Why Real Estate is the Best Investment You Can Make

Why Real Estate is the Best Investment You Can Make

Do you think Real Estate is the Best Investment? Real estate is often dubbed as the best investment you can make in your life no matter where you are in the world. While stocks, gold, bonds, mutual funds, and savings accounts are all great, nothing beats the strong emotional satisfaction of land ownership.

As experts predict that the demand for land will continue to increase in the coming years, here are some of the top reasons to convince you to start with real estate investment soon:

Less Volatile with Good Returns

Almost all assets with good returns tend to be risky or volatile. On the other hand, an asset that is not risky or volatile doesn’t offer good returns.

Real estate is a great middle-ground for this. Real estate risk reduces when you continue to hold on to your property. Once the market begins to improve, the value of the property will also improve and you will build equity as a result.

Real estate also gives you better control over a tangible asset that you can profit from with different revenue streams.

Safe and Secure Investment

This alone is more than enough reason to consider investing in real estate. In this world filled with uncertainties, it can be a blessing to invest in a safe asset. With real estate investment, the property will secure itself.

It is very rare for your investment to lose value and if ever it happens, it will just be for a short time. Your property won’t lose value due to inflation each year either. It can even outperform treacherous inflation waves.

Diversified Portfolio

By this time, you might have learned how important it is to diversify your portfolio. if your portfolio is diversified, you will spread the risk of investments on different classes of assets.

In this case, real estate will serve as a tangible asset you can use for mitigating risks from your portfolio. Many landlords were able to make a fortune just by investing in real estate alone.

Real Estate Prices Can Appreciate in Several Ways

With real estate, your asset’s value will not only appreciate because it can even force appreciation. Natural appreciation typically takes place once the market values get better. Forced appreciation refers to the equity you will earn if you put in money.

New window installation, garage renovation, or roof repair can all increase your property’s selling price. It happens because the moment you renovate the property, you can also increase the rent and as a result, it will increase the home’s value.

Pass It Down to Future Generations

With real estate, you won’t just transfer a tangible asset to your next of kin because the transfer itself is also very easy. Some owners of developed real estate properties pass these down to their children and other beneficiaries, helping them defer some taxes.

Real estate truly the best investment is you can make because it is safe and yields high returns. Do it right and you can even retire sooner than expected!

 

 

Why is Airbnb Prohibited in Some Areas?

Why is Airbnb Prohibited in Some Areas?

Airbnb is now the number one go-to platform for travelers who prefer more personalized stays during their trips. Whether it is a cozy apartment unit that boasts an ambiance reminiscent of home that hotels can never offer, or a once in a lifetime experience like staying in a tree house or even a castle, travelers can now choose from a myriad of exciting choices for the most unforgettable stay. Further in this article, we are going to discuss the reasons why Airbnb Prohibited in some areas.

However, some areas don’t favor the popularity of Airbnb because they are trying to fight off over-tourism and have a hard time adapting to the ever-changing hospitality industry. While several local governments already started to crack down on what was once a relatively free market, increasing taxes for guests and hosts alike and limiting listings, others have completely forbidden AirBnB, implying no place is safe from more restraining regulations.

Why Airbnb is Restricted or Illegal in Some Areas

Some areas have put restrictions or outlawed hosting Airbnb for different reasons. The first one is that Airbnb can take away the tax revenues typically paid to lodgers, even though Airbnb is now working with their local governments to collect these taxes.

AirBnBs can also take away business from traditional bed and breakfasts and hotels. Other areas also argue that AirBnBs are not regulated the same way that hotels are, which means these might not meet the necessary health and safety protocols.

There are also complaints about short-term guests disrespecting common places in multi-dwelling buildings, bothering residents, and creating noise.

Areas with Strict Regulations on AirBnBs

Below are some places with strict regulations when it comes to AirBnbs:

  • Amsterdam

Airbnb hosts in Amsterdam are required to obtain a permit for a vacation and registration. Strict rules are also in place on how to operate properties with stiff fines for violations.

  • Barcelona

Barcelona has a tough stance when it comes to Airbnb and other similar platforms. It instructed the removal of 2.577 listings that operate without a license approved by the city or else, the site will face some substantial fines.

  • Berlin

Owner occupiers are allowed to rent out their primary residences without time restrictions as long as they obtain a permit from the city officials. They can also rent out their second homes every year for a maximum of 90 days.

  • London

London homeowners can rent out their spare rooms, flats, or house for a maximum of three months annually. Those who live outside the Greater London area can rent their secondary or primary properties for a maximum of 140 days per year.

  • New York

New York passed laws that make renting illegal in New York City for less than 30 days if the host is not present. It means that room shares, apartment shares, and home shares are allowed by those who want to follow the law and book an entire unit should stay for over 30 days.

While Airbnb does offer convenience and a sense of being in a home away from home, not all areas think the same. Always do your research first before you book your next stay.

 

Why Do Americans Still Live Paycheck to Paycheck?

Why Do Americans Still Live Paycheck to Paycheck?

Are you still living paycheck to paycheck even if you are earning a good salary? If yes, then, you are not alone.

Surveys revealed that a staggering 34% of Americans today don’t have any savings, while 69% only have $1,000 set aside for emergencies.

Why do Americans still live paycheck to paycheck, then? Here are the most common reasons why many Americans still suffer from a broken budget:

They Don’t Pay Their Bills on Time

Yes, many Americans don’t pay their bills on time. Sadly, it will cost you more down the road if you don’t pay your bills right on schedule.

Paying your bills after their due date will lead to additional fees and surcharges, not to mention that it can also affect your credit over time. It means that your future loans may incur a higher interest rate as a result. It also means you will shell out more for your mortgage payment or car loan.

Once you receive your bills, make sure you pay them right away. Automatic payments can also be set up so that the money will come out of your account before its due date.

They Don’t Pay the Minimum on Their Debts

Every time you prepare your monthly budget, you might be tempted to reduce your debt payments in the hopes of getting extra cash for future expenses. But this decision will only make you spend more on interest payments and harm your credit score at the same time.

Paying more than your minimum balance can help you save more money and get out of your debt much faster than doing otherwise.

They Try to Keep Up with Other People  

Unfortunately, a lot of Americans are still living paycheck to paycheck because they are too busy trying to keep up with the Joneses. They buy the latest smartphones, the flashiest cars, and the most luxurious designer clothes, all in an attempt to show that they can also do what others do. But doing so can harm your finances. Instead of keeping up with others, try to live within your means.

They Don’t Have a Budget

Do you have a budget in place? Do you calculate the amount you have allotted for food, housing, personal expenses, and transportation as well as for your emergency fund and college savings? if you don’t have a budget and a financial plan, it would be impossible to stay out of debt or build up your debt.

They Have Impulsive Expenses

With all those sparkling displays in malls, it can be very enticing to grab something even if you don’t even need it. From sales promos to markdowns and discounts, you might feel tempted to make an unnecessary purchase.

But buying something you don’t need just because it is on sale doesn’t help you save money. Instead, it will only make you spend your cash on something unimportant. Try to refrain from these impulsive buys and save money instead for future and more important purchases.

Living paycheck to paycheck may still be rampant among Americans but hopefully, a day will come when this trend comes to an end once and for all.

 

 

 

 

Why Daytrading is Not a Good Way to Make Money

Why Daytrading is Not a Good Way to Make Money

Daytrading has been one of the hottest buzzwords in the trading world lately. Some people tout it as the best way to make money fast, while others recount how they became a victim of this form of speculative investing.

If you are planning to embark on day trading, you might want to give it a second thought. Day trading is no easy business. It isn’t something you do just for fun, especially if you are trading leveraged products or using leveraged strategies for investment.

Here are the top reasons why daytrading is not a good way to make money:

Day Trading Can Get Addictive

Yes, day trading tends to become addictive. You will constantly look for the next stock you can trade in. It may even end up overtaking your life if you aren’t too careful. Learning when to draw the line and walking away from the market occasionally is necessary to avoid negative consequences.

Day Trading Can Make You Lose Money Fast

Using stop-loss orders is one of the most important day trading rules to serve as your protection from losses. Day traders often follow this piece of advice religiously when starting. However, once they become more comfortable, they become careless.

This is why many day traders often suffer significant financial losses at a certain point. Good thing that it is usually a strong enough wakeup call to make them start using stop loss orders all over again.

Day Trading Can Make Your Emotions Run High

Only a few things can compare to the adrenaline rush you feel when day trading. The thrill of placing and making a profit out of a trade on short-term price movements is almost the same as the rush you feel during extreme sports activities.

But while this is such a great feeling, it can also make you more prone to losses. You might end up staying in a trade for a long time or overthinking because of a flawed analysis. Worse is when your gut feeling tells you that something will happen but your brain pushes you to sell to cut your losses.

For this reason, traders should always keep their emotions in check when trading.

Day Trading is Time Consuming

Day trading requires lots of focus, not to mention that it is intensive and stressful. Since the stock market moves so fast, you need to keep a close eye on your open positions if you have any. It can spell serious disaster if you walk away even for a minute. Although you don’t need to monitor the market if you have no open positions, you need to stay on top of everything if you have.

Day Trading Requires Lots of Money to Begin

Many day traders can get started even without a large sum of money. But if you want to meet a specific guideline called the pattern day trading rule, at least $25,000 as an investment is required.

The rule that is often called PDT says that need $25,000 if you make four trades or more within five days and the trades consist of over 6% of the trades you have in your account.

Day trading isn’t a simple walk in the park, which makes it not the best way to make money.

 

When to Start a 529 for Your Child

When to Start a 529 for Your Child

Planning for their children’s future is and should always be the top priority of all parents. Having enough savings in place is enough to secure the future education costs of your child. Later in this article, we will discuss when to start a 529 for your child.

But many parents often find themselves wondering when they should begin saving for their children’s future. The simple and short answer on when to start a 529 for your child is as soon as possible.

Continue reading below to learn more about saving for your child’s educational needs:

When Can You Begin a College Fund for Your Child?

The truth is that you can start a 529 or begin saving for the college expenses of your child at any given time. But before you do so, there are still a few things you need to keep in mind.

For starters, these accounts must have a beneficiary who will be using them. You will need the Social Security number of your child for them to be named as the beneficiary of the account. You can expect to get the child’s SSN about a couple of weeks after you give birth. Once you have the number, you can already set up an account for college savings under your child’s name.

There is another good time to start, and that is even before the birth of your child. With 529 plans, it would be easy and simple to change the beneficiary. It means that you can set up a savings account listing yourself as the beneficiary and change it later on after your child is born.

529 Plans and Other Ways to Save for College

You can choose from different methods of saving for your child’s college education. For instance, a lot of parents simply opt to save some cash in a checking account or regular savings account. Other parents invest for college with a brokerage account with plans to withdraw funds and sell investments once the time comes.

But you can enjoy more benefits if you use college-specific savings and other similar tax-advantaged ways. These include the following:

  • 529 Savings Plans

Every state administers 529 savings plans that have the same structure as 401(k) accounts when it comes to investment selection. In general, you can choose from one or two dozen investment funds. You can also choose age-based portfolio options.

As far as tax is concerned, 529 savings plan contributions are not deductible from your federal tax return but might be deductible from state taxes. But all withdrawals qualified for education expenditures are completely tax-free regardless of the state of your investments.

  • Coverdell ESA

Coverdell ESA or Education Savings Accounts are brokerage accounts that let investors invest their college savings in almost any bonds, funds, or stocks they want. These accounts also have the same tax structure as that of the 529 savings plan with tax-free qualified withdrawals.

  • Roth IRAs

Roth IRAs are also often used for college savings, sharing the same basic tax structure as the first two methods above. College expenses are also allowed exemption to the early withdrawal penalty of the IRS.

Start a 529 for your child as soon as possible to secure a brighter future for them.

 

What is Cash Flow and Why is It Important?

What is Cash Flow and Why is It Important?

 

If you have a start-up or small-scale business, your profit is probably on top of your mind. While there is nothing wrong with this kind of mindset, especially because the reason why you started with the venture is to make money, there is one more thing that you should never overlook. This is none other than cash flow.

Cash is the lifeline of any business, regardless of size, type, and niche. Without cash, your business gears won’t turn and you won’t see any growth either. This is why it is a must to have a good cash balance if you want things to keep moving.

The easiest way to ensure that cash keeps coming in is to know what cash flow is all about. The thing about cash flow is that it can be both positive and negative. Cash can flow in and out of your business. Following the right procedures and processes will guarantee that your business always remains on the positive side of things. Continue reading below to know what cash flow is and why it is important.

Cash Flow Defined

Cash flow refers to the decrease or increase of money in businesses, institutions, and individuals. Cash flow in the financial world, however, has a narrower definition. Cash flow in finance describes the amount of consumed or generated cash within a specific timeframe. This period is often similar to the accounting period.

There are several different types of cash flow and it can also be varied. The secret behind the success of a business is the ability to use several cash flows for financial analysis. Of course, it is the ultimate goal of any financial data or documentation in business.

Importance of Cash Flow

Cash flow is extremely critical to all businesses. It rings truer to small businesses. The following are the top reasons why cash flow is important to a small business:

  • Expansion

You will know right away where expansion is possible if you keep an eye on your cash. Although expansion is a significant expense, it can also increase your cash flow. If you have a strong enough cash flow to allow for expansion, it would be safe to do so. But you should avoid it if your cash flow isn’t confidently strong to avoid overextending your business.

  • Expense Management

You can have more effective expense management if you can see where your cash flows.  No business owner likes the thought of hemorrhaging cash. Even the strongest businesses can bleed dry because of it. Overspending and underperforming are a big no-no. Understanding cash flows will make it easier to manage expenses.

 

 

 

  • Generating Investments

Businesses with strong cash flows attract more investors. If you want to have more people investing in your business, you have to be familiar with your cash flow. Investors look for businesses that are well-versed in how they spend and make money.

  • Decision-Making and Planning

You can plan for your business better if you understand how your cash flows. If you have no idea where you generate cash, you can never plan accordingly. With a precise statement of cash flow, you will know where your financial standing is right away.

If you don’t want your business to remain stagnant, pay attention to your cash flow and keep it going strong.

 

Rent Control: What It Is and How To Get It

Rent Control: What It Is and How To Get It

Are you familiar with rent control? If yes, chances are you are interested in it, even more so if you are currently looking for a new apartment.

Rent control limits the amount of money a landlord can charge a tenant. It might sound too good to be true on paper but it is real. Continue reading to know what rent control is all about and how to get it.

What is Rent Control?

Rent control happens when a governmental body puts a limit on how much property owners can charge in rent. The rent will cap out at a specific amount with the help of rent control, and whatever happens, the landlord won’t be able to ask for anything higher than this.

Tenants living in rent-controlled properties can also take advantage of unique protections against eviction because they can continue to live in the apartment for an indefinite period.

Unfortunately, it is not that easy to come by rent-controlled apartments. The truth is that only a few states in the United States have laws on rent control in place. These are California, Washington, D.C., New York, New Jersey, and Maryland.

New York City, Los Angeles, San Francisco, and Oakland are the largest cities with rent control laws. Rent control is completely prohibited in 37 US states. However, units are still dwindling even in areas with existing rent control laws.

For instance, once long-term tenants age out of their New York apartments, landlords can easily transfer the units to policies on rent stabilization or take them out of rent regulation outright. As such, it would be safe to say that most apartments under rent control have been and will even continue to be phased out.

Conditions and rules may differ from one city to another. For instance, if you are researching New York City and its rent control laws, you have to refer to the ORA or Office of Rent Administration. You can also consult the Department of Housing and Community Development if you are in Washington, D.C.

How to Get and Live in Rent-Controlled Properties

The truth is that it is almost impossible to move into rent-controlled apartments. If you are in New York, you are required to live with a relative in an already existing rent-controlled apartment. You can only claim the lease if this relative decides to move out or passes out.

Instead, it will be a more realistic goal to look for a rent-stabilized unit. To do this, you will need to go through the lists of these rent-stabilized properties. For example, New York has PDFs of the rent-stabilized buildings found in each borough. They also have a tool that will allow you to check if a specific address is stabilized.

If you are serious about keeping updated with the available vacancies, you can still squeeze your way into a good rent-stabilized unit.

Rent control may sound enticing but it is easier said than done. Always do your research to find a property that will have the rent under control.

Is Forex a Good Way to Make Money?

Is Forex a Good Way to Make Money?

Different factors in the global economy have tremendous effects on the currencies of the world, resulting in dramatic changes and movements in exchange rates. This is why more and more investors are now turning to forex in the hopes of earning some profits on the side. Let’s discuss more Is Forex a Good Way to Make Money?

But the million-dollar question now is, is forex a good way to make money?

Although currency pairs are less volatile than other stocks, seasoned forex traders can take advantage of the available higher leverage and combine it with proper market analysis to enjoy more trading profits.

If you want to improve your chances of making money from forex trading, there are a few steps you can take to become a profitable trader.

Be Familiar with Forex Basics

The first and most important step to making money with forex is to learn and familiarize yourself with its foundational and basic concepts. The basics of forex include terms such as leverage, pips, limit orders, spread, take profit, stop loss, and others.

Thankfully, there are several resources to help you, some of which can be used for free. You can refer to YouTube videos, video lessons, eBooks, and free or paid membership courses and programs.

Choose a Profitable Strategy

After learning more about the trading basics, it is time to find a strategy that lets you generate consistent profits. It means the strategy should have both losing and winning trades, with enough wins to mitigate any losses.

Picking a profitable strategy that will give you an edge and ensure the growth of your trading capital over time provided that you keep your emotions in check and stick to your rules. Backtesting is a great way to test your strategy using previous price data to identify its profit potential and win rate.

Keep Your Emotions in Check

After you pick your strategy and learn how to analyze the charts, it is time to master and understand your psychology in trading. Trading psychology pertains to emotional components of trading, including your beliefs and thoughts about the following:

  • Loss and wins
  • Money management
  • Risk management
  • Nature of technical analysis
  • Trading plans

Nurturing healthy trading psychology will help you grow above and beyond the negative effects of emotional trading decisions due to fear and greed. Keeping your emotions under control will also help you stick to your trading plan and use your trading strategy to your advantage. To hone your trading psychology, try to identify your risk before you enter each trade.

Practice Regularly

No person can be considered a master of trading. It is important to continue to learn and practice to further fine-tune and refine your strategy in the long run. You can practice by executing trades and backtesting on your chosen trading platform. It will help you recognize trade setups in live market conditions with ease.

Execute Trades

Now that you know how to manage your emotions and learn how to trade, it is now time to start executing trades on your preferred brokerage platform.

Forex can help you make money as long as you are serious about what you are doing and you follow the steps above.

 

Investment Rules When Remodeling a Rental Property

Investment Rules When Remodeling a Rental Property

Rental properties are now on the rise, and if you are a property manager or owner, you might be planning to remodel it to gain a competitive edge and attract the best tenants. Later in this article, we are going to discuss investment rules when remodeling a rental property.

Whether you want a major renovation or just a simple upgrade, there are several important investment rules to remember when remodeling a rental property to help you save money and maximize your ROI.

Prioritize the Essentials

This might sound a bit boring but your first focus should be taking care of the essential maintenance, upkeep, replacement, and repair needs of the property. It includes taking care of the property’s plumbing, roofing, structure, drainage, HVAC systems, and electrical wiring.

Even a minor issue with these areas might result in serious headaches and major expenses not only for you but even for your tenants in the long run.

A proactive property owner can prevent substantial future costs if you invest in your property at the moment. The good news is that you can claim household repairs on your rental property as tax deductions. The only exception is if you carry out the repairs when there is a more extensive renovation project underway.

Repairs are a type of project that doesn’t materially add to property value or significantly prolong its life. Repairs can keep the property in great operating condition. Good examples of repairs include exterior or interior painting projects, fixing a broken toilet, replacing damaged windows, and repairing broken pipes.

Remodeling or improvement efforts and repairs on your rental property are all considered tax deductible as long as you got the right records in place.

Maximize Your ROI

After tackling the upkeep needs of your property, you can now make the necessary upgrades. A remodeling project for your rental property should do the following:

  • Increase your monthly charge for the property.
  • Increase the property’s overall value which will also increase your return once you sell it.

The easiest way to achieve these two goals is to complete a remodel of the bathrooms and kitchen of your rental property. Most potential renters and buyers prefer a modern and updated kitchen. Your property will surely attract long-term renters if you fit it with new appliances, countertops, cabinets, and floors.

A master with a new vanity and shower can also be one major selling point for your rental property. If you plan to upgrade appliances, don’t forget to add an Appliance Repair Addendum to your lease agreement.

To get the best out of investment for your property’s bathrooms and kitchen and get a tax reduction for it, here are some things you should do:

  • Find a good middle ground.
  • Avoid complete teardown.
  • Consider smaller and cheaper upgrades.
  • Don’t throw away your receipts.

Set Limitations and Scope for the Remodel

Most property owners find it challenging to keep their remodeling project within the limits of their budget. It is recommended to have an initial scope for your project and proceed with the remodel with a good understanding of the things you hope to get out of it.

Rental property renovations should never be an expensive splurge nor should sthey be a labor of love. Always determine your ROI and the benefits you will gain from every remodeling project.

How to Save Money in These Inflationary Times

How to Save Money in These Inflationary Times

Inflation rates in different countries have been seeing a staggering increase for the past few months. Unfortunately, a growing inflation rate will mean your money’s buying power will be weaker and lower than how it was several years back. So How to Save Money in These Inflationary Times? Here is the answer.

With the current situation of the worldwide economy, you might be wondering if it is the best time for you to save money. Well, the good news is yes, it is. If you let your money sit idly in your bank account or stash some cash under your mattress for longer, you will be losing more to inflation with every passing day.

How do you offset inflation’s negative effects on your wallet to help you achieve your financial goals? Here are a few tips on how to save money in these inflationary times:

  1. Build Your Emergency Fund

One of the best ways to avoid bad financial situations every time surprise expenses occur is to build an emergency fund. Imagine your electricity or insurance bill going up all of a sudden but you didn’t consider it when budgeting. Inflationary times mean these situations may happen more often.

To build a financial buffer, allocate a specific amount of money monthly. Your emergency fund must cover a minimum of three months’ expenses. The size of this fund will also depend on your present life situation.

  1. Continue with Your Investments

It is a good thing if you already have existing investments, whether in property or bonds. But the inflationary times shouldn’t make you halt your investing.

Think of new investment methods but make sure you calculate your return on investment necessary to offset the negative effect of inflation at least reasonably.

Always consider your ROI and never invest in something that will only lose its initial value after some time, like investing in an apartment renovation or getting a brand-new car.

  1. Increase Your Earnings

The best way to save more money in these inflationary times is to try to earn more. Sadly, it might be easier said than done. Thankfully, you don’t need to spend a long time to improve your qualifications just so you can increase your monthly savings.

Here are a few ideas to help you get extra income to allot more money for investment or emergency funds:

  • Look for side gigs such as consulting, pet-sitting, tutoring, and others.
  • Sell stuff that you no longer use on online portals.
  • Talk to your employer if it is possible to make adjustments to your salary according to the current inflation rate.

 

  1. Cut Down on Your Expenses

According to experts, you only need to change two things if you want to save more money, and these are your earnings and expenses. While earning more might take some time and effort on your part, cutting down your spending will make you see results faster.

To spend less without affecting your living standards, try to prepare an Excel sheet and list down all your bank accounts and the financial information in each one. The idea here is to know the main categories of your expenses and determine where most of your budget goes. Think of the services or products where you can cut your expenses, such as:

  • Bills
  • Clothes
  • Eating out
  • Internet
  • Monthly subscriptions

Use these tips and save more money even in times of high inflation rates.