💰Money Mastery & Financial Literacy [Issue #20: Week 30, July 2023]
😲6 Steps to Buying Your First Home, 8 Easy Ways to Make Money Online, 6 Figure Jobs Without A College Degree, How to Send Your Child to College Debt-Free with a 529 Plan, Book of the Week and more!
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🎉In this issue of Money Mastery & Financial Literacy, you’ll learn:
This Week's 5 Money Lessons:
1) 6 Steps to Buying Your First Home
2) 8 Easy Ways to Make Money Online: The Easiest Online Side Hustles
3) Never Fall Victim to Credit Card Theft: How to Protect Yourself from Thieves and Scammers
4) 6 Figure Jobs Without A College Degree
5) How to Send Your Child to College Debt-Free with a 529 Plan
This Week's Premium Insights:
6) Finance Book Club: Book of the Week
7) Financial Tip of the Week
8) Finance Quote of the Week (and its deeper meaning)
9) Finance Chart of the Week (and its importance)
10) Finance Stat of the Week (and its significance)
11) Did You Know? ➕Before we start, please add this newsletter to your e-mail contacts to ensure that our emails never go to your spam folder!
1) 6 Steps to Buying Your First Home🏠
Buying your first home is a big decision, but it can be a great way to build equity. Being patient and avoiding a rushed process is important. Use experts like agents and inspectors to protect your interests. Know your budget and loan options before falling in love with a house. The keys are being informed, doing diligence, and understanding the process. Here is a step-by-step guide to help you get started:
Determine if you're ready to buy and evaluate your finances. Consider the total costs associated with homeownership. Make sure you have a stable income and a good credit score. You'll also need to have a down payment saved up.
Ensure you have a solid financial foundation before embarking on the homebuying journey.
Shop for a mortgage. Get pre-approved for a mortgage before you start shopping for homes. This will give you an idea of how much you can afford and make the home-buying process go more smoothly.
Understand the pros and cons of different mortgage types, down-payments, loan terms, and interest rates to make an informed decision.
Find a real estate agent and start looking at homes. A good real estate agent can help you find the right home for your needs and budget, and negotiate favorable terms. Once you've found a few homes that you're interested in, schedule showings with your real estate agent.
Be prepared to compromise. You may not find the perfect home right away. Be prepared to compromise on some things, such as the location, size, or price of the home.
Make an offer and negotiate the price. Once you've found a home that you love, make an offer to the seller. The seller may not accept your first offer, so be prepared to negotiate.
Prioritize a thorough home inspection. A home inspection will help you identify any potential problems with the property, before finalizing the purchase to avoid costly surprises.
Complete escrow and close on the home. Once you've agreed on a price and the home has passed inspection, you'll finalize all the paperwork and money transfers, to close on the home. Once you sign the final docs, the house is yours to own.
2) 8 Easy Ways to Make Money Online: The Easiest Online Side Hustles💰
The internet provides a wealth of opportunities to make money on your own schedule. With just a computer and internet access, you can find gigs matching your skills and interests. It allows income flexibility and the potential to earn extra cash or even full-time pay. Here are some of the best ways to make money online:
Virtual tutoring: If you have a talent for teaching, you can make money online by tutoring students from all over the world. There are many online tutoring platforms that connect tutors with students, such as Chegg, Tutor.com, and Skooli.
Website testing: Do you enjoy browsing the web? If so, you can make money by testing websites and providing feedback to the owners. This is a great way to earn some extra cash while also helping to improve the user experience of websites.
Design and sell t-shirts: If you are a creative person, you can design and sell t-shirts through Merch by Amazon. Amazon handles all of the printing and shipping, so you just need to create the designs.
Social media management: Social media is a powerful tool for businesses, but it can be time-consuming to manage. If you have experience with social media, you can make money by managing social media accounts for businesses.
Virtual assistant: Virtual assistants provide administrative and other support services to businesses from home. This is a great option if you're looking for a flexible and remote work arrangement.
Customer service representative: Many customer service positions can now be done from home. If you have good communication skills, you can make money by answering customer questions and resolving problems over the phone, email, or chat.
Transcriptionist: If you're a good listener and typist, you can make money by transcribing audio recordings. This is a great way to earn some extra cash while also working from home.
Sell your photos: If you're a photographer, you can sell your photos through stock photography websites. This is a great way to turn your photos into a passive income stream.
3) Never Fall Victim to Credit Card Theft: How to Protect Yourself from Thieves and Scammers💳
Credit card theft is a serious issue that can create serious consequences, including financial loss, identity theft, and the inconvenience of resolving fraudulent charges — which can lead to financial loss and inconvenience. It's important to take proactive steps to protect yourself from credit card theft.
This includes safeguarding your physical credit cards, recognizing card skimmers, protecting your credit card numbers at home, and keeping your cards safe online.
By following these precautions, you can reduce the risk of falling victim to credit card theft and ensure the security of your finances.
Additional Tips:
Regularly checking your credit card and banking statements can help you detect any unauthorized transactions and take immediate action
Using strong, unique passwords for your online financial services can help prevent theft
Being cautious about sharing credit card information over the phone and verifying the legitimacy of the caller can help protect against scams
Paying attention to warning signs of card skimmers, such as devices that stick out or jiggle, can help you avoid using compromised card scanners
Shredding any paperwork with your credit card number and other identifying information before throwing it away can prevent dumpster diving scams
Checking the email address and URL of websites requesting your credit card information can help you identify fraudulent emails and websites
Look for the https:// at the beginning of the website address and the lock icon in the browser bar.
Be careful about clicking on links in emails. If you're not sure if the email is legitimate, don't click on any links.
Be aware of phishing scams. Phishing emails often look like they're from legitimate companies, but they're actually trying to steal your personal information.
By taking proactive measures to protect yourself from credit card theft, you can minimize the risk of falling victim to scams and ensure the security of your financial information.
It is important to be observant and cautious in order to safeguard your finances and maintain peace of mind.
4) 6 Figure Jobs Without A College Degree💸
There are many great 6 figure jobs available without a college degree. If you're willing to put in the hard work, you can succeed in any of these fields. Some of the top options include:
Medical and health services manager: A medical and health services manager is responsible for the day-to-day operations of a hospital or other healthcare facility, they oversee hospital operations and staff. They need to have excellent leadership and communication skills, as well as a deep understanding of the healthcare industry.
Software engineer: Software engineers are responsible for the development, testing, and maintenance of software. They need to have strong programming skills, as well as an understanding of software design principles.
Web developer: Web developers create and maintain websites. They need to have strong programming skills, as well as an understanding of web design principles.
Real estate agent: Real estate agents help people buy and sell homes. They need to have strong communication and negotiation skills, as well as a knowledge of the local real estate market.
Commercial pilot: Commercial pilots fly planes for commercial airlines or other businesses carrying cargo. They need to have excellent flying skills, as well as a strong understanding of safety regulations.
Product manager: A product manager is responsible for the development and launch of new products. They need to have strong analytical and problem-solving skills, as well as an understanding of the market.
DevOps engineer: DevOps engineers are responsible for the integration of development and operations teams, and manage IT infrastructure and systems. They need to have strong programming skills, as well as an understanding of both development and operations processes.
If you don't have the skills that are required for the jobs you're interested in, you can take online courses or bootcamps to learn them. You can also build your skills by working on personal projects.
Networking is a great way to get your foot in the door. Attend industry events, connect with people on LinkedIn, and reach out to potential employers.
Don't give up if you don't get your dream job right away. Keep applying for jobs and networking, and eventually you'll find the right opportunity.
5) How to Send Your Child to College Debt-Free with a 529 Plan🎓
A 529 plan is a great way to save for college, and it offers tax benefits and flexibility. They offer tax-free growth and can be used to pay for tuition, fees, room and board, and other qualified expenses. By saving for college with a 529 plan, parents can help their children graduate debt-free and avoid the financial burden that comes with student loans. Saving for college is crucial to avoid decades of debt.
A 529 plan is a designated college savings plan where the money invested can be used for qualified expenses at any public or private institution. There are two ways to contribute to a 529 plan:
the prepaid tuition option
the investment plan
Money in a 529 plan can be used to cover tuition and fees, college room and board, and books. Money withdrawn from a 529 account is not taxed when they are withdrawn to pay for qualified education expenses. Many states also offer state tax deductions for contributions to 529 plans. 529 plans can also be transferred to another beneficiary if the original beneficiary does not go to college.
Additional Information:
Starting in 2024, funds leftover in a 529 plan can be transferred to a Roth IRA for the beneficiary
Grandparents can also open a 529 account naming your child the beneficiary
Money in a 529 plan can be used to repay a qualified education loan of as much as $10,000
Although 529 plans are state-sponsored, money invested in them can be used for qualified expenses at any public or private institution, regardless of where you set up the account or where the beneficiary attends school
🔒Premium Insights:
6) Finance Book of the Week📖
The Intelligent Investor by Benjamin Graham was published in 1949, and emphasizes the importance of value investing, which involves buying stocks that are undervalued by the market.
Graham's philosophy boils down to two main concepts - having a clear understanding of the difference between investment and speculation, and focusing on buying stocks trading below their intrinsic value to reduce risk and maximize returns.
Graham's investment philosophy is based on the idea that the stock market is inefficient. This means that stocks are not always priced accurately. As a result, there are opportunities for investors to buy stocks that are undervalued and sell stocks that are overvalued.
In simple terms, Graham advocates a patient, disciplined approach to stock selection based on analyzing hard financial data rather than trying to predict market psychology or trade short-term fluctuations. His mantra of "margin of safety" means only buying when the stock price is significantly below what the company is truly worth.
One of the most important lessons is the importance of diversification. Graham argues that investors should not put all of their eggs in one basket. Instead, they should spread their risk by investing in a variety of different stocks.
Another important lesson from the book is the importance of patience. Graham believes that investors should not try to time the market. Instead, they should focus on buying stocks that are undervalued and holding them for the long term.
Some key insights from the book:
Tune out the market noise and short-term hype. Focus on a company's fundamentals.
Always invest with a margin of safety. Don't pay full price for a stock, buy below intrinsic value.
Have a clear distinction between investor and speculator mindsets. Speculation relies on guesses and forecasts.
Diversify across different stocks and asset classes to minimize risks. Don't put all eggs in one basket.
Ignore sentiment and stick resolutely to your strategy through ups and downs. Have conviction in your approach.
Be willing to admit when you're wrong and sell losers to protect capital for better opportunities. Don't get emotionally attached.
Review and rebalance portfolio allocations periodically as company outlooks change over time. Stay active and alert.
Graham's value investing approach is still relevant today. In fact, many of the world's most successful investors, such as Warren Buffett, have been influenced by Graham's teachings.
7) Financial Tip of the Week🎯
New to investing? An S&P 500 index fund is the simplest start.
The S&P 500 index is a great starting point for new investors. It tracks 500 of the largest US companies, so it provides very broad market exposure. Here's why it works well for first-time investors:
Long track record of solid returns - Avg 11% annually since 1928.
Diversification in one fund - 500 big-name stocks across sectors.
Low-cost index fund options - Avoid high fees of active trading.
Historically recovers from downturns - Bear markets always rebound.
Investing in top US blue chips - As the US economy expands, so does the index.
Can be held in retirement accounts like Roth IRAs - Tax-advantaged.
The S&P 500 gives beginners a stable, diversified core holding that captures the growth potential of public companies. It's a simple, low-stress way to get started in the stock market.
While past performance doesn't guarantee future returns, the S&P 500 has consistently rewarded long-term buy-and-hold investors. It provides a solid foundation for investors just starting out.
It’s important to remember that the S&P 500 is not a get-rich-quick scheme. It takes time to build wealth through long-term investing, and there will be ups and downs along the way. However, if you are patient and disciplined, you can retire with a million-dollar investment portfolio.
8) Finance Quote of the Week 🧠
“Don’t look for the needle in the haystack, just buy the haystack.”
—Jack Bogle
My take: This quote by Jack Bogle, the founder of Vanguard, is a simple but powerful reminder that it is often better to invest in a diversified portfolio of assets than to try to pick individual stocks.
Bogle uses the metaphor of a haystack and a needle to represent the stock market and individual stocks. His message is that investing in individual stocks and trying to find the few "needles" that will outperform is largely futile and not a winning strategy long-term. The haystack represents buying the whole stock market through broad index funds that track major market benchmarks like the S&P 500.
Bogle argues that trying to find the "needle in the haystack" of individual investments is a fool's errand, as it is very difficult to consistently outperform the market. Instead, he suggests that investors should focus on buying a broad basket of assets, such as an index fund. This approach will help to reduce risk and volatility, while still providing the potential for long-term growth.
Bogle's quote is based on the idea that the stock market is efficient. This means that the prices of stocks already reflect all of the available information about those stocks. As a result, it is very difficult to consistently find stocks that are undervalued. In fact, studies have shown that even professional investors are unable to beat the market on a consistent basis.
Bogle wisely advised everyday investors to take emotions out of investing and simply buy the entire market through low-cost index funds. Bogle's quote is a reminder that it is often better to keep things simple when it comes to investing.
9) Finance Chart of the Week📊
Personal savings are down $5.5 trillion since April 2020 in the US:
This alarming trend signals that many households are struggling financially. Americans have less money to weather economic storms, and it could lead to a decline in consumer spending, which would hurt the economy.
10) Finance Stat of the Week📊
This week, the Fed raised interest rates again, by 0.25% to a 22-year high (the 11th increase since March 2022). Borrowing costs are now at their highest levels since 2001.
The Fed is aggressively raising rates to slow down the economy to prevent inflation from rising too quickly. But the rapid increases are also driving up borrowing costs for consumers and businesses to painful levels not seen in over two decades.
11) Did You know? 🧠
Walmart ($WMT), Costco ($COST), and McDonald's ($MCD) are three of the biggest retailers in the world. They sell millions of products each year, but when it comes to top-selling products, the winners may surprise you:
At Walmart, the best-selling product is bananas. Walmart sells more than a billion bananas each year.
Costco's top seller is toilet paper. Costco sells more than a billion rolls of toilet paper per year.
McDonald's best-selling product is fries. McDonald's sells an estimated 9 million pounds of fries each day.
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