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The Benefits of Investing in a 401K Account

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If you’re contemplating investing in a 401K retirement account, simply continue reading discover some of the many benefits of choosing to invest in a 401K plan according to ShiftPixy.

The benefits of investing in a 401K account:

1. You won’t pay taxes on any money which you choose to invest, until you make a withdrawal from your 401K account

The most significant benefit of choosing to invest some of your income into a 401K account is that you can choose to set up automatic payments to your 401k account, which will be invested from your salary or wages before tax is taken from your earnings.

Which means that you’re definitely far better off placing any money which you have earmarked for your retirement in a 401K account, rather than a traditional long-term savings account. As any disposable income which you choose to save in a regular bank account will be taxed by the government before you’re able to place it into your chosen long-term savings account.

While you will have to pay tax on your investment, this will only happen when you make withdrawals from your 401K account, helping your personal finances.

2. Investing a sizeable chunk of your income into a 401K can decrease the level of income tax which you’ll be expected to pay

You may be wondering how investing in a 401K account, can help you get classified under a lower tax bracket, than the tax bracket which you’re currently in. The simple answer is that your tax bracket is dependent on how much income you bring in, during a financial year.

However, if you choose to make regular contributions straight from your untaxed salary or wages to your 401K account, any money which you invest in your 401K will be exempt from your totaled income for the year. So, it’s well worth calculating how much of your pre-tax income you’d have to invest in your 401K account, in order to drop down to a lower tax bracket.

As a bonus, if you leave your funds in your 401K account until you retire, by the time you withdraw funds from your account, you’ll be likely to be classified in a lower tax bracket, than you’re currently in, which means that in the end, you’ll avoid paying thousands of dollars in tax. Which makes investing in a 401K savings account a wise move.

3. Your savings will grow over time thanks to compound interest

By the time you access your account, your savings will have grown significantly thanks to compound interest, which means that you’ll earn interest on the interest which your account will accumulate over the decades to come.

4. Businesses which you work for will contribute to your 401K savings plan

Another huge advantage of choosing to regularly contribute to a 401K account is that it’s highly likely that your chosen employee will also contribute funds to your account if they offer an employee retirement plan. Even if you switch jobs over the years, the money which you have invested will be safely stored in your 401K savings account.

So it’s definitely worth setting up regular contributions to your 401K retirement account today, in order to maximize the benefits which you’ll receive.

Allen R Hartman Looks At The Prime Mistakes Made By First Time Real estate Investors

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When it comes to real estate investing, it would be fair to say that every mistake you make is costly. It’s at this point that some investors really struggle to keep the faith, even when the best proposition might pop up on their doorstep.

Someone who has a proven track record of investments of this ilk, particularly in the Houston area, is Allen R Hartman. He has seen investors come and go in this region of Texas, and seen all of the mistakes from the outside. This is the reason today’s article has been put together, as we take a look at some of the prime mistakes that are made for first time real estate investors.

Location, location, location

It’s something of a cliche, but the term location, location, location really couldn’t be more accurate when it comes to investing. Unfortunately, many first-time investors get this completely wrong.

Some of them simply look at a photo of their favorite area and go from there, while others might choose the place in which they grew up. Suffice to say, both are major errors, and you should instead be following the money. When we talk about following the money, it’s all about analyzing what other rental properties are in the vicinity, and also of any laws which might impact your return.

Of course, if you have any familiarity with the area it’s going to be an aid, but don’t let this be the top thing which is driving you.

You overestimate how much income you will make

This is another exceptionally common mistake, particularly if you are dealing with a potentially lucractive area like Houston. Even though it might seem completely profitable on paper, it’s not until the money starts coming in that you can really be sure of your income.

This doesn’t just relate to how much rent you can charge tenants either. It also relates to the amount of time you have between tenancies, which so many new investors don’t account for and therefore lose money in. Just because a property is ready to be rented, it doesn’t mean to say that a tenant is going to move in on the exact same day. It could in fact take months, which obviously impacts your bottom line significantly.

The opposite problem: you underestimate costs

Following on from the above, let’s now turn to the opposite problem. We’re referring to the issue where you completely underestimate the amount of money that you’re going to spend on real estate.

In truth, this could be due to a whole host of reasons. For some people, it might be because they have not budgeted for as much money as they need on property repairs, before the building hits the market. For others, it might be because they’ve completely forgotten to include the likes of agent fees and insurance in their calculations. While this might seem a simple mistake, it’s unfortunately a very common one.

Top 4 Personal Finance Tips

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Ensuring that your household finances run smoothly isn’t always easy, but utilising a few simple tips can help make everything run like clockwork.

Keeping expenditure lower than your income is the key to success, although even this most simple statement can be difficult to put into practice in the real world.

Read on for our top four personal finance tips to help you keep your finances on track.

Only spend what you can afford

Many people live beyond their means and end up in debt, so start by creating a budget of your income and expenditure to identify if you can cut any costs.

Look for savings on utility bills, examine household shopping expenditure and if your money stretches to online entertainment always make sure you take advantage offers like Mohegan Sun Casino bonuses for the chance to boost your bottom line.

Avoid using credit wherever possible. Taking out a mortgage is usually unavoidable, but incurring any other type of debt is rarely advisable.

Try and buy items up front – if you can’t afford to do so, question whether you really need to make that purchase.

Automate your finances

Setting up an automated system for paying your bills and saving for emergencies will ease the ongoing worry of managing your finances.

Link all your various accounts together and establish automatic payment methods as close as possible to payday for your priority expenditure.

Respected financial expert Ramit Sethi advises breaking down your personal finances to cover four key areas – 60% fixed costs, 25% guilt-free spending, 10% towards investments and 5% for savings.

Automating your finances based on these guidelines saves time and is easy to implement via online banking and money management applications.

Find a secondary source of income

Your full-time job provides the core of your annual income, but make sure you try to increase it where you can.

Take advantage of bonus schemes and overtime, but don’t miss out on opportunities away from work either.

Look for additional freelance assignments, build a property portfolio or create an online shop to boost your income and give your household finances some breathing space.

Save for your retirement

Starting paying into a pension as soon as you can, as the benefit from the reinvestment of your contributions will be far greater.

Someone starting a pension in their 20s will need to put aside far less of their salary than people who leave it until later in their working life.

Joining a workplace pension scheme is extremely advisable, with your pension fund boosted by payments from both your employer and the government.

Golden State Financial Group Addresses the Two Key Home Loan Modification Myths

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Thousands of people in this country have been able to avoid foreclosure thanks to home loan modifications. No longer do they have the stress of thinking they will have to face foreclosure, wondering whether they and their children will live. However, Golden State Financial Group have noticed that, despite home loan modifications being available and being used, a lot of people still don’t quite understand what they are. This is why they have felt the need to address two of the greatest myths surrounding these programs.

Golden State Financial Group on Home Loan Modification Myths

MYTH #1 – Home loan modifications are very expensive

We all need to consider where our money goes and what we spend it on. While the economy is doing better on paper, most families still have to work incredibly hard just to make ends meet. And homes come with a lot of extra costs. If, on top of that, they believe that applying for a home loan modification is an expensive process, they are more likely to avoid even looking into it. They worry that they have to go through the expense of an application only to get rejected, leaving them in even more debt.

Some companies that offer help with applications do charge a lot of money. However, it is easy enough to shop around and find one that works for very reasonable rates, or that even offers the initial work for free. This means that they will only charge you if your application is successful and that there are no upfront costs at all. Once you are approved, there are usually some very interest options to pay that fee as well, such as simply adding it to your new reduced monthly payment.

MYTH #2 – You only need a home loan modification if you are facing foreclosure

This is perhaps the biggest mistake of all. A lot of people believe that, in order to apply for a home loan modification, you must be about to lose your house. They think that is only for those trapped in an extreme cycle of debt and who have nowhere else to turn to. This is a huge myth, and one that is completely untrue. Indeed, anyone can apply for a home loan modification.

These programs are designed to adjust what you pay each month so that it is more suitable to your current financial situation. This means that your monthly payments become more affordable, and you can loosen the belt a little bit. There are different ways in which this is achieve, such as lowering your interest rate, increasing your repayment term, or even writing off some of the principal.

The reality is that financial situations change. Perhaps you have an unexpected medical bill. Perhaps your employer stops overtime provisions. Perhaps a family member is out of work for a while. In any of those situations, you should consider a home loan modification sooner rather than later, thereby ensuring you don’t end up in a financial mess.

How To Improve Your Credit

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It’s essential to have a decent credit score when you are making a big purchase like a vehicle or a house. It can also make it easier to purchase things like electronics, a mattress, or a couch. A good credit score can also help with educational loans or renting an apartment or house. The higher your credit is, the lower your interest rates on anything you borrow will be.

Life can be difficult when you have a poor credit score. All of your loans or credit cards will have very high interest rates. This is assuming you qualify for any credit cards or loans at all. You may be wondering what to do to improve your credit score if you wind up having a poor score. Here are four tips that will help you fix your credit.

Understand What Your Score Is and What It Should Be

Getting a copy of your credit report is the first step you want to take when you’re fixing your credit. With a service like Credit Sesame, you will be able to see a copy of your credit report. This will show you any negative items, any open accounts, and any hard inquiries. A hard inquiry happens whenever a potential creditor does a credit check to see if you qualify for an account.

Use Any Credit You Already Have with Responsibility

If you do have a credit card or loan that is still active, make sure you start using it responsibly. Don’t max out credit cards, and try not to utilize all of the credit that’s available to you. Make sure you are making payments before or by the due date as late payments can hurt your score. You may even want to just use a card for something like gas or groceries and pay it off every month.

Pay Off Any Outstanding Debt You Have

It’s important that you pay debts that you owe. You may still have negative items on your credit report if you had a lot of late payments, but it’s always good to pay debtors what you owe them. You may need to do a credit consolidation or you may need to negotiate with creditors to see if they will accept lower payments.

Be Dedicated to the Cause

You’ll need to be persistent when trying to repair your credit because it’s going to take some time. No one can shoot their credit score up from a 550 to a 750 overnight. You might find yourself getting frustrated as you work to improve your credit, but it’s important that you don’t give up. Be persistent and keep going forward.

These are a few suggestions you can try when you’re in the process of saving money to fix your credit. There are also a lot of helpful resources available online that will educate you and teach you how to make better financial decisions. Most people have made financial mistakes at some point in their lives. It’s important that you don’t beat yourself up about it and you just commit to making it better.

Refinancing Your Auto Loan: Is It Good Or Bad?

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Refinancing your auto loan can be beneficial or detrimental to your current financial status. Sometimes it tends to seem as if it’s the best option for your situation. However, before you refinance your auto loan, consider its advantages and disadvantages.

How Does It Work

Perhaps the best way to learn about refinancing your auto loan is to understand how it works. When you refinance your auto loan, you’re technically replacing the current auto loan that you’re having with a completely new one on different terms. In hindsight, this means you’re essentially going to pay off the current auto loan that you have with a completely new one, usually happening through a completely different lender.

This is a very different process for every owner, so be sure to pay extra attention to how your contracts work by the time you even consider taking a refinanced loan. You can find some options here: https://crediful.com/best-auto-loans/.

  • Most people tend to appreciate the appeal of refinancing car payments because of its ability to help them save money.
  • After all, some refinanced car loans are also capable of lowering monthly payments for users.
  • Other refinanced car loans also help users have lower interest rates and even adjust the lengths of their terms.
  • Sometimes, there are other more personal reasons to refinance their cars. These usually range from removing cosigners, and other different factors. No matter the reasons are, it’s essentially important to look at refinanced car loans from the perspective of its potential outcomes.

When To Refinance An Auto Loan

Refinancing your car loan can actually get you a lot of different scenarios. The point of course is clear, in that its primary goal is to alleviate some of the hardships you have with your current loan by hopefully replacing it with a plan that can be of more use to you. Of course, whether or not refinancing your car loan is a good idea depends on how you take these following effects.

If You Need Lower Monthly Payments

A lot of people actually want to refinance their car loans because they need lower monthly payments. Perhaps you’re having a rough time financially and you need more time to recuperate. A refinanced loan can get you in a state where, theoretically, it would be much more convenient for you to pay. This can be done in two ways.

  • The first is to get a lower interest rate than your previous. This normally means extending the length of time you’re going to have to pay for your automobile.
  • Another option is to extend the term of your loan, but chances are this may actually have you paying more in total compared to your total without extension.
  • Some actually have a third option, where they do both. Some lenders are actually considerate enough to allow you to extent both the loan term and the lowered interest.

Reducing Interest Charges or Decreasing Interest Rates

As stated above, you’re actually capable of requesting for lower interest charges and decreasing interest rates throughout the rest of your loan period. This can actually be done with a simple adjustment.

  • The best way to do this is to increase your credit worthiness to your lenders. If you do this prior to your refinancing, then you may potentially be able to get lower interest rates.

If You Need To Change Loan Length

Another way described above is to change the length of your loan. Always remember that you should try to do this is if you want to potentially decrease your monthly payments.

  • Don’t opt for loan length changes as your car depreciates in value every day.

If You Need To Add/Remove A Cosigner

You may actually also be able to remove or add cosigners to your loan. Removal or adding them may have personal reasons, but you’re actually capable of doing these kinds of adjustments when refinancing.

  • If you need a cosigner removed from your loan contract, you can actually opt for refinancing to get this change started.
  • Of course, this also means that the usefulness of your refinanced car loan inevitably depends on your situation. It’s always best to consult with an expert or with a consultant when you have specific questions about how refinanced car loans can affect your finances and credit reports on a more specific level.

Regardless, if you have any plans of refinancing your car loans, always maintain a spirit of caution and always double check if this plan is really for you.

Conclusion

Refinancing your auto loan can be a good option or a bad option depending on your financial status. In order to achieve this life goal of paying off your loan, there are a lot of factors to consider before even getting one. Always remember, however, that refinancing your auto loan must always be according to your current financial plan. Assess your current financial status before refinancing your auto loan.

What about you? Do you think refinancing your auto loan plan is a good idea?

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