Categories
Investing

TradeKing Review Online Trading

There are numerous options for those looking to begin the process of online trading. Few, however, offer the range of features exhibited by discount brokerage firm, TradeKing – and no other site provides these features at such an affordable cost.

Site Overview

TradeKing is an online broker site that specializes in the online trading of stocks, bonds and other options. The site ranks #1 among online brokers for site usability, so it offers a comfortable starting point for trading beginners. With excellent customer service, managed portfolio options and educational resources, the site is comprehensive in its overall features, as well.

Competitive Pricing

Cost is always a deciding factor when choosing the right brokerage site, and TradeKing offers the most competitive price point in the industry. TradeKing charges only $4.95 per trade, a steal when compared to fees at other well-known brokerage sites. Scottrade costs $7 per trade, while OptionsXpress costs $8.95. Both E*Trade and TD Ameritrade charge $9.99 per trade.

TradeKing’s flat-fee trade rate adds to the site’s user-friendliness and simplicity. While regular stock trades cost the flat $4.95, options trades cost $4.95 plus $.65 per contract. The site is not ideal, however, for penny stock traders given than stocks less than $2 per share still cost the flat rate plus a penny per share.

Tools

TradeKing stands out from other sites due to its extensive site features, including research reports, interactive charts and technical analysis tools. The site understandably boasts the fact that Barron’s ranked TradeKing 4 out of 4 stars for a solid eight years in a row in the company’s annual review of online stock and option brokers.

Education Center

TradeKing’s community education center is especially helpful for those starting out in the business of stock trading. Beginners can easily ask questions to more experienced members or choose to scour forum discussions to learn the ropes based on previously posted topics. Either way, a plethora of helpful information and potential mentoring opportunities is found through the site’s forums and available resources.

TradeKing LIVE

TradeKing LIVE is a streaming platform that is readily offered free of charge to TradeKing customers who perform more than one trade per year or maintain a minimum balance of $2,500. The platform features streaming quotes in real time, all customizable to your own unique market preferences.

Customer Service

TradeKing is perhaps best known for two things: affordability and impressive customer service. SmartMoney Magazine even ranked TradeKing #1 for customer service in 2008, 2010, 2011 and 2012. The site also boasts a live chat feature that connects customers immediately with a customer service representative. This feature is available Monday through Friday from 8 A.M. to 6 P.M. Eastern Standard Time. Representatives are also available via email and phone.

Summary of Features

Positives

  • Affordable
  • Flat-rate fees
  • Accessible customer service
  • User-friendly site
  • Resources for beginners
  • Streaming market platform
  • No account minimum

Negatives

  • Penny stock fees
  • Mutual fund fees
  • Limited research options

Overall, TradeKing is an ideal site for newbies in the stock-trading world. With remarkable customer service and lower trade costs than its competitors, TradeKing is a great place to start when venturing into online trades.

Originally posted 2014-12-27 06:00:54.

Categories
Budgeting & Saving

Could You Spend 1 Billion Dollars? You Can’t. Here’s Why.

Is it really possible to spend one billion dollars?

I was listening to the latest GrowthEverywhere podcast (discovered earlier this morning via Growth Hackers) where they interviewed Emerson Spartz, a 27 year old middle school dropout. He homeschooled himself, started the number 1 fan site for Harry Potter fans, and today, across his various media properties, garners 160 million monthly page views.

In the interview, he mentions his financial goal. He wants to earn 1 billion dollars by the time he turns 30.

That’s right, 1 billion dollars.

That made me think. Does he want one billion dollars because he needs the money?

Of course not.

At some point, you earn enough money to support yourself, to give, and to buy a few toys.

I believe that his desire to reach one billion dollars is simply a ‘can I do it?‘ goal.

He likely wants to figure out if he has the mindset and mental capability required to earn one billion dollars. He’s already earned one million.

He has an above average mindset.

The mindset required to earn one million dollars is completely different than the mindset required to earn the average American household income of $51,000.

It has to be.

Otherwise, more Americans would be earning one million dollars, right?

But the mindset required to earn one billion dollars is not much different from the mindset to earn one million dollars.

It is simply a three zero difference.

If you think earning one million is impossible and earning one billion is impossible, then figuring out how to earn either one requires roughly the same mental effort, correct?

Impossible = Impossible

If you disagree then I would challenge you to search and find the definition of impossibler.

Exactly. It’s not a word.

So with that in mind, I tried to figure out what Emerson Spartz would do with one billion dollars.

We’ve already established that no one really needs one billion dollars. Heck, people survive everyday under the poverty level.

My fiancé and I agreed that it is not about the money. He even argued that no one could easily spend one billion dollars without wasting money.

I disagreed, stating that I could spend one billion dollars easily.

So he came up with a challenge.

How Would I Spend One Billion Dollars?

The challenge is this. Spend one billion dollars. Every single cent.

The conditions: I have to spend it on myself. No donating, no buying investments, none of that. I mean, if I made one billion dollars the first time, starting from zero, I could certainly make it again.

Donald Trump is living proof. He has been bankrupt and earned it all back and more.

Richard Pryor’s character in the movie Brewster’s Millions faced a similar challenge. He had to spend a $30 million inheritance in 30 days.

 

 

Faced with this challenge, someone who has never had that much money would find it difficult to figure out how to spend it.

I disagree. I think I could spend one billion.

Once I started looking for ways to spend one billion dollars, I realized that I had to dream big. Really big.

Here’s how I would spend one billion dollars.

1) Purchase a home ($125 million)

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances

The Maison de L’Amitie is a home in Palm Beach, Florida. I chose it because it is off the coast of Palm Beach, one of the most beautiful areas in Florida. The garage has space for 50 cars. However, I would only need enough space for one.

2) Purchase a diamond encrusted Mercedes Benz ($4 million)

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances
This car was rumored to be the possession of Saudi Prince Alwaleed. An article from Business Insider claims that the car is not his. Well, now that I’ve purchased it, it’s mine.

3) Purchase an island. Two to be exact. ($29.5 million + $43.3 million)

 

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances
This is a private island off the coast of Greece. It is non-devloped and only a 30 minute speed boat ride to Athens. The listing price is approximately $43.3 million USD. That seems reasonable.

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances
This is a private island in the Caribbean sea. It is also an undeveloped island and a part of the US Virgin Islands. The island is only five miles from Cyril E. King International Airport, making it accessible to commercial and private jet air service from around the world. Which brings me to my next purchase.

4) Purchase a jet ($100 million)

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances

This jet is on the more conservative side. I could have spent 600 million on an Airbus but I decided to budget my money for the islands. (budget, ha!) This Boeing 757 jet is one that Donald Trump is selling. Obviously I would have to get a new paint job.

5) Purchase a yacht ($263 million)

Could You Spend 1 Billion Dollars? It's Easier Than You Think. | Young Finances
This yacht is said to be owned by Russian billionaire, Alisher Usmanov. It is one of the largest yachts in the world and requires a crew of 47 people.

Whew! I’m exhausted. But I’ve only spent $564.8 million! It was really hard for me to figure out how to spend the remaining $435.2 million.

But here is how I would do it.

6) Develop two islands. ($36.5 million X 2)

Now that I have two islands, I have to develop them. I need roads and other infrastructure as well as a resort home to live in when I visit. I’ll also build private resort residences for friends or anyone that is willing to rent them out. This may break one of the rules because it would qualify as an investment property. However, as a condition of purchasing Necker Island, Richard Branson was required to develop a resort so I am going to assume that I have to do the same.
Richard Branson paid $10 million dollars to develop Necker Island. That was in 1978. Using this inflation calculator from the US Bureau of Labor Statistics, I calculated that in today’s money, 10 million dollars is equal to roughly 36.5 million.

7) Hire a private pilot for a 10 year contract term. ($2.1 million)

FindaPilot.com is a service matching pilots to job postings. One job posting listed the monthly compensation for a Boeing 757 pilot operator at $17,460. One year’s salary is really just a drop in the bucket so I extended the term over 10 years. This assumes that the entire compensation package is covered by the contract salary.

Ok, I’m almost tapped out by now. At this point, I’m just looking for ways to get rid of the remaining $360 million.

8) Buy a life for 12 million Candy Crush users ($207.8 million)

How many times have you gotten a request from a friend on Facebook asking you to send them a life in Candy Crush?

I’ve heard the game is addicting.

 

Could You Spend 1 Billion Dollars? It's Easier Than You Think | Young Finances
After the first few requests I blocked the app, but maybe I could finally give them a life. The company reports that approximately 12 million users spend an average of $17.32 a month. I’d be willing to buy a life or power up or whatever it’s called for each of them for one month.

9) Fritter away the remaining funds on unnecessary objects ($152.2 million)

Earlier this year, Oprah raised over $600 million auctioning off some of her most prized possessions. She decluttered and went back to the basics. Oprah is a billionaire but for her, less is more.

Now that I have completed this exercise, I can honestly say, I would have a hard time spending a billion dollars.

Yes, my fiancé was right.

Now I challenge you. Could you really spend one billion dollars? How would you do it?

Was it a fun exercise to try to find ways to spend money?

How are you spending the money you have now? Would your spending habits change if you had a billion dollars?

Originally posted 2014-10-12 15:52:33.

Categories
Budgeting & Saving

What Should I Do With My Old 401k?

How long have you been with your employer? And how long do you plan to stay there? As a millennial, you may have a feeling of restlessness. An article from Forbes argues that job hopping is the new normal for millennials. And the most recent data released by the Bureau of Labor Statistics states that employees tend to stay with their current employer an average of 4.6 years.

If you have been with your company for a few years, you are probably thinking of that next step. It is important to continue to grow your career and stretch yourself in the process. You may decide to continue your education and go back to college or start a professional certification. Maybe you are thinking of taking some time off to travel and discover what you truly have a desire to do. It is possible that you’ve realized that you can support yourself with your side hustle and you are ready to become a full time entrepreneur.

Free Money

During your time with your employer you have likely contributed to the retirement plan. If your company offers a match program for retirement contributions, you likely contributed to take advantage of the free money.

Staying with your employer? Click here to watch why free money should make you dance.

Now that you are thinking of leaving, you wonder, “What happens to all of that money in my 401(k)?”

Don’t panic.

It’s your money. And you can take it with you.

And that’s where the Rollover IRA comes in.

The Rollover IRA

As an avid reader of Young Finances, you’ve heard of the Roth IRA and the Traditional IRA. You know that IRA stands for Individual Retirement Account and that it is a savings vehicle designed to help you save for retirement. You know that you will need to designate a beneficiary and that I have a preference when it comes to tax free money.

But I have yet to mention the Rollover IRA.

A Rollover IRA, also known as rollover, is simply a transfer of funds from a retirement account such as a 401 (k) into a Traditional or Roth IRA.

Let’s assume that you have already left your job. Starting a rollover will allow you to move assets from a 401(k) at your old employer into a brand spanking new IRA, Traditional or Roth. In essence, you would contact the administrator that holds your 401(k) and let them know that you want to rollover. They would close out your 401(k), cut you a check and you have 60 days to deposit that into an IRA account that you open.

The Rollover Tax Question

Of course, when dealing with retirement distributions, you have to consider the tax implications. Let’s see what the Internal Revenue Service has to say about it.

Will taxes be withheld from my distribution?

IRAs: IRA distributions paid to you are subject to 10% withholding unless you elect out of withholding or choose to have a different amount withheld. Withholding does not apply if the distribution is paid directly to another IRA trustee.

Retirement plans: A retirement plan distribution paid to you is subject to mandatory withholding of 20%, even if you intend to roll it over later. Withholding does not apply if you roll over the amount directly to another retirement account. A distribution sent to you in the form of a check payable to the receiving plan or IRA is not subject to withholding.

Well there you have it. Directly from Uncle Sam himself.

Tax withholding can be avoided if you roll over the distribution from a retirement plan directly to another retirement account.

You may also be thinking, why should I roll over?

Why not take the distribution, pay the tax penalty and buy a yacht to travel the world?

When you roll over a retirement plan distribution, you generally don’t have to pay tax on it until you withdraw it from the new plan. By rolling over, you are saving for your future and your money continues to grow tax-free.

If you want to allow your money to grow tax-free then a rollover may be right for you.

Ready to Rollover Your IRA?

I’ve discussed Betterment here at Young Finances several times. I have a Roth IRA with them and a few sub accounts dedicated to travel, long term investing and a recent investing challenge. I like them because they provide an easy way to invest with low costs. Betterment portfolios are customized based on your personal preferences and risk tolerance and they work around the clock optimizing returns at every level of risk.

It’s free to roll over 401(k) assets or an IRA to Betterment. There are no trading costs and portfolios contain cost-efficient index funds.

They make things easy.

To transfer your 401(k) assets, the direct rollover method is used which prevents any withholding or tax consequences.

Betterment also provides a rollover concierge to you and they are available to speak to your current 401(k) or IRA provider to make sure the transition of assets is completed smoothly.

Not rolling over? Open a Betterment account today and get a month free.

Something that could take days and tons of paperwork is made easy with Betterment. Instead of an overwhelming, time-consuming process, Betterment takes steps to ensure your money is put to work in an optimized portfolio as soon as possible.


Now that you know how easy it is to roll over, what job will you look for next? Or would you rather take a year to travel the world?

Originally posted 2014-10-06 06:00:58.

Categories
Young Finances

Should I Pay Off Student Loans or Invest?

As a recent college graduate, it’s likely that you have student loan debt. According to the National Center for Education Statistics,

“From academic years 2006-07 to 2010-11, the percentage of first-time, full-time undergraduate students at 4-year degree-granting institutions receiving any financial aid increased from 75 to 85 percent.”

With an average 4-year tuition cost of 21,000 dollars, and more and more students taking on student loan debt; a portion of your salary will go directly to paying of this debt. (Source)

However, if you research investment strategies, you’ll see the same advice over and over again. Start early and use time to your advantage.

Starting early puts the power of compounding on your side. That means more money. That also means that you are faced with a difficult question. Should you pay off student loans first or invest?

Before you can answer that question, you should evaluation your personal situation.

Do you have any other debt?

Do you have any other debt aside from student loans such as credit card debt, car loans, or medical bills? Even though your balance of student loan debt will typically be higher, these types of debt often have a higher interest rate. In order to save money on fees and interest. You should work on paying these off first. In addition, student loans give you more flexibility in terms of deferring payments whereas, waiting to pay credit card debt will most certainly affect your credit score negatively.

How much money do you have saved?

If you lack emergency savings, and you have an unexpected expense, you will cause yourself more stress than necessary. Emergency savings of 2-3 months of expenses as a bare minimum will help you manage most unexpected expenses such as hospital bills or car accidents. Take some time to build up an emergency savings fund first before you consider investing.

If you have all other debts in check and you have already set aside your emergency cash, now you can consider if it is better for you to pay off student loans or invest.

What types of loans do you have?

Typically, government issued loans have a fixed interest rate. If you do not have a fixed interest rate, then it would definitely be much wiser to pay off that loan as much as possible (or entirely) before you consider putting your money into investments. This is because when it comes to finances, figuring out what is certain and what is uncertain will help you determine where to put your efforts.

Are you ready to risk investing?

There is no such thing as a safe investment. The market can crash and businesses can go under at any time. Some investments are safer than others. When investing, there is a trade off between the risk you take and the reward you earn. The higher the risk becomes, more money will be returned on the investment. Only you can determine what types of risks you’re willing to take in your investing.

One final consideration is how you feel about your student debt. If you are the type of person who is uncomfortable with knowing that you owe someone a lot of money, or you have concerns about making that payment every month, then the answer should be obvious. Pay off your student loans.

There were many questions posed in this article. That is because there are many things to consider with a question such as this. You are the only person who can determine which choice is the correct choice. Evaluate your situation carefully, and make a decision that works best for you and causes you the least amount of worry.

This post was originally published as a part of the PNC Achievement Sessions helping you get smarter about money. Click here for more articles.

Originally posted 2014-08-20 06:00:42.

Categories
Investing

15 Totally Random Facts About People Who Retire With Roth IRA Money

“The best time to start thinking about your retirement is before the boss does.” Anonymous

Opening and investing in a Roth IRA will allow you to have a pretty sweet nest egg of tax free money once you are ready to retire.

Now that you are a member of the Roth IRA club, you should know a few totally random facts about people who retire or plan to retire with tax free money.

1) They are much more intelligent than those around them.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

2) They have seen the movie Office Space enough times to know exactly how they envisioned their final day at work.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

3) They enjoy either beaches, skiing, or golfing.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

4) They frequently take videos of themselves relaxing by the ocean.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

5) They enjoy drinking fruity drinks by the beach.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

6) They find math interesting and may not have a TI-83 graphing calculator but they’re pretty handy with a retirement calculator.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances
(Calculator Courtesy of Bloomberg)

8) They frequently ask, “what’s your number?” to start up a discussion on retirement savings.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

(Courtesy of ING)

9) They secretly love/hate either Dave Ramsey, Suze Orman, or Robert Kiyosaki.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

10) They’re not afraid of using travel reward credit cards to book flights around the world.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

11) They’ll travel to foreign countries and stop in a new restaurant just for the free fire show.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

12) They think the Roth IRA is a retirement account that is really awesome. Fo sho!

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

13) They know exactly how well balanced their portfolio is thanks to Personal Capital.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

14) They love the Roth IRA so much they’re willing to put on a wig to spread the word.

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

 

15) They’re vigilant. They know that this list skipped the number 7. They keep an eye on every dollar. Every dollar!

15 Totally Random Facts About People Who Retire With Roth IRA Money | Young Finances

This post is a part of a special Roth IRA series. See the other posts and videos by clicking over to The Ultimate Roth IRA Guide for Young Adults.

Originally posted 2014-08-14 05:00:02.

Categories
Investing

10 Important Roth IRA Rules. Number 7 is a Shocker.

By now you should know that the Roth IRA is a pretty important component to any healthy financial plan for a young adult.

If you missed the reasons why you can watch this video, or read this post.

Now it’s time to learn the basic rules for the Roth IRA. I’ve pulled the most important points together so you won’t spend time on what you don’t need to know. But if for some reason, you want all of the Roth IRA rules, check out IRS Publication 590.

How Much Can I Contribute to My Roth IRA?

1) If contributions are made only to Roth IRAs, your contribution limit generally is the lesser of $5,500 ($6,500 if you are age 50 or older), or your taxable compensation.
The contribution limits have the potential to change each year. In the last few years they have not changed, but you should double check if they have changed each year the new IRS rules are released.

When Can I Contribute to My Roth IRA?

2) You can make contributions to a Roth IRA for a year at any time during the year or by the due date of your return for that year.
If you are contributing for the year 2014, you can contribute for 2014 even into April of 2015 when tax returns are due. This is a great way to catch up if you missed the opportunity to contribute.

What if I Want to Contribute More to My Roth IRA?

3) A 6% excise tax applies to any excess contribution to a Roth IRA.
Double check your contributions before the tax year ends. Request a withdrawal for any extra contributions you’ve made in order to avoid the excess contribution penalty.

Can I Change My Mind and Open a Roth IRA if I Already Have a Traditional IRA?

4) You can convert a traditional IRA to a Roth IRA. The conversion is treated as a rollover, regardless of the conversion method used.
In order to convert, you will have to pay taxes on the balance of the Traditional IRA. Those are ‘before-tax’ dollars and they have to be changed into ‘after-tax’ dollars.

Don’t worry.

The IRS will handle that little bit of magic for you.

10 Important Roth IRA Rules. Number 7 is a Shocker. | Young Finances

When Can I Withdraw from My Roth IRA?

5) You can withdraw, tax free, all or part of the assets from one Roth IRA if you contribute them within 60 days to another Roth IRA.

How Much Can I Withdraw from My Roth IRA?

6) Direct contributions to a Roth IRA (principal) may be withdrawn tax and penalty free at any time.
You are free to withdraw your contributions at any time. Even if you just opened your account last year or two years ago. No special forms needed. Just don’t withdraw earnings. Then the tax man cometh.

Is There a Way I Can Withdraw Roth IRA Earnings Penalty Free?

7) If you withdraw contributions (including any net earnings on the contributions) by the due date of your return for the year in which you made the contribution, the contributions are treated as if you never made them.
If you withdraw contributions and earnings typically you are taxed, but if you take them in the same year you contributed, then it’s like the contributions never happened!

When Can I Withdraw All of My Money From My Roth IRA?

8) Generally, if you are under age 59½, you must pay a 10% additional tax on the distribution of any assets (money or other property) from your Roth IRA. Distributions before you are age 59½ are called early distributions.

Are There Any Exceptions? What if I Want to Buy My First Home?

8b) You may not have to pay the 10% additional tax if you are in one of the following situations.

  • You have reached age 59½.
  • You are totally and permanently disabled.
  • You are the beneficiary of a deceased IRA owner.
  • You use the distribution to buy, build, or rebuild a first home.
  • The distributions are part of a series of substantially equal payments.
  • You have unreimbursed medical expenses that are more than 10% of your adjusted gross income (defined earlier) for the year.
  • You are paying medical insurance premiums during a period of unemployment.
  • The distributions are not more than your qualified higher education expenses.
  • The distribution is due to an IRS levy of the qualified plan.
  • The distribution is a qualified reservist distribution.

How Long Can I Keep My Roth Account?

9) You are not required to take distributions from your Roth IRA at any age.
Want to leave your money in the account? You can do that. This rule works pretty nicely when you purchase an investment property inside of a Roth IRA.

What Happens to My Individual Retirement Account When I Die?

10) A beneficiary can combine an inherited Roth IRA with another Roth IRA maintained by the beneficiary only if the beneficiary either inherited the other Roth IRA from the same decedent, or was the spouse of the decedent and the sole beneficiary of the Roth IRA and elects to treat it as his or her own IRA.

Married and your spouse passes away? You can combine both Roth IRA accounts into one for the surviving spouse. A Roth IRA can also be passed down to a child as an inheritance. Now that’s how to begin building generational wealth.

And now you know the basics of the Roth IRA. Have you fallen in love yet?

Anything else you know or like about the Roth IRA?

This post is a part of a special Roth IRA series. See the other posts and videos by clicking over to The Ultimate Roth IRA Guide for Young Adults.

Originally posted 2014-08-13 06:30:43.