5 Secrets About Money American Banks Don’t Want You To Know

5 Secrets About Money American Banks Don’t Want You To Know — Plus How To Beat Them At Their Own Game

Maurie Backman  Tue, October 1, 2024  Moneywise

As consumers, we rely on banks to keep our money safe and secure. They’re an essential part of our economy — but they’re also a profit-seeking business.

As much as banks are a mainstay of people’s personal finances, some of their practices aren’t exactly as transparent as they should be — and many Americans have caught on.

In fact, a 2023 study from the Associated Press-NORC Center for Public Affairs Research revealed that only 10% of U.S. adults have a “great deal of confidence” in banks and financial institutions, while 56% say the government is not doing enough to regulate the industry.

There are certain tricks banks employ to make money and protect their own interests — and these tactics aren’t necessarily general knowledge.

Here are a few of the biggest banking secrets you should know about.

1. Sneaky fees

From maintenance fees to overdraft charges, one of the main ways banks make their money is through various fees. Even ones that seem negligible at first glance can add up over time.

For example, personal finance celebrity Dave Ramsey once called maintenance fees “some of the sneakiest,” adding that, “you agree to them when you open an account, and you may not even realize it until they show up on your statement six months later.”

But it may be possible to avoid paying maintenance fees. For instance, some banks may waive the fee if you maintain a certain minimum account balance.

However, fees on big loans, such as a mortgage, are often hiding in the fine print of your contract. Although it may feel tedious, always read the fine print before you open any account.

If you come across any fees, in general, you should feel empowered to contest it. After all, a bank is like any other business — they don’t want to lose you as a customer, especially if there’s a risk that they’ll lose you to a competitor.

2. Credit cards offer more protection than debit cards

Using a debit card over a credit card can be beneficial, especially since many businesses impose a surcharge on customers for credit card purchases. However, credit cards tend to offer more protection than debit cards.

Often, when there's a fraudulent transaction on your credit card account, you can dispute it. Typically, the charge will be removed from your balance while it's being investigated, or you'll receive a credit for that charge so you don't have to pay for it.

But when your debit card is used fraudulently, you have less protections in place. You generally only have a small window of time to report a fraudulent transaction on a debit card — and that window may depend on the rules and regulations your bank has in place.

If your debit card or PIN number is stolen, you may find yourself responsible for up to $500 in unauthorized transactions if you notify your bank after two business days, according to the FDIC.

With a credit card, on the other hand, you could report fraud several weeks later — on average, around 60 days after the fact. In some situations, it can be even longer.

For this reason, it could pay to use a credit card more often than your debit. As an added bonus, credit cards let you rack up points or cash back on your purchases, which debit cards don't.

TO READ MORE:  https://www.yahoo.com/finance/news/5-secrets-money-american-banks-121300122.html

Suze Orman: 1 Reason You Should ‘Absolutely’ Own Bitcoin

Suze Orman: 1 Reason You Should ‘Absolutely’ Own Bitcoin

GoBankingRates  Kellan Jansen  September 23, 2024

Suze Orman is a financial host and author, and in a recent interview with CNBC, she said she believes “everyone should absolutely” own the cryptocurrency bitcoin. Usually, people who support bitcoin as an investment view it as a store of value — but Orman doesn’t.

Here’s the real reason you should own the No. 1 crypto asset by market cap, according to Orman.

Young People Are Fascinated by Bitcoin

Orman’s main idea is that young people are excited by bitcoin, and they’re likely to continue buying it for years. This, she argued, should be positive for the coin’s price over time.

Orman doesn’t buy into the idea that bitcoin will become a store of value like gold or supplant the dollar. But she does view it as a speculative asset that may still have room to run in the future.

However, Orman doesn’t recommend putting all of your money into the crypto market. She said you should invest only what you can afford to lose. That aligns with the general recommendation of allocating no more than 5% of your portfolio to crypto.

Orman is correct in pointing toward younger generations’ interest in cryptocurrency. Millennial and Gen Z investors are now as likely to own crypto as they are to own real estate. One reason for that could be dissatisfaction with the current financial system.

But Orman doesn’t evaluate further than this. She argued that the buy-in from young people is all that really matters. In other words, as long as people continue believing in bitcoin, its price should keep increasing.

Is Orman Right About Bitcoin?

TO READ MORE: https://www.aol.com/suze-orman-1-reason-absolutely-140020392.html

Can I Deposit This Money Legally?

Can I Deposit This Money Legally?

Christy Bieber  Sat, September 28, 2024 Moneywise

I lost faith in banks in 2009 — now I have $650K in cash sitting in a safe. Can I deposit this money legally?

Anyone who lived through the Great Recession remembers the tremendous economic turmoil that took place.  Banks had made mortgage loans to unqualified borrowers, bundling those loans into mortgage-backed securities that were sold to investors. The entire house of cards collapsed as home prices began to fall and interest rates began to rise. Several major banks failed, the government was forced to bail out more and the stock market plummeted.

While the economy eventually recovered, many people became wary of financial institutions — with some people worried enough to withdraw their funds from banks and brokerage firms entirely.

If you're one of those people and have been hoarding cash since the Great Recession, you've sadly missed out on the chance to benefit from years of economic growth. While the average closing price for the Dow Jones Industrial Average was around $8,886 in 2009, the average in 2023 was $34,122, and has continued to rise in 2024.

For those who want to get in on the gains, it may be time to make a change. However, you'll need to understand the rules for doing so.

How To Deposit A Large Sum Of Money

If you've amassed a large sum of money at home instead of putting cash in the bank, you may be wondering if it's even possible to deposit it once you've had a change of heart.

The answer is yes, but there are some caveats.

Specifically, when you deposit over $10,000, your bank is required by the Bank Secrecy Act to report it to the Financial Crimes Enforcement Network. Your bank may ask some personal questions, including why you're depositing such a large sum, so you must be prepared to answer them.

To be clear, if you've done nothing wrong, earned the money legitimately and paid taxes on it, this reporting requirement shouldn't worry you. You just need to know about it so you aren't caught off-guard by the bank's queries.

What you don't want to do, though, is break up your big deposit into a series of smaller ones to evade reporting rules. This is called “structuring” and it's illegal even if you earned the money legitimately.

It’s also a good idea to call the bank in advance of making a large deposit. Showing up with $650,000 in cash could cause problems if the financial institution isn't prepared to handle that much all at once. Your bank can work with you to find a safe way to deposit the money.

You should also be aware that the Federal Deposit Insurance Corporation only insures up to $250,000 per person, per account, so simply depositing $650,000 into a bank account may not be the best move. You may want to put some money into different savings accounts or buy Certificates of Deposit or other investments with it so you don't risk losing funds above $250,000 if another bank collapse happens sometime in the future.

TO READ MORE:  https://www.yahoo.com/finance/news/lost-faith-banks-2009-now-115000682.html

Was Benjamin Franklin The Original Financial Guru?

Was Benjamin Franklin The Original Financial Guru?

Here are 4 bits of money advice from the Founding Father

Lou Carlozo   Sun, September 22, 2024  Moneywise

Staring out from the $100 bill, looking more like a wise old uncle than Founding Father, Benjamin Franklin seems an easy guy to like. And if anyone belongs on U.S. currency it's this colonial polymath who dished financial wisdom as fit for today as when he signed the Declaration of Independence at age 70.

Let’s start, though, by getting this myth out of the way: Franklin never exactly said, “A penny saved is a penny earned.” The line he wrote in his 1737 edition of “Poor Richard's Almanack” was this: “A penny saved is two pence clear.”

Regardless, a penny saved in 1737 would be worth 79 cents today, per the Official Data Foundation. And by offering sound advice like the above, it’s no stretch to call Franklin one of America’s original financial gurus.

Among the many things he said about personal finance, these four are drawn from “The Way to Wealth,” a collection of adages and advice published in 1758 that were imparted in previous “Almanack” writings.

No pain, no gain

“There are no gains without pains,” he wrote.

And you thought some buff weightlifter made this up. Franklin was vocal about the dangers of sloth (including excess sleep) and urged people to pursue wealth through industriousness. He cites a gripe as common then as now among people who struggle with money: high taxes. But wishing for outside factors to change, he argued, is never as effective as taking charge through diligence.

“He that lives upon hope will die fasting,” Franklin wrote, while the industrious “shall never starve … at the working man's house hunger looks in, but dares not enter.”

Consider Franklin’s counsel as an invitation to find and maintain income streams beyond your day job. Maybe start a side hustle out of your home and grow it from there.

Be frugal

“We must add frugality, if we would make our industry more certainly successful,” Franklin wrote. "You may think , perhaps, that a little tea or a little punch now and then, diet a little more costly, clothes a little finer, and a little entertainment now and then, can be no great matter, but remember, many a little makes a mickle. Beware of little expenses. A small leak will sink a great ship."

The most recent figures from the U.S. Bureau of Labor Statistics show that, in 2022, Americans spent 10.9% more on apparel and services, including 18.8% more on footwear, than the previous year.

While that’s not the same as splurging on a sea cruise, ask yourself whether slowly filling your closet points to a spending problem — that proverbial capsizing ship. Or, as Franklin lamented, “When you have bought one fine thing, you must buy 10 more.”

TO READ MORE:  https://www.yahoo.com/finance/news/benjamin-franklin-original-financial-guru-112800465.html

Suze Orman’s Top 25 Tips That Will Save You From Financial Disaster

Suze Orman’s Top 25 Tips That Will Save You From Financial Disaster

Gabrielle Olya   Thu, September 26, 2024  GOBankingRates

Suze Orman was working as a waitress and making $400 a month at 29 years old. She then decided to take a chance on a major career change and landed a job as a broker for Merrill Lynch.

Having been on both ends of the financial spectrum, Orman knows what it takes to make the leap from broke to wealthy, and is now one of the most respected voices in personal finance — as well as a New York Times bestselling author with more than 25 million books in circulation.

According to Celebrity Net Worth, she is worth some $75 million, indicating that she’s followed her own financial advice for saving, investing and preparing for retirement.

As any self-made millionaire will tell you, going from rags to riches takes hard work. It also calls for tons of tried-and-true personal finance strategies to maintain and build financial success. Here are 25 tips from Orman to steer clear of financial disaster.

Live Within Your Needs but Below Your Means

Living within your needs but below your means is the golden rule of the Suze Orman budget. Although food and shelter are needs, you might be spending too much on these essentials.

“How much you choose to spend on your basic needs is a squishy number dependent on the choices you make,” Orman wrote in a blog post. “For example, a mortgage lender may tell you that you will qualify for a $250,000 mortgage. But if you can find a great home that meets your family’s needs, and it costs $195,000 you will save a lot of money that can be used for other important goals. The $195,000 home fits your needs.”

Don’t Lease a Car — Buy Instead

“Leasing is a horrible financial move,” Orman wrote in a blog post. “It is the auto industry’s way to get you to buy a car you can’t really afford. (…) The big problem is that when you lease there’s the temptation to keep leasing forever.

“So every three years — the standard lease length — you turn in your car and lease another. That means you are signing on for never-ending monthly car payments.”

Orman explained that buying is better because once you pay off your loan, you have that extra monthly payment to build your emergency fund, contribute to a retirement account, save for a home down payment or meet another financial goal.

Stop Paying Extra for Minor Conveniences

The difference in the cost of paying for food delivery instead of cooking or hopping in an Uber instead of taking the bus might seem small, but the expense of always taking the convenient option will add up over time.

“It adds up big time,” Orman told CNBC. “Stop leasing cars, stop eating out, stop doing the (thing) that’s wasting your money and makes your life easier, because in the long run it’s going to make it harder.”

Cut Out Your Coffee Habit

“I wouldn’t buy a cup of coffee anywhere, ever — and I can afford it — because I would not insult myself by wasting money that way,” Orman told CNBC.

She believes that $3 spent daily on coffee is better off going into a retirement fund or used to meet other savings goals.

For example, if you spend $100 a month on coffee and put that money into an IRA instead, that would grow to about $1 million after 40 years given a 12% rate of return.

“You need to think about it as: You are peeing $1 million down the drain as you are drinking that coffee,” Orman said. “Do you really want to do that? No.”

Pay With Debit Instead of Credit Whenever Possible

“There is no more expensive form of bondage than spending more than you have and paying interest of 15% or more on your credit card,” Orman wrote in a blog post.

She recommends paying for everything with a prepaid debit card or a debit card that is tied to a checking account that does not have overdraft coverage.

TO READ MORE:  https://www.yahoo.com/finance/news/suze-orman-top-26-tips-200055723.html

7 Levels Of Wealth: What Stage Are You At In 2024 According To Grant Sabatier?

7 Levels Of Wealth: What Stage Are You At In 2024 According To Grant Sabatier?

AJ Fabino   Thu, September 26, 2024  Benzinga

In a world where financial anxieties loom, many Americans wonder just how financially secure they are.

For those wondering, Grant Sabatier, a voice in the FIRE (Financial Independence, Retire Early) movement, offers a perspective with his seven-level framework of wealth. The road map, written in his book "Financial Freedom," is a gauge that might resonate with those seeking to understand their financial journey.

Sabatier’s first level, “Clarity,” is about taking stock. For some, it might mean confronting the reality of living paycheck to paycheck, which plagues 78% of working Americans, according to a 2023 Payroll.org survey cited by Forbes.

Sabatier’s system breaks down as follows, according to Acorns:

2. Self-sufficiency: Covering basic expenses without external support. While it may still mean living paycheck to paycheck, it’s an important step.

3. Breathing Room: The end of the paycheck-to-paycheck cycle. This level allows for discretionary spending and marks the beginning of financial comfort. "Just because you make a lot of money doesn't mean you're saving that money," Sabatier said. "Most people in [the U.S.] live through debt."

4. Stability: A solid financial foundation. “At this level, you’re not worried if you lose your job or have to move to a different city,” Sabatier explained. Stability typically involves saving six months of living expenses.

5. Flexibility: The ability to take calculated risks. With at least two years of living expenses saved, individuals can consider major life changes without financial fear. "You could take a year off from your job if you wanted to," he said.

TO READ MORE:  https://www.yahoo.com/finance/news/7-levels-wealth-stage-2024-171546067.html

So What About Silver?

So What About Silver? 

Notes From the Field by James Hickman / Simon Black

September 25, 2024  In the 6th century BC, during the reign of Nebuchadnezzar II, Babylon flourished as a center of power, culture, and commerce.

We know this because the Babylonians were exceptional record keepers. And they chiseled everything down onto cuneiform tablets, many of which have survived through today.

Sadly the tablets aren't tabloids. They don't contain any juicy gossip or colorful stories of ancient times.

But they do offer extremely detailed-- though often boring and mundane-- records of everyday economic transactions, legal contracts, and administrative activities.

Just like future historians centuries from now should easily be able to see this evening's closing stock prices for Apple and Tesla, we can also read about daily grain prices in ancient Babylon.

One important tablet from the reign of Nebuchadnezzar II highlights the interchangeability of gold and silver in Babylonian commerce. It records a transaction where 5 shekels of silver were considered equivalent to half a shekel of gold.

(The shekel was an ancient unit of weight approximately equal to 8.33 grams.)

This exchange rate implies a silver-to-gold ratio of 10:1.

The formal establishment of fixed exchange rates between gold and silver took a significant leap under Darius the Great in the mid-6th century BC.

Ruling over the vast Achaemenid Empire, Darius borrowed the concept of minting coins from the Lydians and introduced a bimetallic standard. He decreed that one gold "daric" coin was equivalent to 20 silver coins, creating one of the first examples of an official, fixed silver-to-gold ratio.

Over time, the ratio fluctuated due to advancements in mining techniques and changes in supply and demand. And by the era of Alexander the Great in the 4th century BC, the ratio had shifted to 13:1.

Similarly, in ancient Rome, Julius Caesar established a 12:1 ratio.

Even in the early history of the United States, The Coinage Act of 1792 legally defined the US dollar in terms of specific weights of gold and silver—1.604 grams of pure gold or 24.1 grams of pure silver—establishing a ratio of approximately 15:1.

Of course, today, the silver-to-gold ratio is whatever the market decides. Ever since the dollar was removed from the gold standard more than five decades ago, the market ratio between silver and gold has ranged from about 25:1 all the way up to 120:1. Right now it is about 85:1.

Many people have an idea about where this ratio should be. Some people think that it will inevitably fall back to 50:1 which would price silver at around $53 per ounce.

Silver could certainly rise to $53 and far beyond. But not because of some preordained ratio.

Remember, there is no fixed rule or law regulating the silver/gold ratio. There's nothing stopping it from rising to 500:1.

And frankly I think it's likely the ratio could rise much higher from its current 85:1.

Just think about the catalysts that could drive both gold and silver prices much higher.

Gold prices over the past few years have been pushed to all-time highs by central banks. And as I've argued, this is a pretty clear sign that they anticipate moving on from the US dollar as the global reserve currency.

As the US national debt continues to explode higher and the federal government appears increasingly dysfunctional, it's becoming likely that the US dollar's global dominance could come to an end within the next several years.

What does the post-dollar global financial system look like? What will the next reserve currency be? No one knows.

And that's why central banks are buying gold. Because they have $8 TRILLION worth of US dollar reserves that they need to convert into something of value.

Gold, for now, represents that value. So central banks are buying it by the metric ton.

But (with minor exception) central banks do not buy silver. The market is too small, making it extremely difficult to invest billions of dollars all at once.

Silver prices are influenced more by industrial demand... and investor speculation. I'll come back to that.

I've said before that a Kamala victory will likely spell the end for the dollar's reign. This is a person who thinks that inflation is caused by "greed" and whose answer to every problem is more government spending.

The Harris deficits and inflation will likely be the proverbial straw that breaks the dollar's back. And the consequent surge in central bank gold purchases could easily send the silver/gold ratio soaring past 200 or more.

Again, while 200 is far beyond the historical average, there's no reason why it can't be even higher. Historical averages are merely data points, not firm rules.

It's far more important to pay attention to price catalysts. And gold has a major catalyst in central bank purchases.

That doesn’t mean the price of silver won’t rise. In fact, a climbing gold price alone is very like to increase the price of silver, simply because investors will speculate that it will rise.

This becomes somewhat of a self-fulfilling prophecy; investors buy an asset believing that it will rise. That increased demand causes the price to rise, encouraging more investors to buy.

We've seen this type of feverish speculation with plenty of asset classes in the past-- including silver more than a decade ago.

But in the end, if there aren't real demand fundamentals to support the price, the speculative mania always fades.

Bottom line, gold has clear demand from central banks that could send the price to absurd levels. Silver does not share the same catalyst.

Silver prices could absolutely skyrocket. But this would be far more likely due to temporary speculation (and those buyers tend to be finicky and sell quickly) rather than from true long-term industrial or investor demand.

To your freedom,  James Hickman  Co-Founder, Schiff Sovereign LLC

PS-  If you value this type of financial and political analysis, this is just a taste of what you’ll get with Schiff Sovereign: Premium. At just $9/month, it’s packed with incredible insights, including both Plan B strategies and compelling investment research. It’s a highly educational, month-by-month guide that is designed to help you navigate the world from a position of strength, both personally and financially.

https://www.schiffsovereign.com/trends/so-what-about-silver-151499/

How Much Inheritance Will Ruin Your Kid?

How Much Inheritance Will Ruin Your Kid?

How generational wealth impacts productivity and happiness

Sean Kernan

When my family lived near the Cavalier Country Club in Virginia Beach, we were the token middle-class family in the neighborhood. Many of the houses had hedged bushes, carefully carved into eccentric geometric shapes, and sports cars sitting unashamed in their driveway, announcing their owner’s achievements to all.

And despite this clear class divide, I got along great with the boys around me. Some were only 10, but had fathers that were entirely grey haired, and mothers who looked barely out of high school. I noticed the peculiarity of it but never connected the dots on what these unions meant.

Some of these boys were well-adjusted and great. Others were quite spoiled, and I often wonder what came of them. They were agitated and disobedient in school, often getting into fights on the playground.

Had wealth bestowed a sense of privilege upon them? Did they already feel exempt from the rules and any acts of discipline?

Per the Global Health Report for 2023, the United States has 22.7 million millionaires (38.2% of the global total, with China in second at 10.2%). Many of these people are well past one million and cruising into eight and nine figures of net worth. And it leaves us with an interesting predicament: Many scions of vast fortunes are quite young.

And while this might not be a problem many of you sympathize with, it should nevertheless invoke thought about how your worldly assets should be addressed with your children, or the lack thereof.

How should we think about our inheritance?

Lynn Chen-Zhang’s 8-year-old son came home from school one day and said a student asked him, “Why do you study so hard?”

Classmates were saying his parents were rich, so there was no need to work so hard. Her son was on to something. Their father, Charles Chen-Zhang, owns one of the largest financial advisory firms in the country and was already a known philanthropist.

Realizing these questions were continuing, as classmates knew of their family (mainly through gossiping parents), the Chen-Zhangs decided to sit their children down and have the money talk.

They told their two boys, “We’ll support you both in getting as much education as you’d like, but from then on, you are on your own.” Which translated to zero inheritance.

Whether this was a scare tactic or a true threat, they worked. Both sons are now thriving in their finance careers, independent of their father’s company.

This trend is common. I spoke with a peer, Matthew, who is 49 and runs a successful medium-sized business which he just sold for a substantial sum. He told me, “My children don’t even know how much money I just made. Nor do I intend to let them know.” Of note, he lives a humble life and does not flash his wealth by any means.

But most parents don’t face this severe of a dilemma. The average inheritance in the US is “only” $46,200 per census data, with 85% of inheritances being below $250,000. Which isn’t nothing.

The game changes with the ultra-wealthy

TO READ MORE:  https://www.yahoo.com/lifestyle/story/how-much-inheritance-will-ruin-your-kid-003747274.html

The Downsides Of Buying A House In Cash

The Downsides Of Buying A House In Cash

Christy Bieber  Sun, September 22, 2024  Moneywise

My financial advisor says I shouldn't pay 100% cash for a house — is it better to take out a mortgage and invest in the S&P 500 instead?

If you have a lot of cash and are considering buying a property, you may be tempted to pay for the home outright. After all, not having a mortgage sounds nice.

But the reality is that it’s not always a good idea to buy your house in cash for many reasons. Before writing a big check for your real estate investment, you’ll want to consider the opportunity costs of tying up your money this way.

************************

The downsides of buying a house in cash

The biggest downside of buying a house in cash is that you can’t invest the money you sink into the home.

Your return on investment (ROI) for paying cash is the interest you save on your mortgage loan. Even with rates still hovering near record highs, your ROI would still be around 6.93% (the 52-week average interest rate for a 30-year mortgage loan as of September 12, 2024.) Meanwhile, the S&P 500 has produced a 10% average annual return since its inception almost 70 years ago, offering a potentially higher ROI if you invest in the stock market.

There are also some other factors to think about.

If you itemize your deductions, you can get a tax break for your mortgage interest, so the government subsidizes your home purchase. Plus, your housing payment effectively gets cheaper every year due to inflation, which reduces the value of the money you're making housing payments with.

TO READ MORE:   https://www.yahoo.com/finance/news/financial-advisor-says-shouldnt-pay-113300313.html

Do These 3 Things If You Receive an Inheritance

Suze Orman Says You Must Do These 3 Things If You Receive an Inheritance

Cindy Lamothe   Sat, September 21, 2024   GOBankingRates

Receiving a financial windfall like an inheritance can be an emotional time — one that might stop you from seeing the bigger picture. As financial advisor Suze Orman said in a recent episode of her podcast, “I think it’s really important that we think about how we invest money today to make the most out of the situation that we have?”

In her episode, Orman outlines the next steps to take if you’re receiving an inheritance for the first time and need help figuring out what to do with the money. Here are her recommendations below for the top three things to do.

1. Take an Inventory of Your Debt

As tempting as it may be to immediately make a big purchase like going on a trip or buying a big-ticket item you’ve been putting off — it’s crucial to take a deep look into your finances. Orman recommends writing down everything that you have, starting with debt. Write down things like credit card debt, student loans, car loans, as well as personal and mortgage debt. Once you’ve categorized all of these, write down the average interest rate you are paying. This will allow you to create a plan for paying these off. If it’s a large inheritance, Orman suggests seriously considering getting rid of all debt in one swing.

2. Build Up Your Emergency Savings

Once you’ve reviewed and analyzed your debt situation, Orman says having a solid emergency savings account for true emergencies is vital. These are especially important if your car breaks down or your fridge goes wonky and you must shell out $400. She says you want to rely on something other than a credit card for these kinds of scenarios. For that reason, she recommends having a minimum of $1,000 to $2,000 in that account.

TO READ MORE:  https://www.yahoo.com/finance/news/suze-orman-3-things-must-140019981.html

There Are 7 Levels Of Wealth

 There Are 7 Levels Of Wealth

Chris Clark  Thu, September 19, 2024  Moneywise

‘Financial Freedom’ Author Grant Sabatier Says There Are 7 Levels Of Wealth — What Stage Are You At In 2024?

A shaky economy, job uncertainty and rising everyday costs have Americans craving the financial independence that makes money worries a distant memory.

That might be why so many people are turning to author and personal finance expert Grant Sabatier’s seven-level breakdown to financial freedom.

Sabatier’s list is gaining attention because it ladders the distinct levels of wealth people reach on their path to prosperity. Understanding where you stand on the ladder can inform your next steps toward the final rung: complete money freedom.

So, where are you on the ladder, and how can you keep climbing?

Level 1: Clarity

The journey starts by understanding your financial situation — your income, debts, and savings.

Today’s high grocery prices and everyday costs make basic living expenses a challenge. But it can be empowering to get an understanding of where you are financially speaking and how much you need to make ends meet. That’s how you build a plan.

How to climb: Begin by following every dollar’s comings and goings. Budgeting apps like Mint or YNAB can help you get organized and clarify your debt-to-income ratio so you understand what you owe.

Level 2: Self-Sufficiency

At this level, you no longer rely on anyone for financial support and can cover basic expenses. Reaching this stage means you’re paying the rent or mortgage, utilities and other essentials without accumulating debt.

Living paycheck to paycheck, however, is still considered part of this step. A recent study by MagnifyMoney found that half of Americans are dealing with that reality.

How to climb: It’s important to build an emergency fund with three to six months’ worth of living expenses — a safety net to protect against lost income or unexpected expenses. It’s also important to minimize lifestyle inflation and keep expenses low as your income grows.

Level 3: Breathing Room

At this level, you’ve escaped the paycheck-to-paycheck cycle. Extra money allows discretionary spending. You’re no longer stressed about covering your monthly bills. Knowing your financial house is in order, you have enough to occasionally indulge in eating out, vacations and other non-essentials.

How to climb: Focus on erasing high-interest debt and increasing your savings rate. Prioritizing where your money goes ensures you’ll continue to build wealth while enjoying the results.

TO READ MORE:  https://finance.yahoo.com/news/financial-freedom-author-grant-sabatier-111300131.html

Preparing for a Recession? Avoid These 6 Money Mistakes

Preparing for a Recession? Avoid These 6 Money Mistakes

Nicole Spector  Sun, September 15,  GOBankingRates

There’s been a lot of chatter in recent months that a recession could be about to hit the U.S. economy. Experts are divided on whether or not that will happen, but keep in mind, nobody — not even top global economists — can predict a recession with 100% accuracy.

“Believing that one can predict when a recession is going to occur and how that recession will affect one’s finances is fool’s gold,” said Robert R. Johnson, Ph.D., CFA, CAIA, professor of finance at Heider College of Business, Creighton University. 

Not being able to predict a recession is even more reason you should always be prepared for one, as one can strike seemingly out of nowhere — just look at what happened during the onset of the COVID-19 pandemic. If you’re getting your finances ready to survive and thrive during a recession, avoid these six money mistakes.

Not Being Mentally Ready and Thinking Short-Term With Investments

One of the most significant challenges to having financial success in investing exists in your mind. We tend to take financial losses pretty personally and think more about what we’ve lost than what we can or could gain.

“The biggest hurdle to long term success in investing is mental,” Johnson said. “Research has shown that we suffer losses at a much higher rate than we savor gains. Baseball philosopher Yogi Berra once said, ‘Baseball is 90% mental. The other half is physical.'”

It’s worthwhile to also think of investing as being 90% mental.

“When stock markets decline, often during recessions, people have a knee jerk reaction to ‘sell out of stocks’ and take on a risk-off strategy,” Johnson said. “The problem with that philosophy is that one has to make a series of good decisions — when to get out in advance of the recession and when to get back in when the recession is over. And, they end up ‘selling low and buying high.'”

But when you “derisk” your portfolio, you’re also robbing yourself of opportunities that will inevitably open up when the stock market rebounds, as it always does.

“Prepare yourself mentally for the ups and downs of the stock market,” Johnson said.

Not Having an Emergency Fund

It’s always bad to not have an emergency fund, but it’s downright disastrous to not have one when bracing for an economic downturn that could disrupt your financial well being.

TO READ MORE: https://www.yahoo.com/finance/news/preparing-recession-avoid-6-money-130011855.html

Atlanta Woman Loses $120K To Fake Financial Adviser

Atlanta Woman Loses $120K To Fake Financial Adviser

Danielle Antosz  Tue, September 17, 2024   Moneywise

Here Are The Warning Signs Of Investment Fraud

An Atlanta woman, who chose to protect her identity with the pseudonym Yvonne, was defrauded of her life savings by a fake financial adviser.

Prior to the scam, she said she'd prided herself on her "common sense" and research skills. "My family would be the first to tell people, she’s the ‘go-to,’” she told WSB-TV Atlanta. But now, she’s out more than $120,000.

In an effort to invest for her family’s future, Yvonne decided to contact a finance professional she’d spotted on YouTube. The person appeared to receive glowing reviews on social media.

Before sending any money, Yvonne looked the person up on BrokerCheck, an online tool from the Financial Industry Regulatory Authority (FINRA) that shows investors the employment history, certifications, and any violations for brokers and financial advisers.

It appeared that the person was registered, licensed, and allegedly worked for a company Yvonne recognized — Fidelity.

“I thought I had done my research,” she told the news outlet. "[This money] was a lifetime of work to me. My future."

After calling FINRA to double-check if the investor was legitimate, Yvonne sent the finance professional $5,000 via Automated Clearing House (ACH).

Over the next few weeks, she received messages from the supposed adviser showing her that her crypto investment was growing. But when Yvonne went to cash out, everything went south.

A Case Of Stolen Identity

When Yvonne was ready to withdraw her money after seeing significant growth, the scammer insisted she pay taxes on her investment gains or risk legal action.

They then directed her to create an account on Crypto.com to submit the payment, to which Yvonne complied.

This was followed up with another message asking for additional funds for taxes, then another message insisting Yvonne pay thousands of dollars for an international business permit certificate, all in crypto.

By that point, Yvonne had sent multiple payments totaling more than $120,000 — her entire life savings. Then, the scammer disappeared.

Later, Yvonne learned that the Fidelity financial adviser was legitimate — but someone had stolen their identity and was using it to defraud unsuspecting clients.

TO READ MORE: https://www.yahoo.com/finance/news/atlanta-woman-loses-120k-fake-111700914.html