Category Archives: financial

Outdated Money Advice – 12 Financial Assumptions You Should Reconsider

What was true 30 years ago isn’t necessarily true today. Few people would agree that cassette tapes produce the best possible sound or legwarmers are the height of fashion. And like technology, fashion, cultural values, and just about everything else in life, financial wisdom changes over time.

We all carry around certain financial assumptions we learned from our parents, our mentors, or that we read somewhere once upon a time. But those assumptions may no longer be true — or at least, not unquestionably true.

Here are 12 financial assumptions that are more nuanced than old-school conventional wisdom suggests, along with tips to know what’s right for your unique finances and goals.

1. More Education Is Better

Higher Education Cap Key To Success

Today’s Truth: More education is sometimes better, depending on your dream job and career path.

A college degree opens doors, and some careers require a master’s or other advanced degree. But higher education isn’t for everyone, and attaining more degrees don’t always make financial sense.

Student loan debt is now the second-highest form of debt in the United States after mortgage debt. It has surpassed both auto loan debt and credit card debt, with over $1.52 trillion owed in 2018, according to Forbes. That comes out to an average of $37,172 per graduating student. It’s a financial epidemic.

Young adults who don’t know what they want to do with their lives should consider taking a gap year before enrolling in college, picking a major, and trying to figure out how to pay for a college degree. College has become outrageously expensive; the average cost of one year’s tuition and fees at a private college for the 2018 to 2019 school year is $35,676, per data from U.S. News & World Report. Even if that cost stays frozen for the next four years — which it won’t — that would come to $142,704 over four years.

And while a college degree is useful across many fields, master’s and other advanced degrees are not. They are a very specific means to an end. My wife wanted to be a school counselor, for example, so she earned the requisite master’s degree in school counseling. Young adults should pursue advanced degrees only when they know what they want to do for a living and an advanced degree specifically helps on that career path.

Before deciding on an education path, do plenty of soul-searching. Then go about finding ways to reduce or avoid student loan debt entirely.

2. You Should Pay Off Your Student Loans Before Buying a Home

Student Loans Coins Stacked Home Mortgage Expensive Balancing

Today’s Truth: The decision to buy a home depends on your market, finances, and plans, not one single factor like student loan debt.

Total student loan debt has doubled over the last decade, while homeownership rates among young adults have plummeted. In 2004, the homeownership rate for adults under 35 sat at 43.6%. That fell to 34.3% by 2017, although it has risen slightly since. With so much student loan debt, it can be difficult for young adults to qualify for a mortgage. In addition to skewing debt-to-income ratios, student loans impact borrowers’ credit scores.

There are plenty of good reasons to rent (more on those shortly), but if your only reason is student loans, start running the numbers. Over time, homeownership can not only save you money on your monthly housing payment, but it can also help you build wealth. Look no further than a 2018 Harvard study that found that middle-aged homeowners have an average net worth 60 times higher than middle-aged renters.

It sometimes makes more sense to put money toward a down payment rather than paying off existing debts. After buying a home, you can always decide whether to pay off your student loans or mortgage first, or you can pay off neither right away and instead invest money elsewhere.

There’s no one-size-fits-all answer for the best place to put your money, just as there’s no one-size-fits-all answer to whether you should buy or rent a home.

3. Buying Is Always Better Than Renting

Rent Or Buy House Home Pink Blue

Today’s Truth: Buying sometimes often makes more financial sense, but it depends on a wide range of factors.

When you buy a home, you take an initial loss. That’s because buyers and sellers alike spend thousands of dollars on closing costs, including lender fees, title fees, real estate agent fees, and transfer taxes.

Over time, homeowners typically save money compared to renters, in the form of lower monthly payments, home appreciation, and gradually shrinking mortgage balances. But the process takes years, and how many years it takes depends on factors such as local market home values, rents, interest rates, and repair costs. That means that homeownership usually makes sense only for people who plan to stay in one home for at least a few years.

Further, homeownership sometimes involves unexpected costs. The roof needs to be replaced, or the furnace, or the wiring. You wake up to a normal day, and by lunchtime, you have a $5,000 bill you need to pay immediately. Beyond location stability and staying put for a while, homeowners also need financial stability. They need a much larger emergency fund than the average renter to cover sudden and unexpected home-related costs.

Before you rush into homeownership on the assumption that it’s the right financial move, read up on renting versus buying a home and the nuanced factors that go into the decision.

The assumption that “buying is better” doesn’t only apply to housing; it also extends to nearly everything in our lives. In most cases, it makes far more sense to rent high-end items you only plan to use once or twice, such as a wedding dress or high-end jewelry. If you want to swap out your car every two years, it often makes more sense to lease than to buy. Renting is sometimes better than buying, and anyone who tells you otherwise is selling something.

4. Your Home Is an Investment

House Expense Or Investment Grass Outdoors Dollar

Today’s Truth: Your home is an expense, and you should treat it accordingly.

A rental property is an investment because you buy it to generate cash flow and a return. A primary residence is an expense; it costs you money every month on the “Housing” line in your budget. Any equity you might have in it exists only on paper and is not investable to generate income or additional wealth.

Homeowners justify spending extra on a home — when both buying and renovating — by reassuring themselves, “I’m not spending this money; I’m investing it!” But this assumption is self-indulgent and self-deluding.

Consider Remodeling Magazine’s 2019 report on the average return on investment for common home improvements. They measure ROI as the percentage of a renovation’s cost that’s recovered through a higher home sale price. In their 2019 report, exactly zero home improvements delivered a positive ROI; every single one cost more than it returned in higher values.

The more you spend on housing, the less you can funnel into true investments, such as stocks, bonds, and real estate investment. Unless you house hack or do a live-in house flip, housing is an expense, not an investment.

5. You Should Spend 25% – 30% of Your Income on Housing

Household Living Expense Budget Calculator

Today’s Truth: Spending less is better for your long-term wealth, but some markets require more. When deciding what to spend on housing, remember that budgeting is a zero-sum game.

In an ideal scenario, you’d spend 0% of your income on housing by either house hacking or taking a job that provides free housing. However, reality is rarely ideal.

In some wildly expensive markets like San Francisco and Manhattan, single renters may not be able to find even a room for less than 50% of their net income. Housing costs are a problem for younger adults especially; USA Today reports that today’s 30-year-olds have spent an average of 45% of their total lifetime income on rent.

What people so often ignore about budgeting is that it’s a zero-sum game. If you spend more on housing, you have less to spend on transportation, food, entertainment, clothes, and investing to build wealth. That makes housing part of a larger lifestyle equation. A Manhattanite who spends 50% of their income on rent likely forgoes a car, so instead of spending $9,576 a year on transportation like the average American, they may spend $200 on public transportation.

I spend almost nothing on housing, but I spend a lot more than the average American on travel. There’s no magical percentage to spend on housing, so instead, look at your budget holistically, set your savings rate first, and then work backward to create a budget based on your priorities.

6. You Should Put at Least 20% Down on a Home

Down Payment Calculator House

Today’s Truth: Your money may serve you better elsewhere, and delaying homeownership to save a higher down payment is often counterproductive.

There’s a valid reason for the recommended 20% threshold for a down payment down on a house: If you put down at least 20%, you can avoid paying private mortgage insurance (PMI), which is effectively lost money. And in the case of FHA loans, that mortgage insurance doesn’t go away, even after you pay the principal balance down to below 80% of the property’s value.

But as irksome and wasteful as PMI is, sometimes it makes sense to just suck it up and make a smaller down payment.

First, if it would take you another four years of saving money to put together a 20% down payment, but you have enough for a smaller down payment now, it seems silly to sit by and wait when you’re ready to enter the housing market. Besides, there’s no telling what home prices will be in four years from now. What if you scrimp and save more money, only to find that home prices are 14% higher by then, and you still don’t have enough money?

Second, as mentioned earlier, your home is not an investment. Cash that you put into it is cash that can’t be invested in stocks, bonds, or investment real estate, which can produce passive income for you. Let’s say you invest an extra $50,000 in a down payment to reach the 20% threshold and avoid $2,000 a year in PMI and extra interest. At an 8% annual return, that $50,000 would have earned you $4,000 a year if you’d invested it elsewhere. So you save $2,000 a year on your mortgage, but at the cost of earning $4,000 a year elsewhere.

7. You Should Put the Bare Minimum Down on a Home

House Stack Of Cash Dollars

Today’s Truth: This is a risky move that could have significant negative consequences. Be careful not to overleverage yourself.

At the opposite end of the financial wisdom spectrum, other homebuyers assume they should put down the bare minimum. However, that didn’t work out so well for buyers in the mid-2000s who bought with 1% to 3% down — or, in some cases, no money down at all.

If housing prices drop, homeowners who put very little down can find themselves upside-down on their mortgage. Even worse, putting down almost nothing on a home can lead homebuyers to buy more house than they can afford.

Don’t assume you can afford to buy a home just because you have 3% of the purchase price saved. You also need cash for closing costs, an emergency fund, moving, furnishings, and potential repairs. While there are plenty of ways to pull together the down payment for a home, make sure you have enough cash set aside to live comfortably in that home.

8. You Should Pay Off Your Mortgage ASAP

Pay Off Debt Pen Paper

Today’s Truth: Paying off your mortgage early is about balancing opportunity and risk.

There are times when it absolutely, 100% makes sense to pay off your mortgage early. And there are others when it makes no sense whatsoever.

The first factor to consider is what you’re paying in interest. At a 3.5% interest rate, for example, you can effectively earn a 3.5% return by paying off your mortgage early. But you can almost certainly earn higher returns by investing that money elsewhere, such as the historical 7% to 10% returns offered by stocks.

If you’re paying 7% interest on your mortgage, that’s a different story. You may decide that a guaranteed 7% return by paying off the mortgage appeals to you more than chasing possible 7% to 10% returns elsewhere.

Another factor to consider is your age. The older you are, the less time you have to recover from losses, and the more vulnerable you are to sequence of returns risk. At 65, your risk tolerance is lower, and paying off your mortgage has a guaranteed return on investment by reducing your living expenses. At 25, however, why not chase those higher returns by investing aggressively? You have less to lose and more time to make it up.

9. You Should Keep 6 – 12 Months’ Expenses in Your Emergency Fund

Emergency Jar Coins Fund Reserve

Today’s Truth: Your cash reserves should be based on the stability of your income and expenses and your risk tolerance.

The median family income in 2017 was $75,938, according to the U.S. Census Bureau. Does that mean the average family should keep that much money sitting around in cash? Heck no.

Don’t get me wrong; everyone should have an emergency fund. All households need some cash readily at hand for a sudden roof replacement or unexpected job loss. But how large that cash cushion should be varies from household to household.

For households with stable 9-to-5 income and expenses that remain relatively consistent from month to month, keeping one or two months’ expenses in cash could be plenty. To keep more would be to squander the opportunity to invest and earn strong returns. Cash has a negative return every year; it loses money to inflation, historically at a loss of around 2% per year.

Households with irregular incomes or expenses should keep more in cash as a thicker buffer to ride out the fluctuations. For them, the risk of several choppy months in a row is often more serious than the risk imposed by inflation. Read up on strategies to build an emergency fund when your income is irregular if your needs are different than the average 9-to-5 employee’s.

Finally, remember that a household’s expenses should ideally be far lower than their income. A family earning $75,938 should not be spending anywhere near that much, so even if they wanted to keep 12 months’ expenses in an emergency fund, their cash target would be far, far below that number.

10. You Shouldn’t Discuss Money With Friends & Family

Money Bags Group Of Men Discussing Money

Today’s Truth: Talking about your financial strategies and long-term goals is a great way to learn from each other. Just don’t get specific with exact numbers, and never, ever brag.

Spouting off how much you earn or how much you spent on your car is tacky. Sharing budgeting tips or tax strategies with a friend? That’s helpful for both of you.

There’s an old adage that says, “Smart people learn from their mistakes. Wise people learn from others’ mistakes.” If we don’t discuss our experiences and financial strategies with others, we deny ourselves the chance to learn from each other’s mistakes.

I find it incredibly sad that so many people feel like they’re going it alone financially, suffering in silence and isolation. You’re not alone. Several of your friends and family members are going through similar struggles, but they’re reluctant to admit it or talk about it, just like you are.

Open the doors to start talking about money gradually. Share one of your long-term goals in an aspirational way, rather than a bragging way. Ask people for their experiences and opinions. For example, you might say, “We’re trying to tighten up our spending to save enough money to buy a house next year. It seems like you’ve done a good job with your budgeting; where were you able to cut back without losing your quality of life?”

You can share tips and ideas and hold one another accountable when you’re open to discussing money with friends and family. Just remember to never judge others and never show off financially.

11. It’s Better to Pay With a Debit Card Than a Credit Card

Credit Cards Chip

Today’s Truth: Like all tools, credit cards can be used constructively or irresponsibly. It’s up to you to use them wisely — or know yourself well enough to avoid them altogether.

My friend Renee travels internationally at least once a year and domestically many times a year. I’ve never known her to pay in full for her flight and accommodations. She wields travel rewards credit cards the way a magician flourishes playing cards, securing free flights or hotel stays with remarkable dexterity.

Credit cards aren’t inherently evil; they are merely tools. They can earn you money or cost you money depending on how you use them. But while you don’t need Renee’s skill to profit from them, you do need the discipline to pay your bill in full every month.

If you allow a balance to accumulate, it’s time to hit the pause button on your credit card usage. Take a pair of scissors to your cards and go back to the drawing board in your budgeting. Brush up on some of the hidden pros and cons of debit cards versus credit cards and practice discipline, whether that means paying your balance in full every month or not using a credit card at all.

12. Your Asset Allocation Should Be 100 Minus Your Age

Asset Allocation Stock Bonds Real Estate Cash 2

Today’s Truth: Yes, your asset allocation should shift with age, but the “Rule of 100” is dated and simplistic. The “Rule of 120” is better, if still oversimplified.

The “Rule of 100” dictates that you should subtract your age from 100 to determine what percentage of your portfolio you should invest in stocks. The rule goes on to say that the rest should be invested in bonds. It’s nice and neat and simple. It’s also bad advice.

Life expectancies are higher today than they were a generation ago, and bond returns are lower. That means that investors should invest more in stocks, and later in life, than they did a generation ago.

A better rule would be 120 minus your age to determine your stock exposure, or 110 minus your age if you’re more conservative. This ignores other asset classes, however; I personally invest in real estate to serve a similar purpose as bonds in my portfolio. As you get older, rebalance your portfolio periodically to ease your investments into more conservative assets. But don’t be too conservative, or you risk anemic returns.

Final Word

Times change, and so does financial wisdom.

Americans are increasingly responsible for their own finances and retirement planning, and that requires questioning the financial assumptions your parents and grandparents swore by. Personal finance in today’s world is marked by nuance, not rules written in stone.

When in doubt, ask for help. Bounce ideas around with friends and family. Get feedback from informed peers in personal finance Facebook groups. Hire a financial advisor for an hour or two to get personalized advice. Ask yourself what’s best for your financial situation and goals, and act accordingly.

What financial assumptions have you questioned recently?

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Your Career Is a Multimillion-Dollar Investment, So Manage It Wisely

Over the course of a 40-year career, the average American with a bachelor’s degree can expect to earn about $1.8 million.

When viewed by gender, the cumulative earnings shift somewhat, with women taking home $1.4 million over four decades compared to an average of $2.1 million for men, according to estimates by the Indiana Business Research Center at Indiana University’s Kelley School of Business,

The substantial gender pay gap aside, when viewed in this way, it becomes far more obvious just how valuable one’s career can be. And those figures are just the averages. For those who manage a career as actively and shrewdly as they might an investment portfolio, aggressively working to maximize its potential as a financial asset all along the way, a career’s worth of earnings could be worth far, far more.

“The most important part of thinking of your job as an investment is actually pretty basic: realizing that you don’t just have to make an investment, you have to manage it as well,” says from Emmet Savage, chief investor at MyWallSt, a learning and investing app.

What does that mean exactly? Here are some ways to help make the most of your career arc and the amount of financial gain, growth, and opportunity you realize over the course of a lifetime.

Change Your Mindset

In many ways, treating your career as a multimillion-dollar investment begins with altering the way you view work in general.

“For most people, a job is just that. Something they do as a ‘must’ to pay bills without really thinking about their end goal or ideal outcomes,” says 35-year-old Greg Dorban, chief marketing officer for Ledger Bennett.

Dorban, however, never viewed work on such simplistic terms. In the space of just five years, he progressed from intern to co-owner of a multinational marketing agency that generates eight-figure revenues, a meteoric rise he attributes to starting out with a much broader view of work than merely making ends meet.

Early on Dorban established a North Star for himself – the goal of owning a business in short order. This shining beacon guided his subsequent steps, inspiring him to take actions to rise above the day to day hustle of earning a living, including consistently investing in himself and in the training needed to maximize his professional potential.

“Building the right skills will be the best investment you can make as the payoff positively impacts so many areas of your life, not just your wallet,” says Dorban.

The underlying message of his story, Dorban adds, is that when considering your career, allow yourself to think bigger than simply bringing home a paycheck to cover the next rent or mortgage payment. Then identify the training, new skills, or specific experiences and growth opportunities needed to reach that higher goal.

Maximize the Benefits of Everything You Do

The idea of always being “on” and bringing your professional A-game wherever you go can be off-putting to some, but there’s something to be said for recognizing the potential of all situations, including the most ordinary of moments.

Erica McCurdy, a certified master coach and managing member of McCurdy Solutions Group, calls this utilizing and maximizing the benefits of everything you do, which she says can accelerate the power of your time and efforts with regard to your career.

This includes “making sure to introduce yourself to everyone at a meeting and at every place you pause on the way to and from the meeting,” says McCurdy. It also means collecting business cards, connecting with each person on LinkedIn, including a personal message, and scheduling coffee meetings with those people who pique your interest.

“Never forget to send thank you notes to those who helped make the day possible,” adds McCurdy. “Finish up the day by updating your career and contact log so you don’t lose any valuable information.”

There are countless points along the way where you might come into contact with someone who can open a new door for you or somehow play a pivotal role in moving your career to the next level, so keep your eyes open to the possibilities.

Don’t Pass Up Free Money

Maximizing your earnings over the course of a career also means taking some very practical steps as well with the financial opportunities your career presents.

This includes being sure to enroll in an employer sponsored 401(k) plan, particularly if the employer matches your contributions, as that match is free money and can add up over the course of a lifetime.

“The first and best advice I give to new hires is to contribute the maximum to their 401(k),” says careers analyst Laura Handrick of “Many don’t understand the concept of compound interest, so as an HR professional, it’s important to educate employees.”

Handrick also suggests that if your company offers financial planning workshops, be sure to attend. This is another opportunity to expand your financial skills at no cost to you.

But 401(k) matches are merely one example of the financial opportunities available through your workplace.

Take Advantage of Tuition Reimbursement

Many companies offer tuition reimbursement programs to help cover the costs of continuing education for employees who want to go back to school and obtain degrees or certifications.

Brent Michaels, a registered nurse and creator of the website Debt & Cupcakes, says these offers have financial value on multiple levels.

“I graduated from nursing school with minimal student loan debt and have been able to work toward my Bachelor of Science in nursing and other certifications without spending a dime,” he explained. “In addition, as I complete classes, I grow professionally and personally, and the knowledge from these courses helped me secure promotions and business opportunities that would not have been available to me otherwise.”

Even just earning certifications, says Michaels, allows him to stand out as a motivated employee, which pays off in spades over the long run.

…and On the Job Training

Obtaining an advanced degree or certification isn’t the only way to distinguish yourself and maximize career earning potential. Many employers offer on the job training related to specific tasks the organization deems important, said Michaels. Don’t pass up this opportunity, either. You may also want to actively search out such opportunities if they’re not openly available.

“I knew that project management was needed for a promotion I was hoping to obtain in the future, but I had no experience. I intentionally volunteered to work on projects so that I could network with the project managers,” he explained. “I developed relationships and obtained free project management training. This cost nothing more than my time, and allowed me to secure a promotion a few years later that increased my salary by over 25 percent.”


Your network is everything; use it to maximize your ROI.

“Let’s face it, you can have the best resume, you can be the best employee out there, but having people of trust who can vouch for you is irreplaceable. Nothing can beat that,” begins Peter Koch, creator of the site Seller at Heart, which is focused on how to save and make extra money.

Koch is obviously on to something: As many as 85% of jobs are filled via networking, according to a LinkedIn survey.

“This means that when you’re searching for new career opportunities to boost your pay, it really is who you know,” continues Koch. “If you’re able to make good impressions on others in your field and provide value to them, they’ll be happy to recommend you next time their company has an opening you could fill. Employers want to build a team of people they trust, and a personal recommendation from a colleague will always carry more weight than an unknown applicant emailing their resume.”

Need an added reason why networking is so important? Switching jobs is often a better way to increase your salary more significantly, as opposed to waiting for a raise at your current company. In fact, those who leave their employers to take a new job are realizing pay raises that are about one-third larger than those who stay put.

As of this past July, wages for job hoppers grew 3.8% from a year earlier, compared with 2.9% for those who opted to stay with their current employer, according to data from the Federal Reserve Bank of Atlanta.

Lean Out

All of these tips and tactics really lead to what career coach Denise Riebman refers to as “leaning out” with your career. Ribeman recently gave a keynote speech about building your career capital — here’s what that means.

“It’s really about doing a skill and knowledge gap analysis and asking where you do you want to go to in your career and investing in yourself to get there,” she explains. “See who is a couple chapters ahead of you and identify the gaps to get there.”

And like Koch, Riebman says a critical part of leaning out means actively expanding that professional network, or having what she calls an “open network,” which will ultimately help you to be more successful professionally and financially over the long term.

“Traditionally people like to stay in our tribes, among people we know, people we went to school with,” said Riebman. “The problem is that those people have same ideas and same information as you. Having an open network is about building your career capital.”

Mia Taylor is an award-winning journalist with more than two decades of experience. She has worked for some of the nation’s best-known news organizations, including the Atlanta Journal-Constitution and the San Diego Union-Tribune. 

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Lifestyles of the Rich and Foolish

It’s the first of April. You know what that means. Spring is here! Your friends and family are pulling April Fools’ Day pranks. And my tree allergies are kicking my butt. Every year, tree pollen makes my life miserable. This year is no different.

Facebook kindly reminded me this morning that three years ago, Kim and I were in Asheville, North Carolina. After wintering in Savannah, Georgia, we’d resumed our tour of the U.S. by RV.

While in Asheville, we toured the Biltmore Estate, the largest home in the U.S. This 250-room chateau contains 179,000 square feet of floor space — including 35 bedrooms, 43 bathrooms, and 65 fireplaces — and originally sat on 195 square miles of land. (Today, the estate “only” contains 8000 acres.)

The Biltmore Estate

“This feels like Downton Abbey but in North Carolina,” I said as we walked the endless halls. Just as Downton Abbey documented the excesses of British upper class, so too the Biltmore sometimes feels like an example of how rich Americans indulged in decadence.

George Washington Vanderbilt II, the man who built Biltmore, was a member of one of the country’s wealthiest families. His grandfather, Cornelius Vanderbilt, was born poor in 1794, but by the time he died in 1877 he had become one of the richest men in the world. During his lifetime, he built a fortune first from steamships and then as a prominent railroad tycoon.

By family standards, grandson George didn’t have a lot of money. He inherited about $7 million, and drew income from a $5 million trust fund. He decided to use the bulk of his fortune to build a huge house high in the Appalachians. Work on the Biltmore Estate began in 1889, when George was 26 years old. Six years and $5 million later, he moved into his palace. (That $5 million would be roughly $90 million in today’s dollars.)

Strolling the grounds of the Biltmore Estate got me thinking about the stories we hear of wealthy people who squander their riches. How and why do they do this? Are there lessons from their stories that you and I can put to use?

We hear all the time about the “lifestyles of the rich and famous”. Today, on April 1st, let’s look at some lifestyles of the rich and foolish.

Lifestyles of the Rich and Foolish

There are so many stories of athletes and entertainers who have blown big fortunes that it’s tough to know where to start. Who should we pick on first? Since I’ve never been a fan of Nicolas Cage — and since he seems to be especially bad with money — let’s use him an example.

Over a period of fifteen years, Cage earned more than $150 million. He blew through that money buying things like:

  • Fifteen homes, including an $8 million English castle that he never stayed in once.
  • A private island.
  • Four luxury yachts.
  • A fleet of exotic cars, including a Lamborghini that used to belong to the Shah of Iran.
  • A dinosaur skull he won after a bidding contest with Leonardo DiCaprio.
  • A private jet.

It’s not fair to characterize Cage as “broke” — he’s still a bankable movie star — but his net worth is reportedly only about $25 million. (That’s like someone with an average income having a net worth of roughly $25,000.) He could be worth ten times as much but his foolish financial habits have caused him woe.

Cage got in trouble with the IRS for failing to pay millions of dollars in taxes. He’s been sued by multiple companies for failing to repay loans. His business manager says that he’s tried to warn Cage that his lifestyle exceeds his means, but the actor won’t listen.

Cage is but one of many celebrities who have done dumb things with money. Other prominent examples include:

  • MC Hammer sold the rights to his songs to raise money after being bankrupted by his lavish lifestyle. Hammer earned more than $33 million in the early nineties, but spent the money on a $12 million mansion (with gold-plated gates), a fleet of seventeen vehicles, two helicopters, and extravagant parties. [source, source]
  • Actress Kim Basinger paid $20 million to buy the town of Braselton, Georgia in 1989. When Basinger filed for bankruptcy just four years later, she was forced to sell the town. [source]
  • On the night of 01 February 1976, Elvis Presley decided he wanted a Fool’s Gold Loaf, a special sandwich made of hollowed bread, a jar of peanut butter, a jar of jelly, and a pound of bacon. He and his entourage flew from Memphis to Denver. The group ate their sandwiches and then flew home. Price: $50,000 – $60,000. [source]
  • Even authors get in on the act. Writer Mark Twain made tons of money through his work, but he lost much of it to bad investments, mostly in new inventions: a bed clamp for infants, a new type of steam engine, and a machine designed to engrave printing plates. Twain was a sucker for get rich quick schemes. [source, source]

When it comes to frittering way fortunes, it’s hard to compete with sports superstars. In a 2009 Sports Illustrated article about how and why athletes go broke, Pablo S. Torre wrote that after two years of retirement, “78% of former NFL players have gone bankrupt or are under financial stress.” Within five years of retirement, roughly 60% of former NBA players are in similar positions.

Some examples:

  • Boxer Mike Tyson earned over $300 million in his professional career. He lost it all, spending the money on cars, jewels, pet tigers, and more. He eventually filed for bankruptcy. [source]
  • When Yoenis Cespedes signed a new $75 million contract with the New York Mets, he drove a new vehicle each day during the first week of training camp, including a Lamborghini Aventador ($397,000) and an Alfa Romeo 8C Competizione ($299,000). [source]
  • Basketballer Vin Baker earned $100 million during his career. He’s now worth $500,000. He manages a Starbucks store in a small town in Rhode Island. (To be fair, Baker sees to be turning his life around, which is awesome.) [source]
  • Hall-of-fame pitcher Curt Schilling earned $112 million during 20 years in the big leagues. It wasn’t enough to keep up with his spending. Plus he lost $50 million through the collapse of a company he owned. In 2013, he held a “fire sale” to avoid bankruptcy.

It can be tough to sympathize with these folks. Used wisely, their immense fortunes could sustain them and their families for a long time. Instead, they squander their money on fleeting pleasures and the trappings of wealth.

Still, I believe it’s best to keep the schadenfreude in check. “There but for the grace of God” and all that, right? I’ve seen plenty of examples of average folks who have wasted smaller windfalls. In fact, this sort of thing seem to be the rule rather than the exception.

But why does this happen? The answer might be Sudden-Wealth Syndrome.

Lottery winners have the same kinds of problems. A 2001 article in The American Economic Review found that after receiving half their jackpots, the typical lotto winner had only put about 16% of that money into savings. It’s estimated that over a quarter of lottery winners go bankrupt.

Take Bud Post: He won $16.2 million in 1988. Within weeks of receiving his first annual payment of nearly half a million dollars, he’d spent $300,000. During the next few years, Post bought boats, mansions, and airplanes, but trouble followed him everywhere. “I was much happier when I was broke,” he’s reported to have said. When he died in 2006, Post was living on a $450 monthly disability check.

Sudden-Wealth Syndrome

In 2012, ESPN released a documentary called Broke that explores the relationship between pro athletes and money. How does sudden wealth affect young men? What happens when highly-competitive athletes with high incomes hang out together? Lots of stupid stuff, as it turns out.

Here’s a nine-minute montage from Broke in which wealth manager Ed Butowsky talks about why athletes get into trouble with money:

Broke is an interesting film. The players speak candidly about the mistakes they’ve made: buying 25 pairs of shoes at one time, buying fur coats they never wore, buying cars they never drove. They’re not proud of their pasts — some are ashamed — but they’re willing to talk about the problem in the hopes they can help others avoid doing the same dumb things in the future.

Curious how much your favorite actor or athlete earns? Check out Celebrity Net Worth, a website devoted to tracking the financial health of people in the public eye.

Broke does a good job of explaining why our sports heroes can’t seem to make smart money moves. The problem is Sudden-Wealth Syndrome. Essentially, young folks who earn big bucks don’t get a chance to “practice” with money before they’re buried with wealth.

The typical person earns a little when they’re young, but watches their salary grow slowly with time. Their income peaks during their forties and fifties. As a result, they get time to make mistakes with small amounts of money first which means (in theory) that they’re less likely to blow big bucks down the road.

On the other hand, athletes (and entertainers) have a completely different earning pattern. They leave school to instant riches. For a few years, they earn great gobs of money. But usually their income declines sharply with time — until it stops altogether.

Here’s a (pathetic) chart I created to help visualize this phenomenon:

Sudden Income vs. Normal Income

Athletes and entertainers need to figure out how to make five years of income last for fifty years. This never occurs to most of them. “[A pro athlete] can’t live like a king forever,” says Bart Scott in ESPN’s Broke. “But you can live like a prince forever.”

Sudden-Wealth Syndrome doesn’t just affect athletes and actors. Lottery winners experience it too. So do average folks who inherit a chunk of change or business owners who sell their companies.

The fundamental problem is that nobody ever teaches us how to handle a windfall. Windfalls are rare, and in most cases they can’t be planned for. (Some folks might be able to plan for an inheritance or the sale of a business, but these situations are relatively uncommon.) As a result, when the average person happens into a chunk of change, they spend it.

Here’s what you should do instead.

How NOT to Waste a Windfall

When you receive a windfall, whether it’s a tax refund, an inheritance, a gift, or from any other source, it’s like you’ve been given a second chance. Although you may have made money mistakes in the past, you now have a chance to fix those mistakes (or some of them, anyhow) and start down the path of smart money management.

It can be tempting to spend your windfall on toys, trips, and other things that you “deserve,” but doing so will leave you in the same place you were before you received the windfall. And if that place was chained to debt, you’ll be just as unhappy as you’ve always been.

If you receive a chunk of cash, I recommend that you:

  • Keep five percent to treat yourself and your family. Let’s be realistic. If you receive $1,000 or $10,000 or $100,000 unexpectedly, you’re going to want to spend some of it. No problem. But don’t spend all of it. I used to recommend spending one percent of a windfall on yourself, but from talking to people, that’s not enough. Now I suggest spending five percent on fun. That means $50 of a $1,000 windfall, $500 of a $10,000 windfall, or $5,000 of a $100,000 windfall.
  • Pay any taxes due. Depending on the source of your money, you might owe taxes on it at the end of the year. If you forget this fact and spend the money, you can end up in a bind when the taxes come due. Consult a tax professional. If needed, set aside enough to pay your taxes before you do anything else.
  • Pay off debt. Doing so will generally provide the greatest possible return on your investment (a 20 percent return if your credit cards charge you 20 percent). It’ll also free up cash flow; if you pay off a card with a $50 minimum monthly payment, that’s $50 extra you’ll have available each month. Most of all, repaying debt will relieve the psychological weight you’ve been carrying for so long.
  • Fix the things that are broken. After you’ve eliminated any existing debt, use your windfall to repair whatever is broken in your life. Start with your own health. If you’ve been putting off a trip to the dentist or a medical procedure, take care of it. Do the same for your family. Next, fix your car or the roof or the sidewalk. Use this opportunity to patch up the things you’ve been putting off.
  • Deposit the rest of the money in a safe account. It can be tempting to spend the rest of your windfall on a new motorcycle or new furniture or new house. Don’t. After attending to your immediate needs, deposit the remaining money in a new savings account separate from the rest of your bank accounts — and then leave this money alone.

To successfully manage a windfall, you must allow the initial euphoria to pass, getting over the urge to spend the money today. Live as you were before. Meanwhile, calculate how far your windfall could go. Most people have unrealistic expectations about how much $10,000 or $100,000 can buy.

In 2009, I received an enormous windfall. The old J.D. would have gone crazy with the money. The new, improved model of me was prepared, and made measured moves designed to favor long-term happiness over short-term happiness.

Today, the bulk of my windfall remains in the same place it’s been for the past five years: an investment account. That cash eases my mind. It helps me sleep easy at night. And that’s more rewarding than spending it on new toys could ever be.

Setting a Good Example

Not everyone who gets rich quickly does dumb things with money. Especially as the plight of pro athletes becomes better known, there are prominent examples of young superstars making savvy money moves. They’re learning from the lessons of those who came before.

Take Toronto Raptors superstar Kawhi Leonard, for instance. This 27-year-old NBA MVP earns $23 million per year — but still clips coupons for his favorite restaurant. He drives a 1997 Chevy Tahoe. Sure, he bought himself a Porsche, but he’s not interested in flash and bling. “I’m not gonna buy some fancy watch just to show people something fancy on my wrist,” he says. [source]

Jamal Mashburn has made wise use of his wealth. So has LeBron James, who takes his investment advice from Warren Buffett:

Here are other superstars who act as money bosses:

  • During his 12-year career in the NBA, Junior Bridgeman never earned more than $350,000. Unlike most players, however, he planned ahead. He recognized his basketball income would eventually vanish. He bought a Wendy’s fast-food franchise and learned the business inside-out. He became a hands-on owner. He expanded from one store to three to six — and then to a small empire. Today, twenty-five years after retirement, Bridgeman owns more than 160 Wendy’s restaurants and 120 Chili’s franchises. His company employs 11,000 people and generates over half a billion in revenue every year. His personal net worth tops $400 million. [source]
  • Patriots tight end Rob Gronkowski — who just retired last week — is a shining example of how to handle sudden wealth correctly. The 29-year-old earned over $53 million for playing on the field — and hasn’t spent any of it. Here are his own words: “To this day, I still haven’t touched one dime of my signing bonus or NFL contract money. I live off my marketing money and haven’t blown it on any big-money expensive cars, expensive jewelry or tattoos and still wear my favorite pair of jeans from high school.” [source]
  • Oakland Raiders running back Marshawn Lynch has a similar story. During his twelve-year NFL career, Lynch has collected nearly 57 million from his contract. Reportedly, he hasn’t spent a penny of that money. Instead, he’s been cautious to live only off his endorsement earnings. Whether this is true or not, Lynch is known to be a good example to his teammates, helping them with their 401(k)s and other financial issues. [source]

Sometimes superstars who have been poor with money have a flash of insight and they’re able to turn things around. Former NFL player Phillip Buchanon is a perfect example. After watching ESPN’s Broke, he realized he was headed for trouble. He mended his ways and started managing his money wisely. Now he’s written a book with advice for other folks who are fortunate enough to encounter a windfall. [source]

When people make a lot of money, they’re able to spend a lot of money. Sometimes the super-rich can afford to build a place like the Biltmore Estate. The problem isn’t a single extravagant purchase, but a lavish lifestyle in which they spend more than they earn. Real wealth isn’t about earning money — it’s about keeping money.

Author: J.D. Roth

In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he’s managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.

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7 Trends That Are Radically Changing Your Retirement

Photo by Zoriana Zaitseva /

Although the concept of retirement remains largely unchanged, how you live out those years has shifted dramatically over the years.

Following are seven key ways in which your post-work life is likely to differ sharply from that of your parents.

You’re more likely to plan a later retirement date

Calendar last dayBirdiegal /

A growing number of Americans appear to have reached the same conclusion: Dreams of sipping colorful drinks on a deserted beach are just going to have to wait a while.

In a quarter-century, the percentage of workers expecting to retire after the age of 65 more than tripled, from 11 percent in 1991 to 37 percent in 2016, according to the Employee Benefit Research Institute.

However, planning to delay your retirement and actually doing so are two different things. While 26 percent of workers plan to wait until at least age 70 to retire, just 8 percent of retirees actually do so.

You’re more likely to live downtown than in the suburbs

Downtown senior womanRocketclips, Inc. /

The stereotype suggests that retirees want a quiet home in the country, undisturbed by the noise of modern life.

The reality is quite different. In fact, retirees are flocking to urban centers to live out their golden years. AARP cites a report from TenantCloud, a property management software service, revealing that about one-third of all urban applications are for renters who are older than 60.

You’re more likely to head outdoors for fun

jkelly /

Americans of all ages increasingly look to the great outdoors and nature when planning activities. Camping, biking and birdwatching all are growing in popularity across age groups, according to the Physical Activity Council’s 2019 Participation Report.

Older adults are particularly drawn to anything that gets them out among wildlife, including fishing and wildlife walks.

You’re more likely to be healthier

Senior exercisepikselstock /

Good news for aging folks who worry about their bodies suddenly falling apart: Today’s retirees can expect to enjoy much better health than retirees of earlier generations.

From 1998 and 2012, the percentage of adults ages 80 and older in fair or poor health dropped significantly, from 43 percent to 34 percent, according to an Urban Institute report.

Alas, tomorrow’s retirees might not fare quite so well. Between 1992 and 2010, the percentage of adults ages 51 to 54 who reported fair or poor health jumped from 17 percent to 22 percent.

The source of this bad news? An increase in the rate of people diagnosed with diabetes, largely a result of our high-fat, junk-food diets and rising obesity rates.

You’re more likely to live abroad

Seniors abroadIakov Filimonov /

For generations, retirees have used their free time to travel. Now, a growing number of such folks are choosing one-way adventures, with no plans of returning home.

The percentage of Americans retiring abroad jumped 17 percent between 2010 and 2015, according to an Associated Press report. A little under 400,000 retirees were expatriates four years ago, and that number is expected to grow.

Some countries are more attractive destinations than others. In fact, one country — Costa Rica — is especially desirable for its cheap, modern health care, as we reported last year.

You’re less likely to downsize

Senior couple with solarKzenon /

As workers near retirement, they traditionally have expected to downsize to more modest — and less costly — digs. However, that rule appears to be more myth than reality for millions.

A joint Merrill Lynch-Age Wave survey found that half of retirees did not downsize in their last move, with 30 percent actually “upsizing” into a larger home.

The reason? These retirees want more room for family members to visit or stay.

You’re less likely to leave an inheritance

Senior woman with credit cardPif Paf Puf Studio /

Better not show this one to your kids: A 2015 HSBC survey of workers in 15 countries and territories — including the U.S. — found that 23 percent of workers prefer to spend all of their savings rather than to leave the cash to children. In fact, just 9 percent intend to save as much as possible and pass the money on.

Learn everything you need to plan your dream retirement

The Only Retirement Guide You’ll Ever Need gives you the knowledge you need to retire on your own terms. Sure, you can pay a financial adviser, but this online course gives you total control to create a custom retirement plan around the things that make you happy.

You’re going to get expert, personalized advice. You’ll have access to the latest tools. And when it’s complete, you’ll be able to approach your retirement confidently and with peace of mind.

It’s time to plan the best years of your life. Let’s get started.

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5 Empowering Tips for Women on Equal Pay Day

April 2 is Equal Pay Day, which symbolically marks the day in the year when the typical woman has worked long enough to catch up with what the average man made in the previous year.

Until that gap is bridged on a national level, here’s what women can do individually to help improve their own pay situation:

1. Don’t make it awkward

“Money talk doesn’t have to be uncomfortable,” says Kenia Calderon, a client relations director in Des Moines, Iowa, who got a promotion and negotiated her salary last fall. “Reflecting on your contributions can build up your comfort level.”

Researching salaries across your industry and brushing up on techniques from women who have successfully increased their pay can boost your courage.

Tori Dunlap, a digital marketing manager and founder of Her First $100K, a money and career platform for millennial women, compares the conversation to a presentation or audition: “Knowing the piece like the back of your hand — and your answer to any potential rebuttals — can help you feel confident even when you’re nervous or facing the unknown,” she says.

2. Document, document, document

Did you recently take on a new project, land a client or make a daunting process more efficient for your company? Jot all of that down — and in as much detail as possible.

Jackie Luo, a software engineer in San Francisco who recently landed a promotion, emphasizes the importance of logging your wins, however big or small.

“I keep track of all my accomplishments in a ‘hype doc’ mapped to my company’s leveling system so that it’s really clear to me, my manager and the people in charge of approving promotions where I stand,” Luo says. “If they need to see examples of technical projects or instances of mentorship, I have all of that documented.”

3. Go back to your job description

It might seem obvious, but the best way to ask for a raise or promotion is to prove that you’re going above and beyond the scope of what you were hired to do. Referencing your original job description is a good place to start.

“I realized that a few of my key responsibilities were not noted on the job description,” Calderon says. “Bring these up. Your employer may overlook them or not realize how much time these tasks take.”

Prepare to speak to how the tasks you’re doing — the ones not covered in the job description — benefit your team or company. To negotiate more effectively, frame the conversation in a positive way (“I’ve successfully taken on a greater workload”) versus complaining about all the extra work you’ve had to do over the past quarter.

4. Connect with a female mentor

It can be challenging and intimidating to tackle issues like pay on your own, so have someone in your corner. See if there’s another woman who can be a trustworthy, go-to resource for steady advice and support — perhaps a colleague or a friend in the same industry. This is especially important if you’re in a male-dominated industry.

“Women in tech can feel isolated or alone due to not seeing role models that look like them,” says Jossie Haines, a platform engineering director at Tile in San Jose, California. “Mentoring can help combat those feelings. I implore all women to find a mentor or sponsor, especially if they feel like they’re struggling.”

If you’re having trouble identifying one, you can join a dedicated mentorship organization, such as Million Women Mentors or Women Accelerators. The right mentor can be your sounding board and spur you to advance your career one step at a time.

5. Look for a sponsor

Although mentors can provide invaluable career advice, sponsors can take a more direct role in advancing your career.

So what, exactly, are sponsors? They’re people at your company who can advocate on your behalf and directly influence the type of work you do, which can impact your salary and overall career growth. Perhaps it’s your manager or someone on another team who can give you more resources or connections at your company.

“Sponsoring can expose women to new opportunities they may not usually have access to,” Haines says.

Emily Sheboy, a project manager in Washingtonville, New York, who says her sponsor is also her direct supervisor, says the key is to be transparent about what you’d like to do. “Make the most of having a sponsor by being forthright and honest about your skills and ambitions,” she says. “And if they have the ability to influence projects you get assigned to, thank them and ensure you do a good job.”

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Brigette’s $84 Grocery Shopping Trip and Weekly Menu Plan for 6

My older sister, Brigette, shares her shopping trips and menu plans every week! You can go HERE to see all of her weekly menu plans and you can go HERE to read all about her family!

ALDI grocery shopping trip

1 3-lb bag frozen Boneless, Skinless Chicken Breasts – $5.39

2 cans Chicken Breast – $3.10

1-lb roll Sausage – $1.89

1 pkg Sliced Pepperoni – $1.95

1 pkg String Cheese – $1.95

1 16-oz carton Heavy Cream – $1.55

1 32-oz carton Half and Half – $1.55

2 32-oz cartons Nonfat Plain Greek Yogurt – $6.58

4 individual Flavored Greek Yogurts – $2.36

1 16-oz bag Shredded Mild Cheddar Cheese – $2.15

1 large canister Quick Oats – $2.29

2 boxes Honey Nut Oats – $2.30

1 box Crisp Rice – $1.15

4 dozen Eggs – $3.12

1 16-oz carton Egg Whites – $1.69

2 cans Green Beans – $0.76

1 bunch Bananas (1.81lbs @ $0.34/lb) – $0.62

1 bag Radishes – $0.49

1 10-lb bag Russet Potatoes – $3.49

1 large jar Unsweetened Applesauce – $1.89

1 pkg Romaine Hearts – $1.89

1 Cauliflower – $1.99

4 Avocados – $1.96

1 pkg Mushrooms – $0.89

1 Pineapple – $0.99

1 3-ct pkg Multi-Colored Peppers – $1.99

1 large tub Organic Spring Mix – $3.99

2 pkgs Mini Cucumbers – $2.38

1 3-lb bag Pink Lady Apples – $3.99

2 pkgs Baby Carrots – $1.50

1 pkg Broccoli Crowns – $1.69

1 pkg Grape Tomatoes – $1.15

1/2 gallon 1 % Milk – $0.78

1/2 gallon Orange Juice – $1.59

1 can Garbanzo Beans – $0.48

1 jar Salsa – $0.99

1 large jar Grape Jelly – $1.09

1 jar Chicken Bouillon Cubes – $1.69

1 bag Nacho Tortillas Chips – $0.75

1 packet Taco Seasoning Mix – $0.29

1 jar Pasta Sauce – $0.85

1 bag Four Tortillas – $0.65

1 loaf Sandwich Bread – $0.65

2 bags frozen Riced Cauliflower – $3.78

Total: $84.27

Grocery Total for the Week: $84.27

Weekly Menu Plan


Veggie Omelets, Cereal, Oatmeal, Scrambled/Fried/Hard Boiled Eggs, Yogurt, Fruit, Toast


Cheese Quesadillas, Applesauce, Carrots x 2

Peanut Butter and Jelly Sandwiches/Rice Cakes, Carrots/Cucumbers, Apples/Bananas x 3

Leftovers x 2


Pancakes, Sausage Patties, Scrambled Eggs

Meatloaf (I use a mix of mostly ground venison and some ground hamburger), Green Beans, Mashed Potatoes

Taco Chicken Casserole (I’ll sub plain greek yogurt in place of sour cream), Tossed Salad, Pineapple

Pepperoni Pizza, Breadsticks, Fresh Raw Veggie Platter with Greek Yogurt Ranch Dip

Slow Cooker Homemade Chicken Noodle Soup, Biscuits

Baked Potato Bar (Fried Bacon, Roasted Broccoli, Plain Greek Yogurt, Salsa, Shredded Cheese, Avocado, Garbanzo Beans), Pineapple


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How to Invest in Real Estate — Even if You’re No Mogul

You might already be investing in the stock market, whether your goal is to fund an upcoming splurge or enjoy a relaxing retirement.

But investing in real estate? That’s a whole different level of penny hoarding… right?

Considering the average price of a new home in America is a whopping $362,400, per Census data from November 2018, it’s easy to think that real estate investments are out of reach for the average earner. Even a minimal 3% down payment on that amount is a five-figure sum!

But at the same time, investing in real estate is one of the most reliable ways to build wealth — and you don’t have to buy a whole strip of office buildings or a swath of rental properties to do it.

In this post, we’re going to cover how to invest in real estate with little or no money to start with, as well as some more creative ways to boost your earnings if you’re getting ready to buy a home.

Why Investing in Real Estate Is a Good Idea

The rooflines of a large, modern multi-level house with vinyl siding.

You might think that real estate investing is not only unaffordable, but also a plain old waste of time. Why sink so much money into buying property when there are so many other ways to generate cash flow?

Why is real estate such a good investment?

Well, for one thing, when it goes well, it goes really well. Smart real estate investing is one of the easiest ways to become a self-made millionaire. (Remember, though, that “easy” is relative.)

Even if you’re not hoping to become rich Uncle Pennybags, investing in real estate is a great way to earn a passive, or at least semi-passive, income.

Depending on your approach, your investments could reap rewards with almost zero work on your end.

“Real estate offers a continuum of effort that the investor can put in,” says Scott Trench — and he should know. He’s a personal finance author, house-hacking guru (more on that in a sec!) and the CEO of BiggerPockets.

Oh, and did we mention he’s a real estate investor whose properties have him on track for early retirement… even though he’s yet to celebrate his 30th birthday?

“I like to think of it as a semi-passive business,” Trench says.

When properly managed, investments like rental properties can earn help you earn a hefty paycheck for relatively little work — but it’s also pretty easy to scale the business if you put that money back into your real estate projects.

If buying a whole house of your own is totally off the table, there’s also passive real estate investment to consider: opportunities to put money into real estate without actually purchasing your own property.

In many cases, you can get started on this kind of real estate investing for less than $1,000, and the returns can be substantial.

But before we dive into some specific ways to invest in real estate, let’s go over some key definitions. You’ve gotta talk the talk before you can walk the walk, whether it’s Boardwalk or Park Place you’re after!

Investing in Real Estate: The Lingo

Two people inspect bueprints inside an unfinished commercial building construction project.

Here are some of the most common terms you’ll hear thrown around in real estate investing circles.

Residential real estate refers to properties designed to be used as places to live. Single-family homes, townhouses and condominiums all count — though homes with more than four units, like apartment buildings and large multiplexes, are considered commercial property.

Commercial real estate is property used for business purposes, such as restaurant and retail space or office buildings.

As mentioned above, extra-large residential buildings are also considered commercial real estate, since they’re generally managed as businesses.

Industrial real estate is property where industrial businesses perform their functions, whether it’s factory space, shipping yards or storage warehouses.

You probably already know this one, but a landlord is someone who owns property and leases it out to a third party, usually for residential or commercial use.

A landlord is also known as a lessor.

A lessee, then, is the person renting the property, who’s also known as a tenant.

Rent is the money a landlord collects from the tenant as compensation for use of the property, usually taken on a monthly basis.

Appreciation is an asset’s increase in value over time. Real estate is one of the only tangible investments whose value tends to appreciate.

Interest is the price charged by a lender for the service of providing a loan, expressed as a percentage of the loan amount.

For instance, according to’s APR calculator, if a borrower takes a $150,000 loan with a 5% APR interest rate, and repays the balance over a 30-year period, that borrower will end up paying the lender back a total of $289,885.27.

That means the lender earns $139,885.27 in interest! (Not a bad payoff, huh? But pretty scary from the borrower’s perspective!)

How to Invest in Real Estate: 3 Ways You May Not Have Thought of Yet

A tile with the house number 3, affixed on a stone wall.

The most obvious way to get involved with real estate investing is, of course, to actually purchase property. And we’re going to go into that investment option in a few minutes.

But what if you want a piece of the real estate investing pie without signing a mortgage — or ever having to respond to a tenant’s 3 a.m. plumbing crisis?

There are actually a variety of passive real estate investment tactics that require nothing but your money. And you don’t necessarily have to have very much of it to start.

Just like investing in stocks, these real estate investment approaches allow you to earn money on the appreciation of the properties you’re backing… without requiring you to actually purchase or manage the property yourself.

1. Real Estate Investment Trusts (REITs)

A real estate investment trust is a company whose bread and butter is purchasing commercial real estate, with the express intent of funding properties that generate income.

REITs then sell shares of those real estate investments to outside investors, who earn money in the form of dividends.

In short, it’s just like investing in the stock market: You put your money on the table to back the company, and you reap returns when the company does well.

In this case, though, the company’s sole mission is to own, operate and finance real estate. So you’re basically buying tiny portions of a variety of different properties you may never even see or set foot on.

Depending on the type of REIT you’re talking about, you may be able to buy into the game for very little money.

Private REITs aren’t traded on the stock market, which means they’re generally unavailable to the average investor. With high fees and higher minimum investments, this is the domain of accredited investors with substantial net worth.

Publicly traded REITs, however, are available on the stock market — and if you have a brokerage account and enough capital to buy a share, you can go ahead and add it to your investment portfolio. However, these REITs do see substantial market volatility just like regular stocks, so it’s definitely not a risk-free investment.

There are also public, non-traded REITs, which aren’t available on the stock market but are registered with the SEC, or U.S. Securities and Exchange Commission. They sometimes carry high investment fees and minimums, but not always, and so may occasionally be an option for the average investor.

2. Crowdfunded Real Estate Investing

If you’re familiar with platforms like Kickstarter or Patreon, you already understand how crowdfunding works.

We found a company that helps you do just that for real estate.

You don’t have to have hundreds of thousands of dollars. You can get started with a minimum investment of just $500. A company called Fundrise does all the heavy lifting for you.

Through the Fundrise Starter Portfolio, your money will be split into two portfolios that support private real estate around the United States.

3. Private Equity Funds and Opportunity Zone Funds

Private equity funds work kind of like mutual funds — or the crowdfunding platforms we just mentioned, but at a higher, less grassroots level.

They still work by pooling the assets of many investors to make high-value investments but are generally limited to accredited investors who can put down at least $100,000.

Opportunity zone funds are another type of pooled-asset investment strategy, but they’re specifically geared toward backing developments in economically distressed U.S. neighborhoods.

Because they help stimulate needed growth in those areas, they’re subject to some pretty appealing tax incentives — especially if you leave your money in the fund for a substantial period of time.

For instance, if you retain an opportunity zone fund holding for five years, your tax liability on capital gains (i.e., earnings made through appreciation) is reduced 10%. If you retain it seven years, the reduction is bumped to 15% — and if you can afford to leave the money tied up for a decade, you won’t pay any capital gains taxes.

That makes backing opportunity zone funds a very interesting option indeed for a qualified investor looking for a long-term investment opportunity.

But again, depending on the fund you choose, you may be subject to an investment minimum of as much as $250,000.

Investing in Real Estate the Old-School Way: Buying Property

A couple happily hug while doing renovation work inside a house.

If you are on board to become a bona fide property owner — the kind who can actually put the key in the door — there are ways to make buying a home, which is already usually a smart money move, into an even smarter investment.

For those of you ready to sign a mortgage (or even buy a house in cash!), here are some income-generating tactics to consider as you enter the real estate market.

House Hacking

Ever dream of living rent- (or mortgage-) free?

House hacking is all about making that dream possible. (And it’s also how Scott Trench, the real estate investor we mentioned above, got his start.)

Basically, you find a property that you can simultaneously live in and rent — in many cases, a duplex with two separate living areas.

You then use the money you earn as a landlord to eradicate your mortgage payments quickly, ideally eclipsing your monthly payment entirely.

Trench in particular used house hacking as a ladder to get his start as landlord with multiple rental properties.

After he paid off his first duplex, the rent he was earning was pure profit, which he was then able to reinvest in more properties… which earned him even more rent. (Genius, right?)

The best part of house hacking is that it takes a necessary living expense — i.e., keeping a roof over your head — and turns it into an earning opportunity.

So if you’re already looking to buy a home of your own, you may as well see if you can find one that’s hackable.

House Flipping

If you’ve ever magically lost an hour or three of your life by watching the nigh-pornographic property transformations on HGTV, you’re probably familiar with house flipping.

And your experience of that rags-to-riches story doesn’t have to be limited to the TV screen. If you’re relatively handy and have an understanding of real estate values, you could try the tactic yourself.

The way it works is pretty simple, on the surface: You purchase an investment property that could use some TLC — a “fixer-upper,” in common parlance — and put in the repairs and remodels necessary to make it nice and shiny.

The value of the house goes up, at which point you can sell the property for a profit.

It’s important to note, however, that this is one of the most work-intensive ways to invest in real estate. And you do stand to lose a whole lot of money if you don’t do it right.

Renovations are already expensive, and if the house sits empty on the market, you could lose even more money — both in opportunity cost and actual charges, like property taxes.

In other words, this approach is not for the total real estate investing beginner!

Airbnb and Other Vacation Sublets

As anyone who’s taken a vacation in the past five years knows, hotels are so last century.

Nowadays, it’s all about the intimacy, convenience, and relative affordability of peer-to-peer short-term rental accommodations, like the ones available on Airbnb.

If the home you buy has a spare bedroom — or better yet, an outbuilding or separate in-law quarters — you can use that space to turn a tidy profit.

Just be sure you look into the regulations in your area first. Some cities have enacted a short-term rental permit or licensing program in order to ensure enough housing remains available for permanent residents.

As you can see, there are many ways to get started in real estate investing, even if you don’t have the cash to buy a rental property outright.

And who knows? If you play your cards right, the returns you make may just put you in mogul territory — or at least keep a roof over your head.

Jamie Cattanach’s work has been featured at Fodor’s, Yahoo, SELF, The Huffington Post, The Motley Fool, Roads & Kingdoms and other outlets. Learn more at

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.

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How to Climb the Corporate Ladder

It’s good to be the boss. People in charge of an organization not only make more money, but they also have happier family lives, are more satisfied with their work, and worry less about their financial futures, according to a 2014 Pew Research report. Those in the top levels consider their employment a “career,” not just a job that pays the bills.

So what can you do to get a promotion to those top levels? There are a number of steps you can take to improve your chances of advancing your career, whether with your existing employer or a new one. Your long-term success depends on having as many options as possible and being prepared when an opportunity arises.

11 Ways to Advance in Your Career

Getting to the top of the corporate food chain becomes increasingly more difficult in the higher tiers of management. In many organizations, average performers in the lower ranks can expect some promotions by merely being competent and building tenure. Attaining more senior positions or advancing at a faster rate, however, requires the following strategies, at the very least.

1. Evaluate Corporate Opportunities

Opportunities Hands Raised

The more opportunities available to you, the better. For example, a rapidly growing company depends on numerous managers to implement its strategies, whether that’s introducing new products, expanding into new geographic territories, or capturing a larger market share. At the same time, a growing company typically takes risks to meet profit targets or expand into new markets.

Successful small companies can become acquisition targets for larger competitors. If their efforts are successful, the acquirer typically cuts redundant staff and replaces poor and average performers with their own people. In other words, the choice to work for a small growing company is a high-risk, high-reward proposition for an ambitious employee.

On the other hand, mature companies that already dominate an industry may have slower career paths but provide valuable experience and security for those willing to wait for their turn in corporate leadership. If the company chooses to blend acquisitions and internal growth to achieve profit targets, the opportunities for advancement can exceed those of a smaller company, with less risk.

That said, many mature companies have policies aimed at inducing turnover at the top levels. They may offer early retirements, buyouts, and titles with higher compensation but no authority or responsibility — a kind of in-place retirement — to retain younger, aggressive managers who might otherwise leave the company. Your selection of an employer is a critical element in how fast you climb the ranks.

Identify the most important aspects of an employer for you. For example, do you seek financial security or the opportunity for rapid advancement? Are you willing to sacrifice leisure time for a promotion? Are you competitive or more passive? Do you work best as an individual or part of a team? Where does work fit into your priorities?

Gather as much information about potential employers as possible. Public companies’ required disclosures are easy to access, newspapers and magazines often run articles on local companies and businessmen, and most companies have websites with information on various facets of the company. Review comments about potential employers on sites like Glassdoor, Vault, and PayScale, remembering that some reviews may be negatively biased. If possible, talk to current and former employees. If you find anything that concerns you, ask the company’s recruiter for an explanation. After all, you’re making one of the most important decisions of your life.

2. Get the Lay of the Land

Business Woman Leading Meeting In Office Colleagues

Every company has a culture, whether intentionally or informally developed. It’s the company’s personality and includes shared values, ethics, and expectations that govern employee behavior. Ignoring an established culture is one of the worst errors a new employee can make; it’s effectively inviting battles without knowing your foes or having a battle plan.

A company’s public statements and recruitment conversations can vary significantly from acceptable day-to-day behavior. As a consequence, new employees eager to make a significant impression may be admonished with the comment “That’s not the way we do things around here.” Before implementing your plan to get ahead, take the time to understand the rules of the game you’re playing.

3. Avoid Company Politics

Office Gossip Bullying Colleagues Whispering

Company politics are a fact of life in any organization, especially businesses. According to research published in Trends in Cognitive Sciences, the desire to climb the corporate hierarchy stems from an innate need for power and control found in all humans. As a consequence, cliques and factions arise, especially around those contending for the corner office. Participating in company politics is always a risk since being associated with the wrong side invariably leads to career setbacks.

Some years ago, I advised a newly hired CEO of a major public company, who had been brought in from the outside due to the board’s unwillingness to choose one of two senior vice-presidents vying for the position. Enmity between the two officers’ supporters was overt and destructive. Despite the reputations of the two rivals — both were considered highly capable in industry circles — the CEO replaced both men, sending a message to the remaining officers that results, not politics, would be the basis for future promotion. The executives lost their positions, and their perceived followers’ careers also stalled. If you want to get ahead, avoid unhealthy alliances and personal conflicts with other employees. Treat all people with respect and courtesy.

4. Get Noticed by Those Who Matter

Office Charity Volunteering Helping Team Work

It doesn’t matter if you’re an expert in a particular field if no one knows who you are. Companies are filled with nameless employees who spend years toiling in the trenches without recognition. To ensure you get the recognition you deserve:

  • Seek Employer Feedback. Many employees passively wait for their annual or semiannual employee reviews. Unfortunately, these reviews are often merely attempts to justify terminations or avoid lawsuits. Develop the habit of seeking feedback from your direct supervisor regularly, especially after every project. Take note of compliments and criticisms, modify your performance where necessary, and involve your boss in those efforts; your achievement reflects well on them.
  • Volunteer for Extra Work. Look for ways to make your superior’s job easier. Employees who help their bosses stand out become visible to other supervisors who may have opportunities as well. When you take on extra work, be sure you complete the assignment on time and as expected.
  • Participate in Company Activities. Being active in company social events, sports teams, and sponsored charities exposes you to more people who can help you on your climb to the top. Whenever possible, do favors for other employees without any expectation of a quid pro quo. Over the course of your career, you never know who might help you with a recommendation, introduction, or valuable advice.

When employing these strategies, be sure to proceed thoughtfully. They can easily be misunderstood by your superiors and resented by your fellow workers if done inappropriately. Remember, it’s important that your efforts be sincere and not viewed as attempts to fool colleagues or ingratiate yourself with a boss. To impress your superiors, seek to convey an attitude of selflessness, not selfishness.

5. Find Mentors

Mentoring Training Support Motivation Success Goal

Business mogul Richard Branson, the founder of Virgin Group Ltd., has said that mentoring is the missing link between a promising businessperson and a successful one. He advises that success takes “hard work, hard work, and more hard work. But it also takes a little help along the way.” Even geniuses need help now and then; in a letter to fellow scientist Robert Hooke in 1675, Sir Isaac Newton wrote, “If I have seen further [than other scientists of the time], it is by standing upon the shoulders of giants.”

A mentor is someone who has traveled the path before you, knows the ins and outs of an industry or organization and its people, and is willing to give you authentic, unvarnished assessments and advice. Mentors may be within or outside your own company. A good mentoring relationship can speed up your progress, smooth bumps in the road, and help you avoid the obstacles that can derail or destroy a career.

Finding a mentor is more than identifying someone you can exploit for their contacts and sponsorship. Mentoring is a two-way relationship, much like that between a pupil and teacher. Find mentors who recognize your talent, genuinely care for you, and expose you to other successful people. Don’t be afraid to ask for assistance and advice; the most successful people had help along their journeys, and many of them are willing to give back.

Consider having several mentors at once, much as a CEO works with a board of directors. In my career, I’ve been fortunate to have the advice of many wiser and more-experienced businesspeople. In most cases, our relationships spanned a lifetime — hopefully, a mutual pleasure, but certainly to my great advantage.

6. Nourish Your Network

Nurture Friendship Relationships Diversity Sitting

As you progress in your career, spending time at different management levels and possibly other companies, there are ample opportunities to make valuable business and personal contacts that may be helpful as time goes by. Unfortunately, most people jump from one position to another, eventually forsaking comrades of the past to embrace those of the present.

Apart from the lost emotional benefits of sustained personal and business relationships, career nomads squander the opportunity of their former colleagues’ advice and experience. President George H.W. Bush was well-known for the thickness of his Rolodex, a collection of acquaintances, friends, and business associates accumulated over a lifetime. He maintained his network through occasional favors, letters, cards, and phone calls. A significant factor in the elder Bush’s success was his ability to reach out for advice and assistance when needed. Many political observers credit the political success of George W. Bush to his father’s contacts.

Maintaining a network can be tedious and tiring at times, but the benefits more than justify the effort to stay in touch. Friendship is reciprocal. When it is possible to help someone, do so gladly, with no strings attached. Never burn bridges, and keep your relationships in good shape.

The value of a network grows as it expands and is nourished with thoughtful effort. The young woman sitting in the adjacent cubicle may be the CEO of a Fortune 500 company one day, while a golfing buddy may rise through the ranks of executives at your biggest supplier.

7. Put Your Best Foot Forward

Put Your Best Foot Forward Signs Light Bulb

Attracting attention for the right reasons is critical because promotions are not just the outcome of visibility, luck, or mentorship. If your work habits, capabilities, and track record are not exceptional, you’re unlikely to get the rewards you seek. A mediocre performance usually results in a mediocre career, so if you want to get ahead, you must bring something extra to the table.

Some people are extraordinary because they achieve an unlikely and unexpected result in a single instance — for example, the super-salesman who breaks a long-standing sales record, the engineer who designs a new product, or the production manager who significantly improves quality without cost increases. Other folks stand out from the crowd because they consistently deliver the goods every time without excessive supervision, delay, or histrionics; they’re the “no muss, no fuss” people supervisors can always rely on. Anyone willing to put in the work can stand out as extraordinary; it’s more a matter of attitude and effort than skill or knowledge.

8. Maintain an Optimum Skill Set

Businessman Solving A Maze

If you lack the minimum requirements to practice your profession, no mentor, connections, or experience can enable you to do your job. Depending on your field, there are likely to be minimum technical capabilities and educational benchmarks you must master to perform at any level, much less advance.

Also, specific management and personal skills are always in demand. Those who master these skills are the formal and informal leaders who can influence others and promote exceptional results. Examples of highly sought-after skills include:

  • Strong Communication Skills. As you progress up the management ladder, the ability to educate, persuade, manage, and motivate subordinates and peers is essential. Similarly, you must communicate expertly to superiors.
  • Social Competence. As you ascend in an organization, reliance upon and rapport with direct reports and superiors is essential. Those most likely to promote you are the ones whose careers depend upon your performance. Develop and practice the traits of steadiness, consistency, truthfulness, dependability, and charm.
  • Problem-Solving. Critical thinking — the ability to dissect a problem, identify root causes, understand relationships, and rationally assess likely outcomes — is a highly valued skill in every level of an organization. Critical thinkers can minimize the consequence of potential disasters and recognize overlooked opportunities. And like many skills, critical thinking is something you can learn and practice. For example, the University of Massachusetts’ decision-making process can teach you how to better control your emotions under stress. Through time and practice, these skills will become second-nature.

9. Recover From Setbacks

Try Again Set Back Success Dont Quit

Unless you’re the boss’s son or daughter, your career path is likely to be uneven, with periods of apparent stagnation and occasional failure. Setbacks can be self-inflicted or out of the blue, such as not getting a promotion or raise you expected, receiving a poor performance review, or the failure of a project you’re working on. Whatever the nature or cause, learning how to react to disappointment is critical to getting back on the right track.

According to a poll reported by Harvard Business Review, one in five employees who experience a setback take no personal responsibility and blame others for the failure. They also take too much credit for their successes. In their anger and disappointment, these employees are most likely to quit either on the job or formally, compounding the severity of the consequences.

My first job after I graduated from college with a degree in industrial engineering was with one of the largest farm equipment manufacturers in the world. My plant employed more than 3,000 workers, most of whom were members of the UAW labor union and therefore covered by a comprehensive bargaining agreement. Midway through my first year, I decided that union members in a particular department were circumventing work rules and costing the company over $1 million annually.

When I expressed my feeling to my manager, he disagreed with my conclusion and directed me to focus on my regular duties. Being young and confident I was right, I continued to pursue the project, ultimately producing a multi-page report complete with pictures and operating data.

Chafing under the previous criticism, I did not consult with my manager but sent my report over his head to the plant manager. I then waited for the accolades that were sure to come, perhaps an immediate raise or promotion. Much to my surprise, the reaction was an official black mark on my company record and a profanity-filled lecture from my boss. Like the 20% in the Harvard poll, I was sure my analysis was correct and that I had been treated unfairly. I left the company three months later.

After considerable self-analysis and feedback from friends and family, I realized that my actions had triggered the event and my inflated ego was the cause. Accepting that I didn’t know everything and regularly made mistakes was difficult to acknowledge but enabled me to become a better employee and manager in later years. From that early experience, I learned to limit my self-pity and disappointment and instead conduct a thoughtful analysis of disappointing situations: What went wrong? What were the causes? What had I done right? What had I done wrong? What steps could I take to avoid a repeat incident?

I apply a similar attitude to success, relying on the wisdom attributed to Winston Churchill: “Success is not final; failure is not fatal; it is the courage to continue that counts.”

10. Know When to Change Course

Change Chance Career Explore Dice Letters

Unfortunately, there may be times when circumstances dictate a new beginning or company. The trigger might be an unexpected call from a headhunter offering a promotion and a substantial raise, or when those most familiar with your work overlook your capabilities or achievements. You may be in a situation where corporate history dictates promotion policies that aren’t to your benefit. In such cases, your best alternative may be to seek opportunity elsewhere.

For example, I left a comfortable position with a Wall Street firm to become the chief financial officer of a technology firm, which I subsequently guided through a national public offering and several mergers and acquisitions. I returned to Wall Street finance after several years, becoming a specialty product manager with a regional investment boutique, a position that would have been unavailable without my time as a CFO. These combined experiences enabled me to form an oil and gas exploration firm and accomplish a multi-million-dollar public stock offering before age 35.

11. Be Patient

Patience Long Road Ahead Horizon

Ambition is a double-edged sword. Brandished with reason and restraint, it can spur you to efforts and achievements you never dreamed possible. However, when unfulfilled, it can leave you feeling bitter, empty, and alone.

As a young man in a dominant Wall Street firm in the 1960s, I hungrily sought promotion into office management. In those days, conventional wisdom was that employees under the age of 35 lacked the experience and composure to successfully manage a retail brokerage office, especially with older representatives who had more experience.

Frustrated with a policy that seemed antiquated, I resigned from the firm and sought employment elsewhere. As a consequence of my departure, and that of others from the training programs, the firm changed its policies — to the benefit of my more patient former colleagues who had stayed put. In the two years following my resignation, many of these colleagues were promoted to office management with higher salaries and benefits before the age of 30. By Wall Street standards, their rise in the ranks was unprecedented.

Career progression rarely occurs as quickly as we would like, and big companies have big bureaucracies that sometimes react slowly. However, the best-managed organizations, regardless of size, do ultimately correct their course. Exhibiting patience early in your career can pay off significantly later on.

Final Word

While several skills are necessary to climb the corporate ranks, the best thing you can do is to take responsibility for your own career success. You have a significant number of competitors, many of whom are just as — if not more — qualified for a promotion. If you want success, you have to go after it. Be patient when patience is justified, but don’t be afraid to seek greener pastures when necessary.

Critical turning points occur throughout a person’s life and career. The decisions you make — or don’t make — can have lifelong impacts on your career, happiness, and fulfillment. Fortunately, few decisions are irreversible, so a single mistake doesn’t define your life or limit your future opportunities. Be bold in setting your goals and resilient when setbacks appear.

How do you intend to climb the corporate ladder? What have you done to get to the point you’re at currently?

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Six Questions to Ask Yourself Before Applying to Grad School

Sallie Mae’s inaugural report delving into how Americans pay for graduate school revealed that a mere 12% of students base their decision to pursue an advanced degree on the cost.

While many students who participated in the study said they view graduate school as an investment in their future (and quite often it is), that statistic is particularly startling considering the record levels of student debt in this country (around $1.5 trillion at last count).

It’s also somewhat concerning in light of the fact that a graduate degree in many professions doesn’t guarantee an increase in one’s salary. Sallie Mae found that nine in 10 graduate school students believe the additional degree will translate into improved earnings, but in reality a salary increase depends largely on the profession chosen.

“Enrolling in graduate school is a huge decision, which can alter the course of your life and career — often for the better, but not always,” says William Lipovsky, CEO of the consumer information website First Quarter Finance. “Though a master’s degree can increase your skill level and earning potential, it’s also a costly venture and a financial risk.”

For all of these reasons and more, it’s important to ask yourself some key questions before signing on for graduate school and the mountain of debt that often comes along with that decision.

What’s the Total Cost of Going to Grad School?

It should go without saying that the tuition associated with obtaining an advanced degree is merely part of the cost of attending graduate school.

To get a truly accurate picture of what the entire experience will set you back, it’s a good idea to conduct a comprehensive analysis of all the expenses associated with pursuing the additional degree.

For Camilo Maldonado, who at 26 years old decided to obtain an MBA from Harvard University, the program itself cost $185,000. “But if you factor in the fact that I left my job, since I was in a full-time MBA program and didn’t work for two years, the total jumps to nearly $400,000, including my lost wages,” explained Maldonado.

Calculating the full cost of attendance is a critical part of determining whether you can really afford the school you’re considering, as well as whether obtaining the degree is a sound financial decision. To fully resolve these questions, however, you’ll need to do some more legwork.

Will This Degree Boost My Salary Enough to Pay Back My Student Loans?

According to Sallie Mae, 53% of students attending graduate school pay for the experience with loans. Maldonado, for instance, obtained about $57,600 in financial aid and took out loans for $120,000.

Before following a similar path, research how much you stand to make in your chosen field of work, says Lewis Goldman, of LendKey Technologies, which helps community banks and credit unions source student loans online.

There are numerous websites that provide specific salary data broken down by profession. Glassdoor, PayScale, and Monster are a few examples. But you can also just Google the salary for the profession in question, said Goldman.

The goal is to find out if you’ll be bringing home enough money to pay back your loan in a reasonable amount of time. Goldman suggests a fairly well-known rule of thumb: Don’t take on more debt than you stand to make in one year’s salary.

Why this particular benchmark? Because between interest and principle, if you’re paying 10% of the student loan each year, you can pay off the debt in 10 years or less as long as it’s less than your annual income. If the total debt exceeds your annual income, you’re likely to struggle to make loan payments and may need to extend the repayment term.

In other words, choose the degree and profession you’re investing in wisely.

“It will obviously depend on the degree, but clearly based on our data, those with STEM degrees are going to be in much better position to pay off student loans and get a better return versus people with other degrees,” said Goldman. “I would be careful if you’re considering human services and counseling degrees or museum studies, such as curator. Ultimately those are not career paths where you want to accumulate a lot of debt.”

Will I Be Able to Graduate?

There are many reasons one might start pursuing a graduate degree and ultimately not complete it. Perhaps a family member falls ill and requires care, causing the student to drop out. Or maybe the student discovers the degree program or field itself isn’t right for them.

These sorts of possibilities should be carefully weighed before diving into a graduate program of study, advises Patrick Mullane, executive director of Harvard Business School Online, who points out that only 61% of students who begin a master’s degree actually complete it.

“Consider some worst-case scenarios – is there a chance you won’t finish your degree? This is a very important question,” said Mullane. “Students who don’t complete a degree still incur student debt. That’s the worst place to be – you don’t get the benefit of the graduate degree, but you have all the burden of a student loan. If you’re not sure about it, take your time and be sure to do your homework so you have a good idea if it’s worth it.”

Why Do I Need This Degree Right Now, and How Will It Benefit Me?

Granted, this is really two questions, but they’re closely related. And the “benefits” in this case aren’t just monetary, which we’ve already discussed. Sometimes an advanced degree can open doors that may otherwise remain shut.

Timothy Wiedman, a retired associate professor of management and human resources from Doane University, suggests that if you’ve been job hunting for quite some time and been told by prospective employers that a graduate degree would help your candidacy, then it may make sense to invest in advanced education.

The same logic applies to the question of how you might benefit from such a degree. “Perhaps the career field you’ve chosen really requires graduate coursework,” says Wiedman. “Or you want to work for a Wall Street firm, and these days they almost never hire anybody who doesn’t have an MBA.”

What Is the Value of the Institution I’m Considering?

Where you go to school does matter. It’s not fair, but it’s a reality, at least according to Mullane.

“It doesn’t mean that the Ivy League is the only option. But it does mean that paying a king’s ransom to go to any school no matter its brand reputation is probably not prudent,” he explained. “If you can’t go to a top-tier university, your state schools may be the best bet.”

To help determine the value of the schools you’re considering, do some research (this grad school tool from US News & World Report is a good place to start). Also consider asking for input on a prospective school from professionals in your field or your undergraduate career counseling office.

Where Will I Live After Graduation?

One last bit of advice: Think about where you plan to live after graduating with your shiny new degree. This is important because degrees are surprisingly regional, says Mullane.

“Networks of graduates tend to cluster in the towns and cities around a university. And networks are what might matter most when it comes to job hunting,” said Mullane. “While it shouldn’t be the single deciding factor in where you go to school, it is an important consideration.”

Mia Taylor is an award-winning journalist with more than two decades of experience. She has worked for some of the nation’s best-known news organizations, including the Atlanta Journal-Constitution and the San Diego Union-Tribune. 

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The pros and cons of becoming a rideshare driver

With so many possible side hustles available in today’s gig economy, how do you decide which to choose?

Today, I want to make the case that driving with for a rideshare company is a plausible choice for several reasons. But there are also some major distractions that you should be aware of before signing up.

My name is Josh Overmyer. I’ve completed over 2900 rides as an Uber/UberEats driver-partner since 2014. I know what you’re thinking: “That’s a lot of rides!” It is. And I’ve learned a lot in that time.

Here are my biggest takeaways from four years as a rideshare driver.

The Pros of Becoming a Rideshare Driver

Here’s the good news. You likely already have the knowledge and equipment necessary to be a rideshare driver!

Josh Overmyer's Uber ProfileAll of these services are app-based and run on a smartphone, by drivers like you who successfully navigate their communities daily. You probably already know where the popular hang-outs are located, how to get around on your city’s streets, and maybe even alternate routes when roads are backed up.

The particulars of the vehicle will change depending on which service you’re signing up to drive for. But for passenger trips, you usually need a four-door vehicle, while food/parcel delivery may be possible with a two- or three-door car. (Drivers are subject to a criminal background check and a driving record check.)

As with any independent contractor gig, the amount and timing of the hours you drive are completely up to you, within regulations.

  • Some people will be comfortable driving the late-night crowd, which can be lucrative for rideshare drivers because of increased demand when passengers may have been out drinking.
  • Other drivers may stick to daytime hours and handle a more business-like crowd of people heading to/from jobs, doctor appointments, church, the grocery or the airport. Since your pay will generally be influenced by the number of trips you complete, when you need to make more money, you’ll probably want to drive more hours.

Some of the networks now allow the driver to set a destination and get trip requests heading in the same general direction. This helps you to maximize both your time and mileage driven for the maximum possible gain, since you’d be driving those miles with or without a rideshare app running on your phone, such as your daily commute or when you are running errands.

Speaking of maximizing time and costs, driving rideshare could allow you to turn certain everyday life expenses into qualified business expenses.

As I mentioned above, you’ll need a smartphone with a data plan, which you probably already have. Now it could be a deductible business expense! Miles driven or other driving expenses could be deductible as well, but you’ll need to keep meticulous records.

The Cons of Becoming a Rideshare Driver

There are some downsides to becoming a rideshare driver.

  • Simply driving with a rideshare company means extra wear and tear on your vehicle. Every additional mile you drive is one less mile that your car will last over the long-term.
  • Extra driving means more fuel costs, more wear and tear of consumables such as tires & brakes, and you’ll need more frequent oil changes.
  • As a result of all these extra costs and wear on your vehicle, you may face the additional cost of replacing your vehicle sooner than you had previously planned.

A good way to think about rideshare is that you are force-depreciating your current vehicle, which is to say you are extracting value out of your current vehicle to hopefully put money away for your next replacement vehicle.

Here’s another thing to consider: inviting total strangers into your personal vehicle.

Josh Overmyer as Uber driverFrom my experience, most passengers will be normal, everyday people just going about their lives: trips to school or work, to the grocery store, church, or to the airport (or beach in my community). But they are still complete strangers, getting into your personal space, and often strangely sitting right behind you, the driver. It can be creepy!

Even worse are the strangers getting into your car who are not on their best behavior. Some are simply loud and obnoxious, and you get used to that from the young twenty-somethings. Some have spent hours at a cigar bar and reek of cigar smoke that permeates your car’s interior and the smell can linger for days.

Worse yet are the drunks who can’t handle their liquor; sometimes you’ll be lucky and they’ll give you enough warning to pull over to the side of the road — but other times they’ll make a mess in your car.

You might have read the last two paragraphs and decided that you don’t want to deal with unruly passengers but would still like to run a side business doing food or parcel delivery.

I’ve delivered some food orders with Uber Eats, but I ended up with very smelly foods that would stink up my car just before a typical passenger Uber trip, and I had orders that included ice cream or milkshakes that weren’t sealed properly by the restaurant, resulting in a sticky mess.

I had a trip that took me upwards of 40 minutes to complete from the time of food pickup to delivery because the restaurant didn’t have the food ready and the recipient’s phone was dead, and for my troubles I made $6…before costs.

Also remember that you’re purposely placing yourself in traffic, which we all hate.

Not only do you sit there idling, wasting time and fuel, but it drives up your blood pressure and stress. You’re also more likely to get involved in a fender-bender when there are more vehicles on the road, and when you are rushing to a pickup or trying to find a convenient parking spot near the food establishment, so you don’t waste too much time circling the block.

Even when you aren’t in bumper-to-bumper traffic, you may experience eye strain from constantly searching for obscure addresses or watching for pedestrians in congested areas such as downtown, at concert venue, or in entertainment districts. Combined with low-light situations, this makes you more likely to end up in an accident.

The Bottom Line

That’s a long list of pros and cons. After all of that — and after four years of driving rideshare — what’s my overall impression of this side hustle?

Rideshare is a pretty easy gig to get started in — but it won’t make you rich, despite what the radio and TV commercials were telling us all a few years ago. After all operational costs are considered, almost anything else you could think of trying would pay more!

That said, rideshare driving could be a good fit for someone in a temporary cash crunch and who isn’t worried about the longer-term impacts to their transportation budget.

As for me, I stopped driving rideshare after I got a new higher-paying day job last year. If you’d like to read more about the ups and downs of my 2,900+ trips as an Uber/UberEats driver-partner, check out the three-part series about my first side hustle, and why I ultimately decided to quit.

Author: Josh Overmyer

Josh is a single guy is his mid-30s and a veteran of rideshare, with 2,882 Uber and UberSelect trips completed since 2014. He lives and works in Southwest Florida, and writes about personal finance, travel hacking and his investing failures at

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