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Warren Buffett is notoriously a good investor. Sure, heâs made some mistakes along the way (who hasnât?), but whatever move he makes, you can bet heâs thought it through, and it will pay off â big time.
Which is why when Mr. Buffett made his biggest stock purchase of the year into Apple, we thought, âIsnât it too late to do that?â Apple is already trading at the highest price it ever has. It feels out of reach for us non-billionaires.
But it turns out, thatâs not the case. While we donât have the ability to own $111 billion (yes, billion with a B) in AAPL shares, we can still get our hands on some â and reap the rewards as the market goes up.
One of our favorite ways to get into the stock market and be a part of infamous big-tech returns, without risking billions is through a free app called Stash.
It lets you be a part of something thatâs normally exclusive to the richest of the rich â on Stash you can buy pieces of other companies â including Buffettâs choices â for as little as $1.
Thatâs right â you can invest in pieces of well-known companies, such as Amazon, Google, Apple and more for as little as $1. The best part? If these companies profit, so can you. Some companies even send you a check every quarter for your share of the profits, called dividends.1
It takes two minutes to sign up, and itâs totally secure. With Stash, all your investments are protected by the Securities Investor Protection Corporation (SIPC) â thatâs industry talk for, âYour moneyâs safe.â2
Plus, when you use the link above, Stash will give you a $5 sign-up bonus once you deposit $5 into your account.*
Kari Faber is a staff writer at The Penny Hoarder.
1Not all stocks pay out dividends, and there is no guarantee that dividends will be paid each year.
2To note, SIPC coverage does not insure against the potential loss of market value.
For Securities priced over $1,000, purchase of fractional shares starts at $0.05.
*Offer is subject to Promotion Terms and Conditions. To be eligible to participate in this Promotion and receive the bonus, you must successfully open an individual brokerage account in good standing, link a funding account to your Invest account AND deposit $5.00 into your Invest account.
The Penny Hoarder is a Paid Affiliate/partner of Stash.Â
Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.Â
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
For some reason, there is a myth out there that living a frugal life means you are living a boring life. Some even believe that if you are frugal then you are a bad parent, a bad person, and a bad friend.
If you don’t believe that, I recommend you read the comments on the next frugal living-related article on a major website such as Forbes, YahooFinance, or something similar. One thing that will be in common with most of the comments is the negativeness from many of the commenters.
I’ve even overheard conversations myself where people think I’m missing out on life because they assume that all frugal people just sit at home all day and do nothing with their lives.
That is FAR from the truth. I know many who are taking part in frugal living and I think they are some of the best 🙂
Sadly, many aren’t interested in frugal living because they believe the myth above.
There are many reasons to live a frugal life, though. Continue reading below to see the reasons for why many choose to take part in frugal living.
1. You want to be comfortable in your financial situation.
Seeking financial freedom is something that many are aiming for by living frugally. Being frugal may give you a better chance at reaching this since you are most likely honest with yourself about how much money you earn, how much you spend, and how much you need in order to survive.
Knowing that you are in control of your financial situation is a great benefit of living a frugal life!
Not being comfortable may even lead to debt, which I discuss in the next reason…
2. You want to avoid debt.
No one actually wants debt, right? By choosing to live the frugal life, you may be able to avoid debt much more than the average person.
By avoiding debt, you will have less stress due to the fact that you won’t be worried about the next bill you have to pay and the amount of interest that is building up.
You will also be more likely to retire earlier, buy the things that you actually do want to buy, and more.
Related article: How To Live On One Income
3. You want a simpler life.
Bigger isn’t always better. More isn’t always better either.
By living a frugal life, you are most likely making do with what you have, buying and using quality items that will last, and so on.
By having less stuff and less clutter in your life, you will live a more simple life that you can truly enjoy. Material items do not always equal happiness. Sometimes they just add stress, debt, and more. Think about it – the more stuff you have, the more likely that something will break, something will get lost or tossed to the side, and so on.
4. You know that you can still have fun while being frugal.
Anyone who thinks you can’t have fun while being frugal is crazy. You don’t need to spend a ton of money or be rich in order to enjoy life.
Yes, you can still go on vacations, buy your dream home, have a family, spend time with friends and family, and more. Being frugal doesn’t mean that you are giving up fun things in life.
Side note: I recommend looking into Digit if you want to trick yourself into saving more money. Digit is a FREE service that looks at your spending and transfers money to a savings account for you. Digit makes everything easy so that you can start saving money with very little effort. Read Digit Review – A New Way To Save Money.
5. You want to appreciate everything and anything around you.
When we were spending more due to lifestyle inflation, we realized we weren’t really appreciating the things we were spending our money on.
We were buying things, not enjoying them, and just being a little lazy because we weren’t in the right mindset. I didn’t like feeling this way because I felt wasteful and even guilty of the way I was behaving.
Life is great and you don’t need to be rich in order to enjoy it. By living a frugal life, you are more likely to appreciate what you have.
Would you rather enjoy each meal you eat, each item you buy, and more? Life is a great thing and appreciating the little things can be a great feeling.
Are you interested in frugal living? Why or why not? Why do you believe some are so negative about frugality?
The post Why Would A Person Choose To Live A Frugal Life? appeared first on Making Sense Of Cents.
NOTE: Due to the COVID-19 coronavirus pandemic, the IRS has extended the federal tax filing and payment deadline to July 15, 2020. The recent relief package passed by Congress may have additional tax implications. Please contact a tax adviser for information you may need to complete your taxes this year. Learn more.
According to the IRS, the average tax refund in 2018 was $3,103. When you hear that number and then do your own taxes, you expect your refund to be close to that amount. If it’s notâor worse, you owe moneyâit can be tempting to fudge the numbers to increase your refund. However, misrepresenting yourself on your return is tax fraud, and it has grave consequences.
Consequences of lying on your taxes can include:
Fines and penalties up to hundreds of thousands of dollars
Learn more about the penalties below and how to avoid them.
Will I Get Caught if I Lie on My Taxes?
The IRS gets all of the W-2s and 1099s that you receive, so it knows if you don’t report all of your income. Even if the income you’re trying to hide came in the form of cash payments, your financial activity can send up a red flag with the IRS that might trigger an audit.
What Is an IRS audit?
An IRS audit is an extensive review of your taxes and financial records to ensure you reported everything accurately. Though most people have a less than 1% chance of being audited, it’s not worth the risk.
Undergoing an audit is a time-intensive and costly process that involves providing years of documentation and even in-person interviews. If the IRS audits you, you can hire a professional to represent you and your interests.
While the IRS may have only flagged one return for audit, it can review any return from the past six years. If it finds more issues, it can add penalties and fines for every year with problems. If you made tax mistakes for the past several years, you could end up owing thousands for taxes you misrepresented.
Can You Go to Jail for an IRS Audit?
While being audited in itself doesn’t mean you did anything wrong, if you’re found guilty of tax evasion or fraud, that’s a different story. The outcome of an audit is a determining factor in whether or not you will be charged with an offense that carries jail time.
What Is the Penalty for an Incorrect Tax Return?
If the IRS finds errors on your return and audits you, the penalties and fines assessed can be steep.
According to Joshua Zimmelman, president of Westwood Tax and Consulting, lying on your taxes to reduce your tax bill or boost your refund may end up costing you more in the long run.
“If you don’t pay your tax liability by the due date, the IRS will charge you a late payment penalty. Even if you file on time, you may still be charged a late payment penalty if you under-report your income and the IRS find out,” Zimmelman said.
In addition to that penalty, the IRS can also charge you interest on the underpayment. “If you’re found guilty of tax evasion or tax fraud, you might end up having to pay serious fines,” said Zimmelman.
While tax evasion or tax fraud is normally imagined as something that affects high earners and big executives, even those with lower incomes need to be careful. When describing the penalties for tax fraud, the IRS does not differentiate between income amounts or how much you underpaid your taxes. If you falsify any information on a return, it can fine you up to $250,000.
Can the IRS Put a Person in Jail?
In addition to owing thousands of dollars in penalties, fees and interest, you may also face criminal charges that result in jail time. While the IRS itself cannot jail offenders, the courts can.
Criminal investigations and charges start when an IRS auditor detects possible fraud during an audit of your returns. Courts convict approximately 3,000 people every year of tax fraud, signaling how serious the IRS takes lying on your taxes.
How Long Is the Jail Sentence for Lying on a Tax Return?
The length of the sentence for lying on a tax return depends largely upon the specific details of your situation. These details determine the exact charge against you. That determines the penalties you may face.
The odds of the IRS charging you for fraud is relatively small. Even if you are investigated, the chances of you facing a criminal charge are pretty slim. However, with the potential consequences being as severe as they are, lying on a tax return is not worth the risk just to get a little extra money in your refund.
Are There Other Ramifications of Lying on Your Taxes?
In addition to massive fines, penalties and potential jail time, lying on your taxes to reduce your income can have other negative ramifications. For example, it can impact your ability to secure lines of credit.
“If you under-report your income, it might hurt you when you try to buy a house or apply for a personal loan,” said Zimmelman. “You might not get it if it looks like you cannot afford to pay it back, so lying on your taxes may hurt in that respect.”
When mortgage companies and banks review your application, they request copies of your tax returns to check your total income. If you lied about your income to lower your tax liability, your full income won’t be on the return. That means you may be denied for the loan you need, hurting your financial future.
Moreover, failing to file a return at all can completely tank your credit report. So, not only do lenders not have an accurate picture of your income, they see a less than stellar credit report as well.
How Can You Get More on Your Tax Return Legally?
Nobody likes owing money to the IRS at the end of the year or getting a miserly refund. However, tax fraud is a serious crime. Glossing over your income, boosting your deductions or any other form of “fudging numbers” is lying on your tax return, and that’s tax fraud.
That doesn’t mean you’re stuck with owing or receiving less than you desire. There are a number of legal ways to get a bigger tax refund.
Even if none of those avenues are open to you, it’s still better to tell the truth. Saving yourself a little money at filing time can end up costing you thousands of dollars. It may even land you in jail.
Save yourself the headache and report your information accurately and on time. And, make sure you know what you need to do to avoid common mistakes made on taxes.
The post What Happens if You Lie on Your Taxes? appeared first on Credit.com.
When it comes to buying a home or renting, there are many things to consider. While there are tons of resources on the financial implications of both options, Iâd like to share my thoughts on buying versus renting from an intentional living and minimalist perspective. The decision to buy or rent is just as much a lifestyle decision as it is a financial one. Ultimately, if the decision to buy is made, a home affordability calculator is a great resource to get started.
Longevity and Flexibility
Itâs important to consider how long youâre planning to be in a certain area and how much location flexibility you need when youâre making the decision to buy or rent. When renting, the leases are typically 12 months or less and there may be options to work out a more flexible move-out date with the landlord or management company. If you end up needing to move to a different area, you have more flexibility to do so.
It becomes a lot more complicated if you need to move away from a home you own. Youâll likely need to sell the house or rent it outâoptions that require more time and resources than if you were renting an apartment. With the amount of investment and time that a house requires, itâs probably best to stay in a location for at least a few years if youâre going to buy.
Think about how you want to spend your time. Similarly, itâs also important to consider how much responsibility youâre willing to take on. During the time I lived in an apartment, I barely changed a light bulb. There were no repairs, no additional investment and no worries.
For the past five years Iâve owned a home, itâs a whole different experience. I spend time cleaning the gutters, mowing the lawn, buying and fixing appliances and other maintenance activities that you never have to think about when youâre renting.Â Â Â Regular or unexpected repairs can quickly add up to large sums when you own a home. Part of the benefit of renting is that you donât have to deal with or budget for anything like that.
Another thing to think about is how much customization and control youâd like to have. A home you own can be customized to your exact liking, a rental on the other hand has more limitations. From painting the wall a different color to making bigger changes to your living space, youâll have greater control if itâs your home. With a rental, any customizations would need to be approved by the owner.
Amenities are another lifestyle consideration when it comes to buying or renting.
Most likely, an apartment will have more amenities than a typical home, such as a workout room, pool, large party room or even a concierge service. Of course, you may have the option of building or adding similar amenities to a home you buy, but it can be pricey and impractical investment. If you want a pool without the cost and maintenance that owning one would require, then renting an apartment with a community pool is the way to go.
From my perspective, whether you buy or rent has a significant impact on your lifestyle, particularly over the long-term. Thinking about whatâs important to you and how you want to spend your time will help you determine what best fits your desired lifestyle.
The post Home Ownership vs Renting As A Minimalist Lifestyle Decision appeared first on MintLife Blog.
Cheap Ways to Keep Kids Entertained During Holiday Break is a post originally published on: Everything Finance – Everything Finance – Its all about Money!
During the winter, it can be difficult to keep our kids entertained. Depending upon where you live, it can be really hard to entice them to stay outside for any length of time. And during the holiday break, it seems to be even worse because they don’t have school work to keep them distracted. So, we have found some cheap ways to keep kids entertained during the holiday break and the winter. Some of these ideas won’t cost you a penny, while others may cost a tiny bit of money if you don’t already have items to work with.
If you ever went to a school science fair, I am sure you have seen a homemade volcano at least once in your life. While there are plenty of different ways to make a volcano, there is one that I ran across on accident that I prefer.
One of my favorite ways to keep my drains clear is with baking soda and hydrogen peroxide. The two of them create a chemical reaction that burns away all of the gunk that may be stopping up your drains. And when my kids were younger, they loved to watch me do it because it created a really cool effect.
Which gave me the idea to start using just those two ingredients (and sometimes food coloring when I want to get really crazy) to create homemade volcanoes for them. If you have some playdoh lying around, then that and a plate will do the trick for a volcano vessel.
Just have your kids create a volcano out of the playdoh on the plate, or even on an old piece of wood from the yard. Put a couple of spoonfuls of baking soda into the volcano. Add food coloring for effect, if desired. Then take the volcano outside and add baking soda until you start to see a reaction.
We have done this with snow also, and it was pretty cool to watch the eruption change the shape and color of the snow volcano. However you choose to create the volcano, the kids will love it and it shouldn’t cost you anything to create.
If you are anything like us, then you probably have some Legos lying around somewhere. In fact, we have two huge bins of them, so there is no shortage of Leg’s around here. During the holidays, one of our favorite things to do with the surplus of Legos is to create a Lego contest.
If you have a ton of them, then the contest can get fairly creative and elaborate. And, depending upon the ages of your children, the contest will vary also. However, some of our favorite Lego contests have been:
Best Lego house
Most elaborate Lego swimming pool
Most creative Lego car
Craziest Lego family
Biggest Lego city
Best Lego luxury boat
These are just a few ideas to get you started, so get creative and have fun!
Having a treasure hunt is always a crowd pleaser and is sure to keep kids entertained. Creating a treasure hunt is similar to the Lego contest, in that it can easily be varied based on the ages of your kids and the environment. If it is too cold outside, then you can keep the treasure hunt inside.
I like to create our treasure hunts so that they are both inside and outside, so the kids can get some fresh air. The easiest way to do this is to create a simple map and create clues to where you have hidden the treasure. The treasure can be anything, really. Hiding candy for pretend gold doubloons are always a favorite of our kids. But, you could also hide a deck of cards, a pair of warm fuzzy socks, or a small set of Legos.
I like to try and find things that we have lying around that the kids have forgotten about to hide as treasure. Sometimes I’ll throw a lollipop or piece of candy in the treasure also, for added excitement.
The treasure can be hidden in an old bag or something more elaborate like a plastic pirate treasure chest with a lock. If you use something like this, then they will have to find the key along the way before they get to the treasure. This is a ton of fun!
Make Your Own Games
Making your own games can also be a lot of fun. Especially if you put the kids in charge of making them. We happen to have a couple of artists in our house who love creating and drawing, so this is a great plan for them.
Just give them some blank paper, scissors, and crayons, markers or colored pencils to get started. Then have them create their own Snakes and Ladders, Candy Land or Pin the Tail on the Donkey game. And it doesn’t even have to be a donkey, but any animal they’d like to pin the tail on.
Let them get creative and really work hard to create their own versions of the games. Once they are done, then comes the real fun for everyone. Making and playing these homemade games can keep kids entertained for hours. Which I am a huge fan of!
And last, but definitely not least, creating an obstacle course is always a ton of fun. We like to use things such as:
Creating an obstacle course is something that we usually prefer to create outside, just so there’s less chance of slamming into walls or furniture. But, it could be created indoors also, if the weather outside simply won’t comply.
Have your kids work on finding the raw materials around the house or yard to create the obstacle course with. Then have them create the obstacle course, which needs to be realistically doable. Then, you can time each kid running the obstacle course to see who the winner is.
After the course has been run a few times, then have the kids rearrange to create a completely different course. This is an activity that can not only keep them busy for hours but help burn out some energy and get them some fresh air. Bonus!
These are some fantastic, cheap ways to keep kids entertained! Click To Tweet
Keep Kids Entertained Summary
When it comes to the holidays and too much free time, there are many ways to keep kids entertained. And they don’t have to cost you very much if any, money. Use what you have at your disposal first, so you don’t have to buy anything extra. So, creating a volcano or an obstacle course might be great first choices. After you’ve tried those, I would suggest having your kids make their own games and a Lego contest, followed up by a massive treasure hunt. No matter which options you choose, your kids are sure to be entertained, which makes everyone’s life much easier.
What ideas do you have to help keep kids entertained during the holidays this year?
Cheap Ways to Keep Kids Entertained During Holiday Break is a post originally published on: Everything Finance – Everything Finance – Its all about Money!
Those ubiquitous checklists of âdorm room essentialsâ for college freshmen are filled with items that will be ditched by the end of first semester.
Some parents âgo to the store and grab a list like they did when their kids were in elementary and high school and just go straight down the list,â says Lisa Heffernan, mother of three sons and a college-shopping veteran. Or they buy things they only wish their students will use (looking at you, cleaning products).
You can safely skip about 70% of things on those lists, estimates Asha Dornfest, the author of Parent Hacks and mother of a rising college sophomore whoâs home for the summer.
What Not to Buy or Bring
Freshmen really need just two things, says Heffernan, co-founder of the blog Grown and Flown: a good mattress topper and a laptop.
Here are seven items you can skip:
Printer. Donât waste desk space or, worse, store it under the bed; printers are plentiful on campus.
TV. Students may watch on laptops or on TVs in common areas or in someone elseâs room. Bonus: Your teen gets out and meets others.
Speakers. Small spaces donât require powerful speakers; earphones may be a good idea and respectful of roommates.
Car. Some colleges bar freshmen from having cars on campus or limit their parking. You also may save on insurance by keeping the car at home.
Luggage. If you bring it, you must store it. Heffernan suggests collapsible blue Ikea storage bags with zippers.
Toiletries to last until May. Bulk buying may save money, but you need storage space.
Duplicates of anything provided by the college, such as a lamp, wastebasket, desk chair or dresser.
Items left behind when students pack for the summer are telling. Luke Jones, director of housing and residence life at Boise State University, sees unopened food â a lot of ramen and candy â and stuffed animals and mirrors.
Jones says many students regret bringing high school T-shirts and memorabilia and some of their clothes (dorm closets typically are tiny).
What Can You Buy, Then?
Before you shop, find out what the college forbids (candles, space heaters, electric blankets and halogen lights are common). Have your student check with assigned roommates about appliances (whoâs bringing a fridge or microwave?) and color scheme if they want to set one. Know the dimensions of the room and the size of the bed. And most of all, know your budget. Not everything has to be brand new.
Ten things â besides the all-important mattress topper and laptop â that many students consider dorm room essentials include:
One or two fitted sheets in the correct bed size, plus pillowcases. Heffernan says most students donât use top sheets.
Comforter or duvet with washable cover.
Towels in a distinctive pattern or light enough for labeling with laundry marker, plus shower sandals.
Power cord with surge protector and USB ports.
Basic first aid kit.
Easy-to-use storage. If itâs a lot of work to get something out, your student wonât, Heffernan says.
Cleaning wipes. Students might not touch products that require multiple steps, but they might use wipes, according to Heffernan.
Reading pillow with back support for studying in bed.
Area rug. Floors are often hard and cold.
Comfort items. Dornfest says it could be a blanket or a picture of the dog â something from home that will make the space a bit more personal.
Afraid youâll forget something important? You might, Heffernan says. But chances are, you or your student can order it online and get it delivered. Consider doing this with some items simply to avoid the hassle of bringing them yourself, and remember that âdorm necessitiesâ often go on sale once school starts.
Do a Reality Check
If you or your student still want to replicate the rooms youâve seen on Instagram and Pinterest, think about how the room will actually be used.
Once your son or daughter moves in, the room will never look like that again. Opt for sturdy items and be realistic. Will throw pillows make the place look more homey and inviting, or will they be tossed on the floor until parentsâ weekend?
Dornfest, a co-host of the Edit Your Life podcast, offers a compelling reason not to make things too comfortable. âA freshman needs to be encouraged to get out of the dorm room,â she says. âAnything that pulls you into campus life can be good.â
Sheâs not advocating a monk-like environment, but rather one that encourages breaking out of routines. College should be a time to try new things and meet people from different backgrounds. Dornfest advises making the bed as comfortable as possible and keeping a few reminders of home. The ideal dorm room is more launch pad than cocoon.
More from Nerdwallet
Budgeting for College Students
How to Build Credit at 18
How to Choose a Student Credit Card
The article 7 Things College Freshmen Donât Need â and 10 They Do originally appeared on NerdWallet.
Within the past few years, we’ve seen a growing interest in everything wellness. With a more mindful approach on how we approach our day-to-day lives, the emphasis is now placed on maintaining our mental and emotional health, as we are actively working to ensure that all aspects of our lives remain balanced — our homes included.
This is why the real estate wellness market soared in 2017 to one billion dollars. But what about us regular homeowners, who werenât lucky enough to buy homes designed in such a fashion? Well, this is where interior design comes in to lend a helping hand.
There are a number of ways you can incorporate wellness design into your home. Let’s go over a few easy ways to get started.
Bringing nature into your home
There is no denying that being around nature â or even just natural materials â can be incredibly soothing. Due to this, bringing the outdoors in is something that many interior designers who follow this trend will try to do, and it’s also the easiest way for you to get started.
Start by incorporating plants and greenery in various spaces in your home. For instance, you can set up hanging plants so there are leaves and flowers dripping from the ceiling, you can encourage climbers to grow across your walls, and accentuate your decor by adding plants in creative pots.
If this seems like too much maintenance, then opt for furniture and furnishings in natural materials instead.
Stick to wood and natural fibers as much as possible. Since you will need to add metals to the scheme as well, it is best to opt for more antique-looking pieces.
Selecting calming color palettes
You probably know that the psychology behind the way our mind interprets color plays a big role in interior design. And even if you haven’t yet read it somewhere, you instinctively know that certain shades can impact your mood and frame of mind.
It comes as no surprise to learn that many of the color trends for 2020 are based on this. For instance, there is a fair amount of focus on the color blue â which is known for its calming properties.
So, feel free to invest in navy or peacock blues. In case you prefer something a little brighter, then pinks, yellows, and orange are also great warm tones to consider. These shades too are associated with kindness, warmth, and enthusiasm respectively.
Let the light shine in
Natural light in your home is important for a number of reasons. First and foremost, it can help to brighten up your mood considerably. At the same time, being continuously exposed to light helps to regulate your circadian rhythm, helping you to sleep and wake at appropriate times.
This is why it is important to ensure that your home is flooded with plenty of light. Windows and skylights naturally play a significant role. However, there is a lot you can do with your interior design to increase how light travels throughout the house.
For instance, you can position mirrors opposite your windows so that the light bounces off to other parts of a room, or use light and bright window treatments to brighten the space.
You should also try to keep the walls and flooring in a lighter color so that the light is reflected rather than absorbed. Oh, and glossy paint, especially on the ceiling, can go a long way too.
Focus on ergonomics
Naturally, wellness in interior design isnât just about how your house looks. It also has a great deal to do with how your home environment feels. Thus, the design must include elements of comfort throughout the space.
For instance, if you live in a warmer part of the country, it is only natural that you will need to set up many cooling units throughout the house. Some of these will need to be standalone devices. Now, rather than eschewing these products completely, find a way to incorporate them into the existing design.
Letâs imagine that you have embraced a more natural theme for your interiors. Then, perhaps you can design wooden slats to cover the sides and top of the unit so that it isnât as noticeable. If you decide to opt for this route, make sure that no important outlet is covered up. There should be plenty of airflow in and out of the space as well.
Or, you could use nature-inspired stickers to help the unit blend in. At the very least, set up some plants around it so that it doesnât stand out too much.
As you can see, there are so many different ways to incorporate the wellness theme into your home. So, if you are looking forward to a happier and more balanced year ahead, then these are the tactics you should consider.
6 Smart Home Devices to Keep Your Pets Safe, Well Fed and Entertained While Youâre Away Planning a Redesign? Here are the Most Popular Interior Design Styles You Get to Choose From Hereâs Why a Womb Chair is the Perfect Addition to Your InteriorsHow to Successfully Integrate Smart Home Tech into Your Own Home
The post Indoor Wellness: How to Recreate the Ultimate Interior Design Trend of 2020 appeared first on Fancy Pants Homes.
FHA loan requirements are simple; they’re different than conventional loan requirements. For a conventional loan, for example, you will need a good credit score. However a FHA loan credit score is only 580.
If you’re a first time home buyer and need a first time home buyer loan to purchase your dream home, then keep reading to find out how an FHA loan is right for you.
Click here to compare the rates if you’re thinking of applying for an FHA loan. It’s totally FREE.
In this article, we will cover several topics around the FHA loan requirements. As a first time home buyer, you will need to be aware of these requirements so that your home-buying process can go as smoothly as possible.
Here’s what we will cover: FHA loan limits, FHA loan rates, FHA loan credit score, FHA lenders, and so many others. In addition, we will address the difference between conventional loan requirements versus FHA loan requirements.
Click here to apply for a FHA loan.
FHA Loan Requirements – Guideline & Limits:
Buying a house through an FHA loan, while exciting, can be daunting, especially as a first time home buyer. Taking a few moments to familiarize yourself with the FHA loan requirements can save you from costly mistakes during the home buying process. Below is an overview of FHA loan process
FHA loan definition
What is an FHA loan? Simply stated, an FHA loan is a loan that is insured by the Federal Housing Administration. These type of loan are popular among first time home buyers because they allow them to put as low as 3.5% down payment and require a very low credit score.
So if you’re a first time home buyer with a bad credit, then an FHA loan makes more sense.
Feeling Overwhelmed With Your Finances?, You have options and there are steps you can take yourself. But if you feel you need a bit more guidance, simply speak with a financial advisor. SmartAssetâs free tool matches you with fiduciary advisors in your area in 5 minutes. If you are ready to meet your goals, get started with Smart Asset today.
FHA loan limits
FHA loan limits refers to the maximum amount of loan the FHA will give you. For 2019, for example, in low cost areas, FHA loan requirements have been set in place allowing the maximum amount for a single family home to be $314, 827. Whereas for a four-plex, the maximum amount is $605,525.
FHA loan limits – low cost areas
For high cost areas, the FHA loan limits for a single family home is $726, 525 and for a duplex, the FHA limit is $930, 300. Those limits, of course vary depending on your states and they are update annually. So visit your state to determine what the FHA mortgage lending limits are.
FHA loan limits – high cost areas
Click here to compare current FHA loan mortgage rates
FHA loan vs conventional
When it comes to get a home loan for presumably the biggest purchase you’ll ever make in your life, you certainly have to know the key differences between an FHA loan and a conventional loan. While it’s easier to get approved for an FHA loan, it’s important so that you can make the best decisions.
FHA loan requirements
The FHA loan requirements are fairly simple and straightforward. Here’s what they require: 1) You must have a credit score of at least 580.
2) A 3.5% down payment is required. (*note, if your FICO score is between 500 and 579, then you will have to put 10% down payment). 3) You will have to pay Private Mortgage Insurance (PMI);
4) Your debt to income ratio must be < 43%. Your debt to income ratio is the percentage of your income that you spend on debt, including mortgage, car loan, student debt, etc..
5) The home you intend to purchase must be your primary residence. You must also occupy the property within 60 days of closing.
Click here to shop for FHA mortgage rates in your area
It can’t be an investment property. However, you can buy a duplex or triplex, live in one unit and rent the other units. As long as you reside in the property, you will satisfy that requirement. Also, the house must meet FHA loan limits (see above).
6) Finally, and of course, you must have a steady income and proof of employment. I will discuss later whether a FHA loan is better than a conventional loan. For more information about FHA loan requirements in general, visit the FHA website.
Conventional loan requirements
The requirements for a conventional loan, however, are much stricter. By the way a conventional loan or traditional loan is not insured by the Federal Housing Administration. But instead it is guaranteed by a private lender such as a bank, credit union, mortgage companies, etc…
Of course whether you will qualify for a conventional loan vary from lenders to lenders, but the following are required:
1) A credit score of at least 680 (of course the higher the score is, the more likely you will get qualified, and the lower your interest rate on the loan will be.
2) A down payment of at least 20% of the house purchase price. If you have less than 20%, you still can get the loan. But the problem is, you will have to take out private mortgage insurance, pay its premiums until you achieve at least 20% equity in the house.
3) Your debt to income ratio needs to be around 36% and no more than 43%.
Should you apply for an FHA loan or conventional loan?
As you can see above, the FHA loan requirements are less strict than the conventional loan requirements. However, which one you choose to apply to depends on your personal circumstances.
But if you are a first time home buyer, there are a lot of good reasons why an FHA loan would seem more appealing to you. For one, the down payment is only 3.5% (compare that with a 20% down payment a conventional loan requires). A down payment is the upfront money you need to to make when buying a home.
As a first time home buyer, saving for a 20% down payment on a house can be a big burden. Homes are expensive. For example, saving for $450,000 home can take you years to accomplish, especially if you have other debt like student debt, credit card debt, car loan, etc… So a 3.5% down payment makes it easier for you to buy your own home.
Second, the FHA loan credit score is only 580. Although, you should always take steps to raise your credit score, sometimes certain changes in your life may leave you with a low credit score. Perhaps, you had to file for bankruptcy which resulted in a low credit score.
Or maybe you never had a credit card, which means that you don’t have an established credit history. Or maybe you’re a victim of identity theft which lowered your credit score. So there are several reasons why you could have a low credit score.
However, that shouldn’t mean you can’t buy a house. That’s why the FHA loan requirements make it easier for folks who otherwise would not have been qualified for a conventional loan.
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Buy a home with the Right Financial Advisor
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The post FHA Loan Requirements – Guideline & Limits appeared first on GrowthRapidly.
One of the most common questions I receive from readers like you—especially since Grow (Acorns + CNBC) published my story last week—asks me how I invest.
All this theoretical investing information is fine, Jesse. But can you please just tell me what you do with your money.
That’s what I’ll do today. Here’s a complete breakdown of how I invest, how the numbers line up, and why I make the choices I make.
Of course, please take my advice with a grain of salt. Why?
My strategy is based upon my financial situation. It is not intended to be prescriptive of your financial situation.
I’ve hesitated writing this before because it feels one step removed from “How I Vote” and “How I Pray.” It’s personal. I don’t want to lead you down a path that’s wrong for you. And I don’t want to “show off” my own choices.
I’m an engineer and a writer, not a Wall Street professional. And even if I was a Wall Street pro, I hope my prior articles on stock picking and luck vs. skill in the stock market have convinced you that they aren’t as skilled as you might think.
All I can promise you today is transparency. I’ll be clear with you. I’ll answer any follow-up questions you have. And then you can decide for yourself what to do with that information.
Are we clear? Let’s get to the good stuff.
How I Invest, and In What Accounts…?
In this section, I’ll detail how much I save for investing. Then the next two sections will describe why I use the investing accounts I use (e.g. 401(k), Roth IRA) and which investment choices I make (e.g. stocks, bonds).
How much I save, and in what accounts:
401(k)—The U.S. government has placed a limit of $19,500 on employee-deferred contributions in 2020 (for my age group). I aim to hit the full $19,500 limit.
401(k) matching—My employer will match 100% of my 401(k) contributions until they’ve contributed 6% of my total salary. For the sake of round numbers, that equates to about $6,000.
Roth IRA—The U.S. government has placed a limit of $6,000 on Roth IRA contributions (for my earnings range) in 2020. I am aiming to hit the full $6,000 limit.
Health Savings Account—The U.S. government gives tremendous tax benefits for saving in Health Savings Accounts. And if you don’t use that money for medical reasons, you can use it like an investment account later in life. I aim to hit the full $3,500 limit in 2020.
Taxable brokerage account—After I achieved my emergency fund goal (about 6 months’ of living expenses saved in a high-yield savings account), I started putting some extra money towards my taxable brokerage account. My goal is to set aside about $500 per month in that brokerage account.
That’s $41,000 of investing per year. But a lot of that money is actually “free.” I’ll explain that below.
Why Those Accounts?
The 401(k) Account
First, let’s talk about why and how I invest using a 401(k) account. There are three huge reasons.
First, I pay less tax—and so can you. Based on federal tax brackets and state tax brackets, my marginal tax rate is about 30%. For each additional dollar I earn, about 30 cents go directly to various government bodies. But by contributing to my 401(k), I get to save those dollars before taxes are removed. So I save about 30% of $19,500 = $5,850 off my tax bill.
Editor’s Note: The original version of this article incorrectly stated that 401(k) contributions are taken out prior to OASDI (a.k.a. social security) taxes. That claim was incorrect. 401(k) contributions occur only after OASDI taxes are assessed.
Many thanks to regular reader Nick for catching that error.
Second, the 401(k) contributions are removed before I ever see them. I’m never tempted to spend that money because I never see it in my bank account. This simple psychological trick makes saving easy to adhere to.
Third, I get 401(k) matching. This is free money from my employer. As I mentioned above, this equates to about $6,000 of free money for me.
Roth Individual Retirement Account (IRA)
Why do I also use a Roth IRA?
Unlike a 401(k), a Roth IRA is funded using post-tax dollars. I’ve already paid my 30% plus OASDI taxes, and then I put money into my Roth. But the Roth money grows tax-free.
Let’s fast-forward 30 years to when I want to access those Roth IRA savings and profits. I won’t pay any income tax (~30%) on any dividends. I won’t pay capital gains tax (~15%) if I sell the investments at a profit.
I’m hoping my 30-year investment might grow by 8x (that’s based on historical market returns). That would grow this year’s $6000 contribution up to $48000—or about $42000 in profit. And what’s ~15% of $42000? About $6,300 in future tax savings.
Health Savings Account (H.S.A.)
The H.S.A. account has tax-breaks on the front (36.7%, for me) and on the back (15%, for me). I’m netting about $1300 up-front via an H.S.A, and $4,200 in the future (similar logic to the Roth IRA).
Taxable Brokerage Account
And finally, there’s the brokerage account, or taxable account. This is a “normal” investing account (mine is with Fidelity). There are no tax incentives, no matching funds from my employer. I pay normal taxes up front, and I’ll pay taxes on all the profits way out in the future. But I’d rather have money grow and be taxed than not grow at all.
Summary of How I Invest—Money Invested = Money Saved
In summary, I use 401(k) plus employer matching, Roth IRA, and H.S.A. accounts to save:
About $7,100 in tax dollars today
About $6,000 of free money today
And about $10,500 in future tax dollars, using reasonable investment growth assumptions
Don’t forget, I still get to access the investing principal of $41,000 and whatever returns those investments produce! That’s on top of the roughly $25,000 of savings mentioned above.
I choose to invest a lot today because I know it saves me money both today and tomorrow. That’s a high-level thought-process behind how I invest.
How I Invest: Which Investment Choices Do I Make?
We’ve now discussed 401(k) accounts, Roth IRAs, H.S.A. accounts, and taxable brokerage accounts. These accounts differ in their tax rules and withdrawal rules.
But within any of these accounts, one usually has different choices of investment assets. Typical assets include:
Stocks, like shares of Apple or General Electric.
Bonds, which are where someone else borrows your money and you earn interest on their debt. Common bonds give you access to Federal debt, state or municipality debt, or corporate debt.
Real estate, typically via real estate investment trusts (REITs)
Commodities, like gold, beef, oil or orange juice
Here are the asset choices that I have access to in my various accounts:
401(k)—my employer works with Fidelity to provide me with about 20 different mutual funds and index funds to invest in.
Roth IRA—this account is something that I set up. I can invest in just about anything I want to. Individual stocks, index funds, pork belly futures etc.
H.S.A.—this is through my employer, too. As such, I have limited options. But thankfully I have low-cost index fund options.
Taxable brokerage account—I set this account up. As such, I can invest in just about any asset I want to.
How I invest and my personal choices involve two layers of diversification. A diverse investing portfolio aims to decrease risk while maintaining long-term investing profits.
The first level of diversification is that I utilize index funds. Regular readers will be intimately familiar with my feelings for index funds (here 28 unique articles where I’ve mentioned them).
By nature, an index fund reduces the investor’s exposure to “too many eggs in one basket.” For example, my S&P 500 index fund invests in all S&P 500 companies, whether they have been performing well or not. One stellar or terrible company won’t have a drastic impact on my portfolio.
But, investing only in an S&P 500 index fund still carries risk. Namely, it’s the risk that that S&P 500 is full of “large” companies’ stocks—and history has proven that “large” companies tend to rise and fall together. They’re correlated to one another. That’s not diverse!
To battle this anti-diversity, how I invest is to choose a few different index funds. Specifically, my investments are split between:
Large U.S. stock index fund—about 40% of my portfolio
Mid and small U.S. stock index fund—about 20% of my portfolio
Bond index fund—about 20%
International stocks fund—about 20%
This is my “lazy portfolio.” I spread my money around four different asset class index funds, and let the economy take care of the rest.
Each year will likely see some asset classes doing great. Others doing poorly. Overall, the goal is to create a steady net increase.
Twice a year, I “re-balance” my portfolio. I adjust my assets’ percentages back to 40/20/20/20. This negates the potential for one “egg” in my basket growing too large. Re-balancing also acts as a natural mechanism to “sell high” and “buy low,” since I sell some of my “hottest” asset classes in order to purchase some of the “coldest” asset classes.
Any Other Investments?
In June 2019, I wrote a quick piece with some thoughts on cryptocurrency. As I stated then, I hold about $1000 worth of cryptocurrency, as a holdover from some—ahem—experimentation in 2016. I don’t include this in my long-term investing plans.
I am paying off a mortgage on my house. But I don’t consider my house to be an investment. I didn’t buy it to make money and won’t sell it in order to retire.
On the side, I own about $2000 worth of collectible cards. I am not planning my retirement around this. I do not include it in my portfolio. In my opinion, it’s like owning a classic car, old coins, or stamps. It’s fun. I like it. And if I can sell them in the future for profit, that’s just gravy on top.
Summary of How I Invest
Let’s summarize some of the numbers from above.
Each year, I aim to save and invest about $41,000. But of that $41K, about $15K is completely free—that’s due to tax benefits and employer matching. And using reasonable investment growth, I think these investments can save me $15,000 per year in future tax dollars.
Plus, I eventually get access to the $41K itself and any investment profits that accrue.
I take that money and invest in index funds, via the following allocations:
40% into a large-cap U.S. stock index fund
20% into a medium- and small-cap U.S. stock index fund
20% into an international stock index fund
And 20% into a bond index fund
The goal is to achieve long-term growth while spreading my eggs across a few different baskets.
And that’s it! That’s how I invest. If you have any questions, please leave a comment below or drop me an email.
If you enjoyed this article and want to read more, Iâd suggest checking out my Archive or Subscribing to get future articles emailed to your inbox.
This articleâjust like every otherâis supported by readers like you.
If you don’t have the time, the money or the expertise to buy individual stocks or bonds to build your investment portfolio, then consider the best Vanguard index funds.
Index funds are a good way to start saving and investing for retirement.
One reason is because the chance of making more money investing in index funds is far higher than it is investing in individual stocks, especially if you are a beginner investor.
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As the master of value investing, Warren Buffett, once said “a low-cost index fund is the most sensible equity investment for the great majority of investors.” “By periodically investing in an index fund, the know-nothing investor can actually out-perform most investment professionals.”
But how do you find and choose among the best Vanguard index funds? Don’t worry, GrowthRapidly can help make your choice easier.
On this page:
Index funds vs mutual funds
Index funds are one of the easiest and cheapest ways to invest in the stock market. As opposed to a mutual fund, which is actively managed by a fund manager, index funds are passive.
This means that index funds attempt to track the performance of a particular index, such as the Standard & Poor’s 500 index of 500 large U.S. company stocks or the CRSP US Small Cap Index.
So, when you invest in the Vanguard S&P 500 Index fund (which we’ll discuss in more detail below), you’re essentially buying a piece of the 500 largest publicly traded US companies.
Index funds don’t jump around; they stayed invested in the market. Again, they simply track the performance of the stock index.
Related: What is a mutual fund?
Whereas with a mutual fund, fund managers might make mistake by not being invested when the market goes up or by being too aggressive when the market goes down.
That doesn’t mean mutual funds are not good investments. In fact, they are great investment vehicles. But when it comes to long term investments, index funds are the best. However, these 8 mutual funds are great for long term investing.
Like a mutual fund, you can buy an index fund through a fund company like Vanguard.
The main advantage of a Vanguard index fund is its low-cost, which is usually less than 1% annually. Another benefit of Vanguard index funds is that they are diversified. Like mutual funds, they invest to multiple companies, thus spreading out the risk.
One of the downside with index funds, however, is that they won’t outperform the market they track.
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Why choosing the best Vanguard index funds to invest your money?
There are thousands of fund companies (such as Fidelity, Schwab, JP Morgan) where you can buy index funds. Different companies have different experiences and expertise with different type of funds. So, it can be difficult to know which one is the best.
Here are four main factors to consider when looking to buy the best index funds for long term investments:
The company: Is it a reputable and well-known company with a great track record?
Fees: Another major factor to consider in picking a fund company is its cost. Excessive fees have a negative effect on your investment return. These fees are deducted from your index fund’s balance every year. Other fees can apply as well. So always find a company with a low fee.
Reasonable minimum investment: Will you be able to invest with as little as $1000?
Performance: Although past performance does not guarantee future performance, look for a fund company with a strong record of performing well against its competitors over the short and long term as well.
If you are an intelligent investor who has done his or her research, you will conclude that among the various fund companies out there, Vanguard comes out on top.
Jack Bogle, who recently died and who founded the firm Vanguard Group, invented the index fund in 1976.
Today, Vanguard is one of the World’s biggest and the best investment funds with approximately $5.6 trillion in assets.
Moreover, Vanguard has the best index funds because of their ability to keep their operating fees so low. Vanguard has all types of stock and bond index funds and their fees are the lowest.
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The advantages and disadvantages of Vanguard Index funds.
Pros of the best vanguard index funds
By now, you know that an index fund is well diversified. But you might know these two other pros that make Vanguard index funds the best:
Good return: Vanguard index funds generally delivers a good return because their expenses are relatively low. The average Vanguard Index fund has an expense ratio of 0.2% per year (compare that to the average index fund operating expenses of 1.4% per year.) A 1.2% difference can be a significant difference on your return. Operating expenses are also lower because ongoing research is not needed to identify companies to invest in.
Tax-friendly: not only Vanguard index funds have lower operating expenses, which help increase your returns, they are also tax-friendlier when you invest outside of retirement accounts. Because a mutual fund is actively managed, they tend to jump around by selling and buying stocks more frequently. By doing that, it increases a fund’s taxable capital gains distribution. Whereas an index fund stays invested and not trying to jump around.
Cons of the best Vanguard index funds
Despite their low costs and tax-friendliness, their minimum investment while seem reasonable, might not be for the beginner investor with little money to invest.
Most Vanguard index funds requires a $3,000 minimum initial investment. Retirement account investors who plan on starting with less might be at a disadvantage.
Moreover, Vanguard has an overwhelming number of index funds to choose from. That can make it tedious for an investor to decide which ones are the best. But that’s why we have compiled the top Vanguard index funds for you.
The 10 Best Vanguard Index Funds to Buy in August 2020:
Now that you know what an index fund is and why investing Vanguard index funds makes good sense, in no particular order, below are 10 of the best Vanguard index funds to add to your investment portfolio.
Vanguard S&P 500 Index Admiral (VFIAX)
Of all the Vanguard index funds in this list, the Vanguard S&P index fund, which tracks the Standard & Poor’s 500, is perhaps the best Vanguard index fund. One reason is that the fund invest in 500 of largest U.S. companies with a few a midsize stocks.
Some of the big name stocks in this index fund includes Apple (AAPL), Microsoft (MSFT), and Google/Alphabet (GOOGL). Another reason to select this fund is that the cost is pretty low, (0.04%) if not the lowest of all the index funds.
Index fund cost is an important factor in choosing an index fund to invest in, because fees are deducted from your balance and thus reduced your rate of returns. The last reason to invest in the VFIAX is because the initial minimum investment is also low ($3,000).
So if you’re looking for an index fund that maintains low operating expenses while enjoying a good rate of return, the Vanguard S&P 500 Index Admiral is for you.
Vanguard Developed Market Stock Index Admiral
For diversification, you should consider in your investment portfolio some index funds that invests in foreign countries. International funds are diversified because they invest in countries around the world. If so, the Vanguard Developed Market Stock Index Admiral fund (VTMGX) is a fine choice.
This Vanguard index fund tracks the performance of the FTSE Developed All Cap ex US Index. It invests in large cap stocks in 24 developed countries. Some of its several blue-chip multinational companies include the Toyota Motor Corp (7203), Royal Dutch Shell (RDS.A.), Nestle SA (NESN), making it one of the best Vanguard index funds.
This index fund has a minimum investment of $3,000 and an expense ratio of 0.07%.
Vanguard Emerging Markets Stock Index Admiral
While Vanguard index funds invested in U.S. stocks tend to perform better than Vanguard index funds invested in emerging markets, emerging markets in Latin America, Asia, and Eastern Europe should not be overlooked.
If you don’t mind investing in emerging economies, consider checking out the Vanguard Emerging Markets Stock Index Admiral (VEMAX), which is currently one of the best Vanguard index funds to buy now.
In fact, some of the big name foreign companies included in this index fund are Alibaba Group Holding Ltd ADR (BABA), Tencent Holdings Ltd (TCEHY), Taiwan Semiconductor Manufacturing Co Ltd (2330.TW), and China Construction Bank Corp Class H (00939).
This investment attempts to track the performance of the FTSE Emerging Markets All Cap China Inclusion Index.
One of the downside of this index fund is that it has an expense ratio of 0.14%, but it still has a low minimum initial investment of $3,000.
Vanguard Total Stock Market Index (VTSAX)
The Vanguard Total Stock Market Index (VTSAX) is one of the best Vanguard index funds. It captures the total market.
That means it gives investors broad exposure to the entire U.S. equity market including large cap, mid cap and small cap growth and value stocks.
Some of the big name companies included in this Vanguard fund are: Facebook, Alphabet, JPMorgan Chase, Apple, and Microsoft.
This Vanguard index fund has an expense ratio of 0.04% and a minimum initial investment of $3,000.
So, if you’re looking for a well diversified Vanguard fund and don’t mind a little volatility, this index fund is for you.
Note that you can purchase this index fund as an ETF as well. It start at the price of one share.
Vanguard Mid-Cap Index Admiral
The Vanguard Mid-Cap Index Admiral fund (VIMAX), which tracks the CRSP U.S. Midcap Index, may be appropriate for you if you have a long term perspective.
That is because the index fund, which consists of midsize and smaller stocks, performs better in the long term rather than the short term, making it one of the best Vanguard index funds to include in your investment portfolio.
The fund targets midsize companies. The minimum investment is $3,000 with an operating expense of 0.05%.
So if you’re looking for a Vanguard index fund to use for retirement investingand you don’t expect to tap into your investment money for 10 years or more, the Vanguard Mid-Cap Index Admiral fund is for you.
Vanguard Small-Cap Index Admiral
The Vanguard Small-Cap Index Admiral (VSMAX), as the name suggests invests in stocks of smaller companies.
This index fund tracks the CRSP U.S. Small Cap Index. Some of its holdings include DocuSign, Inc (DOCU), Leidos Holdings Inc (LDOS), Tyler Technologies, Inc (TDY), Equity Lifestyle Properties, Inc (ELS), etc…
This index fund, just like the Vanguard Mid-Cap Index Admiral fund, tends to perform better in the long term. Therefore, invest in this Vanguard fund if you don’t plan to use your money within the next five years.
So if you’re looking for a broadly diversified index of stocks of small U.S. companies, the Vanguard Small-Cap Index Admiral is a good choice. This index fund has a minimum initial investment of $3,000 and an expense ratio of 0.05%.
Vanguard Short-Term Corporate Index Admiral
If you want to invest in short term bonds to use your money in the next five years to buy a house, or if you plan to withdraw the money from your retirement account, then the Vanguard Short-Term Corporate Index Admiral fund (VSCSX) is for you.
This bond index fund tracks the performance of the Bloomberg Barclays U.S. 1-5 Year Corporate Bond Index.
While you shouldn’t expect a return of no more than 2 to 3% annually on this bond index fund, corporate bonds in general are safe, and this fund is pretty stable.
Because of this stability, this short-term bond index fund makes it an appropriate investment. The Vanguard Short-Term Corporate Index Admiral has an expense ratio of 0.07% expense and a minimum initial investment of $3000, making it one of the best Vanguard index funds around.
Vanguard High Dividend Yield ETF
The Vanguard High Dividend Yield ETF (VYM), as the name suggests, is a “dividend” fund. It attempts to track the performance of the FTSE High Dividend Yield Index.
This index ETF allows investors to earn dividend through growth companies. Some of the big companies with a strong record of paying dividends are AT&T, Intel, and Exxon Mobil.
As of 2/27/2020, this ETF has an expense ratio of 0.06%, making it one of the best Vanguard index funds for income. It starts at the price of one share.
So, if you’re looking for an index fund with the best long term investments growth potential, and you don’t mind the stock market volatility, this income-focused fund is appropriate for you.
Note that the Vanguard High Dividend Yield is also available as an Admiral share with a minimum investment of $3,000.
Vanguard Information Technology
Vanguard Information Technology Index Fund Admiral Shares (VITAX) is a sector fund. This investment attempts to track the performance of the MSCI US Investable Market/Information Technology 25/50.
Sector funds invest in stocks and/or bonds in specific industries. And the Vanguard Information Technology Index Fund, as the name suggests, focuses only on technology.
Generally, you should avoid sector funds mainly because they lack diversification. However, there is an exception with this Vanguard index fund. It focuses on technology, which makes it one of the best Vanguard funds.
In addition, this index is made up of stocks of large, mid-size, and small U.S. companies within the technology sector.
Nowadays, technology has shaped our daily lives. From computers, TVs, tablets, etc, everything is connected to the internet. Therefore, this means that there is and there will be continued growth in the years ahead.
The top companies included in this Vanguard fund are Apple, Microsoft, Visa, Adobe, PayPal, etc.
This index fund has an expense ratio of 0.10 %, but a minimum investment of $100,000. This can be high for the beginner investor.
However, this Vanguard index fund is available as an ETF, starting at the price of one share.
Vanguard Real Estate
The Vanguard Real Estate Index Fund Admiral Shares (VGSLX) is another sector fund. It focuses on real estate investment trusts (REITs), which are companies that buy office buildings, hotels and other real estate properties.
This Vanguard fund seeks to track the performance of the MSCI US Investable Market Real Estate 25/50 index.
Just as any other sector funds, this Vanguard real estate index fund may lack diversification. So, it makes sense to have this index fund in conjunction with another a more broadly diversified Vanguard fund.
Despite the lack of diversification, however, this fund distributes higher dividend income than other funds, allowing it to be among the best Vanguard index funds for income.
This Vanguard fund has an expense ratio of 0.12%. It has a minimum initial investment of $3,000.
Note that this Vanguard fund is also available as an ETF, starting at the price of one share.
Final tips for buying the best Vanguard index funds
In general, index funds are a good investment vehicle to use. So whether you’re looking to invest money for retirement, or you’re looking to add diversification to your investment portfolio, these Vanguard index funds are a great choice for you. They are great quality funds. They produce superior returns comparing to other similar funds.
Indeed, the best Vanguard Index funds will not only save you money in fees throughout the years. But also, these low-cost index mutual funds and exchange-traded funds (ETFs) will give you a wide exposure to different asset classes.
Speak with the Right Financial Advisor
If you have questions beyond knowing which of the best Vanguard index funds to invest, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
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