it, then you may need to decide if that’s a deal-breaker for you and consider ending the relationship.

It’s also advisable to talk about the easy things first. Start by talking about long-term goals. Leave things like tackling debt for when you are both more comfortable.

Finally, some people feel very vulnerable when discussing their finances. It can be especially hard for people that have struggled with debt, mental health, or maybe financial abuse from parents or a previous partner.

Keep this in mind and don’t be judgmental about their past behavior. You are now a team and should be building trust in each other. This means whatever problems there are you will tackle them together going forward. Judging will only upset your partner and possibly cause a relationship break down!

Two Ways To Improve Your Finances

OK, you and your partner now know some awesome ways to better talk about money. If you are struggling with money here a couple of suggestions that might help you improve your situation.

Be Frugal

To live frugally doesn’t mean never spending any money. It simply means you are extremely careful about every cent you spend. Living frugally is a great way to become better off financially, get out of debt, or just live a simpler life.

Frugal living tips include budgeting every cent, saving as much as you can, and using cashback sites to earn some money back. When shopping, always hunt for bargains and try switching to cheaper brands. Many cheaper options are just as good as the big brands!

Don’t forget as part of creating a frugal budget to negotiate all bills and cut out all unnecessary spending. 

Start A Side Hustle

A great way to improve your financial situation is by starting a side hustle. How can you make an extra $1000 a month? The great news is there are lots of ways to make extra money. $1000 extra month is doable with a little effort.

With that extra money, you could pay off debt quicker, build an emergency fund, or simply use it as spending money. Remember, you and your partner should agree about what you are doing with the money!

Blogging, freelancing, driving for Uber, and selling handmade goods on Etsy are just some of the hundreds of things you could do to earn extra money. Have a think about your skills and see if you can use them to start a side hustle.

Maybe you could even do something together!

Next Steps

Now that you’ve read these tips, I hope you feel better about discussing money with your partner. You should be able to talk about money without it turning into an argument if you stick to this advice. 

Chris Panteli
Chris Panteli

Hey, I’m Chris. I have a degree in Business Economics from the University of Liverpool, own a small fast food business and run LifeUpswing.com. I will help you to make money, save money, and think about money in a way that will give you back your freedom.

Financial planning for 2021 – 5 Practical Tips to Protect Your Money

Posted Leave a commentPosted in Budgeting, Finances

The New Year is the perfect time to think about how you can bring positive changes to your financial life. It is time to sit with your family and create a financial map to reach your money goals for 2021.

In this post, we will discuss 5 tips that can help you to protect and improve your financial life.

5 Tips to Improve Your Finances in 2021

After a disastrous 2020, it is time to take care of your financial life.

Here are a few tips to help you improve your finances in 2021.

1. Set your financial goals for 2021: The first tip is to set up specific, achievable, and realistic financial goals for yourself.

Be specific about what you want. For example, your financial goal can be to stop making useless expenses and save money.

But is this specific? No.

What is a specific financial goal?

A specific financial goal is something like this. “I will save a thousand dollars every month.”

When you are determined to save a thousand dollars every month, you know exactly what you have to do. It is a specific, realistic, and attainable goal.

Another example of a realistic and attainable financial goal is contributing $100 to retirement savings accounts every month.

Have you noticed that in both examples, there is a time factor? You are contributing $100 to your retirement savings plans every month. This means that you will have to gather money for the contribution within 30 days.

Do not set vague financial goals as it is hard to devise a plan for achieving them.

2. Create a budget that you can follow: Do you know what the foundation of a healthy financial life is? It is the household budget.

A household budget helps you to track your expenses. It helps you to understand where you are spending money and where you should not spend money. It shows you the areas where you can potentially save money. If you do not know how to create a budget, then you can download a budgeting app on your smartphone.

Read reviews of budgeting apps online and download any one of them to stay on top of your finances.

Make sure you create a simple and realistic budget that you can follow. Avoid making a shoe-string budget that doesn’t give you any breathing space.

3. Pay off as much of your debts as you can: 2020 is gone. You have to think about 2021 now. Last year, you skipped payments on your debts without any trouble. But 2021 is different. You have to think about the best way to reduce credit card debt.

Ways to reduce credit card debt in 2021

You can settle your debts to pay less than what you owe.

You can consolidate your debt to pay back your creditors in easy monthly payment plans.

You can file for bankruptcy if you don’t have enough financial resources to pay off your debts.

4. Build an emergency fund for unforeseen expenses: Several people suffered from a cash crunch in 2020 due to various factors like job loss and pay cuts. Most of them didn’t have an emergency fund. As such, they couldn’t do anything to protect their financial life.

Do not make this mistake in 2020. Save money to build your emergency fund. It will help you to tackle emergency expenses. Usually, financial experts recommend saving 3 to 6 months’ worth of living expenses. However, in the present circumstances, when everything is uncertain, it is best to save 9 to 12 months’ worth of living expenses.

If you do not have an emergency fund, make sure to create one in 2021. Reduce your expenses wherever you can and do side-hustles to generate enough cash to build your emergency fund.

5. Invest to grow your money and secure your future: Forget what happened in 2020. 2021 is a new year, and you should start it fresh. 2020 was financially challenging for everyone. If you received a pay cut in 2020, then you might not have invested your money anywhere. Think about how much you can invest, and where this year will be. Smart investments help you grow your money over time.

If you want to invest in the stock market, find out the companies that are likely to grow in the long run.

Make sure you invest your money in retirement savings plans, especially when you have not made a contribution in 2020. You need to build your nest-egg to secure your financial future.

Final note

Let’s kick-start 2021 with a fresh resolve to build a healthy financial life. Let us avoid making expensive money mistakes and follow the five tips mentioned in this article. If you can do this throughout the year, you can improve your finances and achieve all your goals in 2021.

Best of luck!!!

Aiden White
Aiden White

Aiden White is a financial writer who lives in Dudley, Massachusetts. She started her financial journey in 2016 and has been associated with consolidatecreditcard.org for the last 2 years. Through her writing, she has inspired people to overcome their credit card debt problems and solve their personal finance based queries. Being a debt fighter in her personal life, her goal is to share innovative thoughts and knowledge in the debt communities.

crop man counting dollar banknotes

Second Stimulus Round 15…

Posted Leave a commentPosted in Budgeting, Finances, Investing, Real Estate, Stock Market
crop man counting dollar banknotes
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So here we go again… round 15… Yes, being a bit dramatic about it but this entire process took entirely too long. This next round of stimulus checks might not be enough to put a dent into the debt some people may have racked up during the past 8-9 months…

The last stimulus bill was passed March 27th 2020. With the CARES Act expiring at the end of the month, this small amount may be helpful for some. However, as I said in the beginning, this isn’t much help at all.

Related: Will the Stimulus Help
Related: CARES Act – Forbearance or Deferment

So, with all of that said, this post is mostly geared towards those that are still afloat during the pandemic and not behind on bills. It’s unfortunate, but a large majority of Americans will have to dump their entire stimulus check into back owed rent or other debts that have accrued over the last 8-9 months. I do empathize with you all that are still struggling… I am really hopeful that with the COVID-19 vaccine making it’s rounds; we can return to some type of normalcy within a few months…

What should I do?

For those of you that meet the criteria to receive stimulus checks that are up to date on your mortgages, rent, and payments what will you do? You are about to get $600 for yourself and each dependent 17 and under within your household. It’s not much, but for some of you, this may be a good opportunity to start investing. If you are debt free, this might be the right time. If you are not sure if the time is right for you to invest yet, check out my article on the 7 Steps to Financial Freedom or listen to the podcast episode here.

Don’t go crazy and dump everything into penny stocks hoping to hit it big. Be mindful of how you employ this money to work for you. “Free Money” most definitely comes with a price. The more stimulus payments that get issued and bailouts for corporations that happen, the more potential we have for some serious inflation. This is a good time to try and turn that $600 into something a little more.

Maybe look at investing in some REITs, index funds, or ETFs. This can be your opportunity to start building a passive income with dividend payments. It takes a lot of money to be invested before dividends start looking nice, but this can be your start.

If you have been looking to start your own business but didn’t want to cough up a few hundred dollars to start one, maybe this is the beginning. If you are able to invest this money in yourself or your business, then that works too. Maybe it’s a side hustle you’ve been thinking about. Maybe you wanted to open an Etsy shop but didn’t have the materials to do it; now you can buy those materials and get started.

Conclusion

The main takeaway of this post is to NOT use this money to go buy another PS5 or laptop, but to invest it into something that can help you build your wealth. Use this as your initial push rolling into 2021 to make this next year your best one yet. We all know this year was pretty much a wash… However, just because there is craziness in the world, it’s no excuse to not set goals and crush them. I started a podcast this year and it’s been awesome! Let’s roll into 2021 goal oriented and ready to attack it.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

Aspiring Entrepreneur? Plan Your Escape From Your Job.

Posted Leave a commentPosted in General
Aspiring Entrepreneur

Have you ever thought about walking away from your current 9-5 job to start your own business? What’s stopping you? It’s likely to be one of two things: common sense or integrity. Both are very valuable traits.

Common Sense and Integrity

Common sense says that you most likely have commitments, obligations, and responsibilities that show up monthly, weekly, and even daily. Would it be smart to risk any of those commitments? It could cost you big time in the immediate future or long term.

You would put both yourself and your new business under immense pressure if you went in without being prepared.

It’s significantly better to have a support system in place when starting a new venture. Your family, friends, and countless other individuals can play a significant role in your future success.

Integrity takes a long time to earn. The integrity you have earned at your current job will give you some credibility to start with. Use the integrity you have built with your employers and with your work colleagues as much as you can. These could be very useful and influential contacts in the future.

It’s unwise and unhelpful to put your integrity in jeopardy.

So, instead of just pulling the plug, it’s important to plan your escape. Common sense and integrity need to be your guiding principles moving forward.

Business Preparations

It makes good sense to do plenty of research on your new business and get all your questions answered before you make any decisions. Here are a few things you can take in for consideration.

  1. Get an insider’s opinion. Getting an insiders’ view would serve you well. Standing on the outside looking in is significantly different from being on the inside looking out. It could save you time and money as you move forward into your own business.

    – Find someone who has already done something similar and ask them, “If you were doing this all over again, what would you do differently?”The answer they provide will be the most valuable conversation you could possibly have for your new business.
  1. How will you generate a profit? This is a crucial part of moving forward with a new business. It’s important to figure out, the easiest and most effective way of generating a profit from your new business. Yes, a profit… income… not just breaking even. Both the business and you as an individual will not survive without an income.
  2. How will you scale up? Determine what you need to have in place to scale your business to grow. Customers are key! They are the people who will provide your profits and build the reputation of your business.
  3. How much time do you need to get the business started? Determine how much time you have available to get your business off the ground. Naturally, the more effort and energy you put in, the quicker everything will go.

Once you’ve determined these aspects, it should be possible to calculate what needs to be done in order for you to create a timeline for escaping from your job.

Related: I am Afraid of Being Laid Off

Start Your Business Wisely

So, now you can quit your job, right? Hold on a second! You’re almost there!

Many smart people get their business into the marketplace by working part-time from home while they keep their regular job intact. Even if it takes 9 months or a year, or even a couple of years, to get it working efficiently and effectively, it’s got to be worth it, right?

Remember to factor in some wiggle room for the unexpected… Make room for some down time and even holidays.

Talk to people who have already made a similar transition to get an idea on what is reasonable and doable for your situation.

Author’s note: I personally started my own business while still being active duty in the Navy. Becoming a licensed REALTOR-ASSOCIATE®, investing in real estate, and starting a blog and podcast. It’s been an absolute blast so far.

Check out our Average Joe Finances merchandise here

Work Smarter, Not Harder

Your new business should have no requirement for you to work 40+ hours a week. Your intent is to move on up in terms of profit and income potential and move down in terms of time needed to create it.

Consider different ways to work smarter, not harder. If hard work was any guarantee of success, most new entrepreneurs would already be wealthy.

It’s not about working hard. Your success will come from having a plan, an effective strategy, and the discipline and enthusiasm to follow through on it.

Speaking of working smarter and not harder… Check out this post by Bella Wanana regarding tax deductions here. Knowing about tax deductions and what you can claim with your business can save you tons of money.

It’s time to work out a sensible plan to quit your job once you can check off these two items:

  • You’re confident that you have a profitable business plan.
  • You’re working part-time on your business and showing some profits

Yes, this entire process takes patience. Just remember what your “why” is. In time, you’ll look back at the job you once had and smile knowing that you have replaced that income with something that’s your own.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

How to Resolve Information on a Credit Report

Posted Leave a commentPosted in Finances

The information in your credit report can affect many areas of your life. It’s important to keep track of what’s in it. If you find incorrect information, it’s your job to dispute it and have it removed from your credit report. ONLY YOU are looking out for your own credit rating, no one else… Pay attention to your report!

There are actually three credit reporting bureaus: Experian, Equifax, and Trans Union. Make sure you are monitoring all three of these credit reports. It’s essential because the information can differ from report to report.

Follow this process to ensure your credit reports are accurate: Request your credit report

There are a few methods to track your credit score and credit reports. The fastest way to get a copy of your credit report is to visit Annual Credit Report. You’re entitled to receive a copy of each of your three reports for free once per year.

If you haven’t been following what’s in your credit reports, start out by requesting all three reports at once. The information they contain can actually vary quite significantly, depending on which creditor has reported what to them. Differences from one report to another can amount to a significant credit score difference.

Once you’ve obtained and corrected past information in your reports, you can stay updated by spreading out your credit report requests to every 4 months. Request your report from one of the credit reporting agencies every 4 months. Over the course of a year, you’ll have received all three.

Promptly correct mistakes in all 3 of them if you find an error.

Information accuracy

Comb over all three credit reports carefully in search of incorrect information. Any detail that isn’t right should be changed, even if it’s just a wrong address, because these pieces of information can have an impact on how lenders view you when considering your loan application.

Contact the credit reporting agency

If you find information that needs to be changed in your credit report, the next step is to contact the agency (Experian, Equifax, or Trans Union) of that specific report. It can take some time to dispute incorrect information, so the sooner you do it, the better.

Writing a dispute letter

You can find sample dispute letters online that will give you a good starting point for writing this letter. Be professional, use facts and not emotions, and include all of the necessary proof that the information is incorrect so the credit agency can make the change.

Be sure to include copies of any documents that support your position. Do not include the originals.

The process of disputing an item

Typically, the credit agency will contact the company that reported the false information, and an investigation will follow to determine whether or not the information is inaccurate.

Add accounts to your file

If you are missing credit accounts on your credit file, then you may want to ensure that missing information is added. You can make this happen by contacting the companies that aren’t reporting your credit history and asking them to begin reporting for you.

* Note: Not every company will want to report this information for you, so it can take some time for you to have this information added to your account. However, if you’re diligent, you should be able to have the information added

Check out our Average Joe Finances merchandise here

Follow up

Be sure to follow up on your requests if you don’t hear anything from the credit reporting agency within 30 days, as this is the normal length of time for an investigation.

The power is in your hands to keep your credit report in good standing. If there is inaccurate information in your credit report, or if important information is missing, then take the steps to get the information corrected. Your next job, home, or loan may depend on it. Are you checking your credit score and credit reports?

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

The Market is Crazy! Get In, or Get Out?

Posted Leave a commentPosted in Finances, Investing, Stock Market

The title of this post is what I keep seeing and hearing daily. I joked around with some people at work talking about how I was going to pull everything out of the stock market after the President was diagnosed with Covid-19. The funny thing is, while I was joking, other people said that they fully intend to do just that. This reminded me about how important it is to “stay the course” as we say in the Navy.

It has been clear cut to me that time in the market is more important than timing the market. As we continue down this volatile road of uncertainty, it is important that people do not look at market dips as losing money. YOU ARE NOT LOSING MONEY! Your assets are simply losing value.

Now, let’s take a look at the stock market historically…

https://www.seeitmarket.com/comparing-todays-stock-market-with-the-1970s

Some Bumps Along the Way, but Steady Gains

The portion highlighted in yellow are the dips that happened back in the 1970’s. If you look further back, you can see when the great depression happened in the 1930’s. The main thing I want to point out with this graph is simple… Look at the trend even after all of the dips. What does the Dow Jones continue to do? Over the years, it continues going up…

These dips should be looked at as buying opportunities to purchase stocks at a “discounted” price. Your focus should be on the cost average of each stock you purchase versus the most recent price you paid.

Check out our Average Joe Finances merchandise here

What are your goals?

How you invest should depend on your lifestyle and your goals. Day traders and swing like to buy into individual stocks and us several indicators to know when to buy and when to sell. Buy and hold investors like index funds, exchange-traded funds (ETFs), and diversifying individual stocks. I happen to be a fan of index funds and ETFs vice individual stocks. With an index fund, you are getting a piece of every company in that fund. If one particular company tanks, you are still safe. Index funds/ETFs like the Dow Jones above are consistent in constantly gaining value over time. I do buy individual stocks just to play around with, but it’s nothing serious. Most of the individual stocks I buy are not even “stocks” because they are mostly Real Estate Investment Trusts (REIT). I like REITs because they are normally steady in value and have exceptional dividend returns. I don’t even collect the dividends from those as I set all of them in to a dividend reinvestment plan (DRIP) back into the fund to reinvest into the REIT and buy more.

While you don’t have to invest the same way I do, you should most definitely have a strategy with the assets you are investing in. If you are new to investing, I would highly recommend that you speak with a professional or thoroughly research the asset class you are thinking about investing in. I am not a financial advisor and am only posting my thoughts and sharing what I am doing. However, I would be happy to assist you on your financial freedom journey. My email is always open if you want to reach out. Hope you all were able to get something out of this article. Also, be sure to check out our podcast.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

Payroll Tax Deferral – What does it mean for you?

Posted Leave a commentPosted in Finances, General
Treasury Secretary Steve Mnuchin during a press briefing at the White House in Washington.
Kevin Lamarque | Reuters

Keeping this one short, sweet, and to the point.

Yesterday the U.S. Treasury Department released their guidance on how the President’s tax deferral would apply to companies.

Considerations

There is a key word everyone needs to focus on with this and that word is deferral. While your paycheck might look much nicer, it is important to know that a deferral means you will pay it back at a later time.

This isn’t all doom and gloom. There are things you can do to mitigate the impact of paying the taxes back.

What should you do if your company elects the deferral?

The important thing to do at this time is NOT SPEND THAT EXTRA MONEY! Look at your last paycheck and note how much FICA tax came out. When you get paid, take that amount and put it into a high-yield savings account, do not spend it!

The Fed is hoping this will cause an increase in spending to boost the economy. While this may happen, really consider saving your money and not spending it… yet.

What happens if the Fed forgives the deferral?

This would be the ideal situation for the taxpayer. If the Fed forgives the deferral, you get to keep it. Now your deferral is basically another stimulus check.

Now you can take that money and do whatever you want with it. Since you already did not expect to receive that money, consider investing it. This could be the opportunity for some people that have never invested before, to try their hand at it.

This will only help if you are employed.

This tax deferral will only help people that are currently employed. If you are currently unemployed, you will not see a benefit. This is an emergency action because our politicians cannot come to an agreement on the next stimulus. I am still hopeful that there will be something in the future to help those that are unemployed.

Related: Side Hustles

If you are unemployed and still struggling to find employment, try taking on a side hustle. I know many side hustles cost money to start, but there are many that do not. If you have a car, consider driving for Uber/Uber Eats or Lyft. There are other options as well such as Instacart, Door Dash, and Grub Hub.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

Apple Shares

7,000 Shares of Apple… WWYD

Posted 2 CommentsPosted in Finances, Investing, Stock Market
Apple Shares

If you inherited 7,000 shares of Apple, what would you do?

This is a question A user on Reddit asked the community when he recently inherited 7,000 shares of Apple from his grandfather. Check out the MarketWatch article. Before diving into this post, I would like to express my sincere condolences for the original poster. I would also warn any of my readers before looking up the original Reddit post as there is some strong language in the original post and subsequent comments.

Apple is currently sitting at $498.90 a share. Inheriting 7,000 shares gives him a value of $3,492,300. That’s definitely something to work with. This Reddit user get’s many suggestions and comments on what he should do with his newly found riches. Let me share what I would do if I came into this type of inheritance.

What do I do with these shares?

First, I would cash out most of it except for about $250k (roughly 501 shares). I would keep this large sum as Apple is still a great company and a dominant force in the Tech industry. Since this is inheritance, I should only be taxed on what I’ve gained since inheriting the shares. This means I will pay very minimal taxes if the value goes up before selling it.

After the sale, I would have around $3.25 million. The name of the game is diversity. Spread the wealth. I would put at least $250k-$500k into a few high yield savings accounts as a safety net.

Investing at least $1.5 million in real estate (rental properties) would be my next move. This money would be used for several down payments on single family, multi-family and commercial properties. I would take out mortgages and leverage my debt service to the income I would make from the rental units.

I would invest the last $1-1.5 million in the stock market. Investing mostly in blue chip dividend paying stocks, index funds, and maybe a few REITs. I will already have a bunch of real estate, so maybe no REITs and just other dividend paying stocks.

Related: 6 Ways to Invest in Real Estate

Here is the income I would have just by letting my money work for me.

Having $500k in the savings account you are making roughly $10,000 a year from a 2% rate.

If you do well with your real estate investments and manage your debt service well, you can get around a 25% return. This would be between $250k – $375k a year.

And with that last $1.5 million, let’s say you are averaging a 5% dividend yield, that will give you another $75k a year.

Conclusion

With investing your money properly, you can make close to $460k a year to let that money work for you. I would donate at least 10% of my earnings per year so roughly $46k. As I’ve said on my podcast, I believe it’s important to give back. This is what I would do personally as you don’t want to have all of your eggs in one basket.

Sound off in the comments and let me know what you would do if you inherited 7,000 shares of Apple.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

Website Flipping

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Website Flipping

Website Flipping

Website flipping… Is that actually something you can make money off of? I am here to tell you that yes, it most definitely is. Going through this process reminded me so much of flipping real estate. This is essentially the same thing. You are flipping digital real estate. Pretty neat!

Related: 6 Ways to Invest in Real Estate

I purchased a few domains a while back and opened a some Shopify stores to try my hand at eCommerce a bit. My day job made it difficult to keep up with my drop shipping store as I had to manually fulfill orders each time someone purchased a product. After feeling a bit overwhelmed, I let it sit for some time. I started doing some research on the international database of Google on how to sell a pre-built website. Well what would you know, it’s a thing! There are website brokers and escrow companies out there, just like we have in the real estate world.

Where Do You Sell?

In my excitement after finding Flippa, I decided to look at different niche products and build a starter store to sell. I won’t go into too much specifics to protect my buyer. I even outsourced some of the building of the store on Fiverr. After getting the niche product set up as well as 24 others, I built the site and launched it to play around and see how it was. Made a few sales without much effort and knew this would be a good store for someone.

So, I wanted to get at least $500 for it… I listed it for $1,000. I received an offer for $500, but decided to negotiate a bit and countered with $750. After some negotiation, I sold it for $715 (675 on Flippa and $40 more on the Marketplace Exchange). Either way, I was happy about these results.

Closing Statement

Can Be A Source of Steady Monthly Income

While pushing this transaction through, I found out about Shopify’s Partners program. You can legitimately build starter eCommerce stores and transfer ownership when complete. You can sell it to a buyer or even make one for a friend. Here is the awesome thing about building the store through Shopify partners. When the new owner takes over and starts paying for the Shopify plan, you receive a 20% commission of the monthly plan costs from Shopify. How cool is that?

This doesn’t just have to be Shopify. Maybe try building a blog on WordPress and helping someone start their new hobby or side hustle. You can even do this with social media accounts too. I was talking with someone at work who told me they knew a young entrepreneur in her 20s that was making an average of $18,000 a month flipping Instagram accounts. WHAT?! Yes… flipping social media accounts is also a thing. Wow! Keep thinking outside of the box and maybe you will find that little something that can turn into a big something.

Learn Something New

If you are stuck at home teleworking, or lost your job, consider learning just a small amount of CSS and HTML. You don’t need to know much, just enough to start making some of these Shopify stores through their partners program. If you build enough, you can have a nice monthly paycheck coming in for those efforts. Keep on being creative and coming up with ways to add value to yourself by learning new skills. Keep on learning and earning.

Bottom line, there is some decent money to made from a side hustle like this. Is it something I will pursue? Maybe, maybe not. I have many other projects I am working on, however, I can see this as a viable option as another source of income. I proved it can work and had a nice payday to show for it.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike owns real estate in Hawaii and Virginia and is building a community for people to come together to learn and build their wealth.

Are You Financially Ready for Your First Investment Property?

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Guest article by Doug, founder of honorandequity.com

There are countless stories of individuals buying multiple homes they could not afford in the buildup to the 2008 housing market collapse. Many of these individuals had to file for bankruptcy as a result of their financial decisions. Every day, people buy homes they shouldn’t buy, and this is true for investment properties as well. Just because the bank will give you a loan for a property, doesn’t mean you are financially ready to buy that property. The banks are looking out for their bottom line – not yours.

So what are some things you should think about before you get that first investment property? Let’s dig in.

Get Your Personal Finances in Order

Ideally, you should have no consumer debt with the exception of a mortgage on a primary residence. Consumer debt usually comes with higher-interest rates and includes ‘bad debt’ like car payments, credit card debt, and pay-day loans. Before you buy investment properties, you should aggressively pay down these loans and free yourself from them. Dave Ramsey has a great strategy for helping people become debt-free. Paying these loans off ties into the next step: raise your credit score! Lenders need to see that you are a ‘good borrower’ which means you have steady income and you pay all your bills on time. You should target at least a 700 credit score.

You will also need cash reserves to cover surprise capital expenditures, vacancy costs, and repairs. I set aside $5,000 in a high-yield savings account per property. There are different ideas and techniques for addressing cash reserves, and I’ll admit mine is more conservative than most but it makes me sleep better at night. For example, if Stephen owns three properties, he would need to have $15,000 set aside for cash reserves, and get that number to $20,000 before he buys a fourth. Important disclaimer: These real estate cash reserves are different from your personal ‘emergency fund’ for unexpected personal expenses.  

Ok let’s sum up these up:

  1. No consumer debt.
  2. Raise your credit score to at least 700.
  3. Have sufficient real estate cash reserves.

Make Sure Your Spouse/Partner is 100% on Board

People love surprises – but surprising your husband or wife with an investment property is a terrible idea. It’s a big financial decision, so you should make sure you and your spouse are in agreement. Many times, an individual will have a much higher risk tolerance than their spouse – and this is totally normal. You should sit down and have a serious conversation to determine your shared risk-tolerance, long-term goals, and strategies you are comfortable using to achieve those goals. Maybe your spouse isn’t ok with you doing a long-distance fix-and-flip with someone you met on the Bigger Pockets forum, but they would be ok with investing in an apartment syndication with someone you both know and trust. The bottom line is: you have to communicate with your spouse/partner and ensure you’re both on the same page before you commit to investing in anything – especially real estate.

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Educate Yourself about Real Estate

This one may seem obvious, and if you’re reading this article you’re already doing it! You must educate yourself about the type of real estate in which you want to invest. There are so many fantastic and free resources out there. I’ve learned most of my real estate knowledge through podcasts and there are hundreds of different shows to choose from. The Bigger Pockets podcast is a great place to start, and I will probably do another article soon about my favorite real estate and personal finance podcasts so make sure you check back often and follow @honorandequity on Instagram for the latest updates.

My second favorite way to learn about real estate is through books. The real estate book I recommend the most is Chad Carson’s “Retire Early with Real Estate” which is designed for a beginner real estate investor. Chad – who has an excellent podcast as well – does a great job of explaining the basics of real estate investing.

Real estate is a powerful way to build long-term passive income, but it’s a big commitment. You and your family must be financially and mentally prepared before you begin the process. Otherwise, you may find yourself in a terrible financial position.

As Warren Buffett wisely said: “It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes”.

Do you know someone that would enjoy this article? Please share with a friend!

Doug Spence
Doug Spence

Doug is an active duty naval officer stationed in San Diego and the founder of Honor and Equity. His goal is to help military members, veterans, and their families learn more about personal finance, investing, and real estate so they can build wealth, be more confident with money, and add more freedom and contentment to their lives.