5 Ways To Start Investing With Less Than $1,000

The following is a guest post. Enjoy! 

There is a common misconception that you have to have thousands and thousands of dollars to start an investment portfolio, but that couldn’t be further from the truth. There are dozens of ways that you can start investing with $1,000 (or less). It’s important that you start investing for your future, but if you’ve never gotten in the investment waters, it can be a scary jump to make. Luckily, there are several simple ways that you can put your money to use.

 

Betterment

If you’re looking for a simple investment that you can make, without having to pour over different graphs and reports to decide which investment is the best option, then Betterment could be an excellent choice. Betterment is the better choice for anyone that is looking to set it and forget it.

With Betterment, all you have to do is create an account, set your goals, and start investing. After that, their robo-advisors will invest your money based on your risk preference and goals. They will even continue to reinvest your money as you make it, which means that all you have to do is sit back and watch your money grow. You can easily start investing with $1,000 and not have to worry about making the wrong choice for your money.

 

Motif

Maybe you want a little more control of how your money is invested, then Motif is another excellent option. Motif is an excellent website that allows you to purchase 30 stocks of companies that all revolve around the same idea. For example, you can buy 30 stocks in business that all deal with medical technology.

There are several advantages to Motif, but the most notable is that the trading fees are going to be drastically lower than any other brokerage that you’ll find. Motif allows you to invest in the industries that you want, without having to pay the massive fees.

 

Pay off Debt

Most people don’t see paying off debts as a form of investing, but it could be the best option for you $1,000. If you’ve got credit card bills or lingering student loans that have been hanging over your head, it’s vital that you pay those off as quickly as possible.

The amount of money that you’ll pay in interest will hinder the amount of money that you can invest. Use any extra money that you have to pay off those debts, then all the money that you save can be invested.

 

Save for College

If you have kids, you may not be thinking about sending them off to college yet, but that could be the perfect use for your extra dough. If you didn’t know, college is expensive. Very expensive. It’s important that you start saving as early as possible.

There are several ways that you can start saving for your children’s college, but the best way is to open up a 529 Plan. These are special accounts that you can put the money in, but you’ll get several tax advantages as long as you use the money for any college expenses.

 

Set it Aside for a Rainy Day

You never know when something is going to break or need replacing. If your water heater were to go out suddenly, or your car broke down, you probably wouldn’t have the money that you needed to pay for that bill, but setting aside the $1,000 is a simple way that you can invest in your future. That’s a great way to have a rainy day fund, which can prevent you from having to use a credit card for any sudden bills that you run into. It’s not the most exciting way that you can “invest” your money, but investing in your future by having a safety net is one of the wisest things that you can do with your money.

 

Investing $1,000

These are only a few of the hundreds of different ways that you can put your money to work. It’s vital that you make the best decision for you and your money. Investing is going to be the foundation for your future and the security of you and your family.

Take the time to look at all of your different options and decide which one is going to work best for you. It can be scary investing your money because of the horror stories, but thanks to the Internet, investing your hard-earned money has never been easier.

***Photo courtesy of https://www.flickr.com/photos/gotcredit/33502814980/sizes/l

Smart Money Management vs. Cheapness: The Eternal War

The following is a guest post by CM at Infinite Transcendence. Enjoy! 

Which Side Are You On?

People are often big on saving money since budgeting is a major part of life in your personal life and in business.  With poor money management, even the richest person can become poor very quickly.  There are countless stories of people with money going broke, and our country is a debtor nation.  Clearly, we need to spend and utilize our resources wisely.  The average person has student loans, car loans, mortgages, and a manner of other expenses.  Controlling these wisely is essential to living a life of freedom.

The difference comes down to how people choose to manage their money.  A few people manage their money from an overall cost evaluation while others simply cut down costs as much as possible no matter the expense.  Today, I’d like talk about the major difference between effective money management and being cheap.  This is something, when done properly, will make a major difference in how you live your life.  You will essentially increase your productivity while reducing costs.  That’s why smart money management is important.

 

What Is Cheapness?

Cheapness and effective money management are two different things.  Some prefer to use the word frugal to describe wiser money management.  I prefer the term smart money management because it looks at other factors outside of simple dollar and cents costs.  An individual who is cheap is someone who values monetary cost above all others.  They’ll waste immense amounts of time, comfort, energy, and sanity just to come ahead a few pennies.  They’ll drive clear shot across town to save a few pennies on gasoline.  Nothing is ever irrational if it’ll save them a few dollars, even if the cost is countless hours of frustration afterwards.

Have you ever:

  1. Bought food that was expired just to save a few dollars?
  2. Spent lots of time arguing over a minor price difference just to save a few dollars even if it meant burning a few bridges?
  3. Sacrificed quality to an extreme level to get minor savings?
  4. Massively inconvenienced yourself for a good deal: i.e. sleeping in front of a store for a weekend just to save on some item?
  5. Gone without something you really need for a long time because you simply didn’t feel like paying the price?
  6. Given up a lot of time, convenience, and quality in any other way in a disproportionate way compared to the cost?

These types of activities will only ensure that you end up further behind when it comes to building wealth and intelligent financial management.  People who want to succeed at not only managing money effectively but also in terms of building wealth will avoid this behavior like the plague because it only ensures that you’ll expend more time than what your money is worth.  Time is far more limited than money and people who want wealth are cheap with time.  Treat your time and your energy sacred.  You’ve already traded it once to make the money.  Don’t trade it again being cheap.  You’re then spending a multitude of time for a minor savings benefit.

 

The True Cost of Cheapness

People don’t look at the true overall cost of being cheap.  I have known many people who will indeed drive across town to save gas, or go through other extreme lengths to save a dollar.  One situation I remember with my own family was when we were moving.  Instead of paying for a larger U-Haul truck and hiring some extra help, they wanted to do it without help on a smaller truck.  It took around 7 trips and 4 trips on two smaller trucks to get it done.  What should have been a day or two job ended up taking several days.  This time could have been spent putting the items in the house or relaxing and using the time on something more fulfilling.

I had another friend who just used their cars instead of U-Haul and it took them an entire week!  They would have been better off hiring the help.  These things often come up in business where the time it would take to do something would be better off spent being subcontracted so that you can focus on the things that will generate you the most business.  It’s the principle of working “on” your business and not in it”.

Another negative is using cheap or inadequate tools.  This can easily run you in the red because you’ll have poorly done work or you’ll end up with sub-par equipment or machines that can fall apart on you.  This can even put you in risk in certain situations.  Many people have been harmed or killed due to machine malfunctions.  In most cases you’ll end up spending a lot of money fixing problems that could have been fixed the first time.  A $1000 job ends up costing $5000 because you tried to cheap out and spend $500.  Compounded with the time cost this is just not an effective way to manage your resources.

 

Avoiding Cheapness In The Future

Here are some ways to avoid cheap behavior in the future:

  1. When making a purchase decision whether its’ a product or a service, analyze the true cost of everything. Time, money, frustration, and time spent fixing problems again should all be analyzed.
  2. Think buying time instead of strictly saving money.
  3. Hire people when you can. That time could be used to increase your productivity elsewhere. If you can hire someone for a job that’s $50 that takes them 7 hours, is it worth it to do it yourself when you make $20 an hour?  You’re paying yourself a low wage to do the work in this instance.
  4. Use quality tools whenever you can. It saves time and you don’t have to replace them as often.
  5. Use quality parts when doing repairs. Nothing is worse than nickel and diming yourself over cheapness.
  6. Look at freeing yourself up. This means having the time to do the things you enjoy in life.

Following these tips should launch you ahead in managing your money and time resources adequately.  Simply remember with wealth management that time is a major factor as well as money.  Don’t squander your time for meager financial savings.  You’ll find that you end up digging yourself deeper into the hole.  Go out and start budgeting wisely today!

***Photo courtesy of https://www.flickr.com/photos/76657755@N04/7408506410/sizes/l

4 Questions to Ask Yourself Before Buying Your First Rental Property

The following post is by MPFJ staff writer, Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

There’s a certain appeal about owning and managing rental properties as a source of semi-passive income. Brick and mortar book stores, online websites and late night infomercials boast a luxury life where rental property owners do very little work and spend all day cruising around in their yachts, heading off to exotic destinations while the money just magically appears in their bank accounts.

The truth about rental property ownership is that there’s a little more to it than just buying a house and collecting rent checks. Before you jump into purchasing a rental property, it might be a good idea to ask yourself some questions such as the ones listed below.

 

Do I Thoroughly Understand How the Rental Property Business Works?

Before purchasing a rental property, it’s smart to educate yourself on how the rental property business works. What are the laws regarding tenants and evictions? What responsibility does a rental property owner have in terms of keeping the property in good condition? How can a property owner proceed legally if rent isn’t paid?

There are many legal and financial obligations surrounding rental properties that you should know about before jumping head first into this popular business venture. Checking out books by experts on the subject and reading past the benefits and discovering the risks will help ensure you don’t go into rental property ownership with rose-colored glasses or without an understanding of what your legal rights are – and what the legal rights of tenants are.

 

Does the Property Make Financial Sense to Purchase?

In other words, does the property “cash flow”? Will the property net you an income each month after the mortgage and taxes are paid, and additional money is subtracted for potential repairs and to cover potential vacancies?

One mistake many first time rental property owners make is that they buy a property based on potential appreciation of that property and don’t consider the cash flow aspect. However, assessing the cash flow potential of the property will help you avoid getting into a situation where a rental property is costing you money instead of making you money.

As you assess the price and maintenance costs of a property, it’s a smart idea to balance that with average rental costs in the area the home is located in so you have a good idea of what a reasonable monthly rent expectation is. Knowing what rent you can expect for the location, size and condition of the property will help you better determine whether or not the property will cash flow. If it won’t, you might want to offer a lower bid or avoid the property altogether.

 

Do I Understand the Financial Responsibilities of Purchasing/Owning the Home?

Purchasing a rental property will cost money out of your pocket if you don’t have an investor waiting in the wings to cover the costs. Most mortgage lenders require 20% to 25% down on rental property purchases.

Also, many properties require upfront repairs and modifications to make the home ready for tenants. If the home has a homeowners association (such as a condominium or townhome) there will be monthly HOA costs and potential larger costs for replacement items such as roofs. And let’s not forget the aforementioned vacancy costs and home repair costs. If the home is vacant for any length of time, the monthly mortgage payment on the property comes out of your pocket.  If the water heater goes out, you as the property owner are responsible for paying for a replacement.

Knowing all of the financial responsibilities before you buy will help you be prepared to shell out the cash needed to buy and maintain the property.

 

What’s My Plan if I Discover Rental Property Ownership Isn’t for Me?

Many investors have bought into the real estate rental game only to discover they weren’t cut out for the business. If that happens to you, what is your plan? Will you have a rental management team take over? If so, how will that cost affect your bottom line? Will you sell to another investor? If so, how will realtor’s fees and closing costs affect you financially?

It’s good planning to have an exit strategy mapped out before you purchase your first rental property so that you can work to absolve yourself of the property with minimal financial and other ramifications.

Rental property investments can be a great way to grow your wealth, provided you know what you’re getting into before you buy that first property. Spend plenty of time educating yourself on the ins and outs of rental property ownership before you invest, so that your experience as a real estate investor will be a good one.

How about you all? Do you think owning a rental property would be right for you?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/gold-beach-real-estate/4641338334/sizes/o/

Berkshire Hathaway Shareholder Discounts

The following post is by MPFJ staff writer, Marie. You can read more of Marie’s articles over at her own blog, Family Money Values. Enjoy! 

After I started blogging at Family Money Values, my research led me to discover the “Woodstock for Capitalist” – the annual meeting of Warren Buffett’s Berkshire-Hathaway company.

 

The meeting.

To my knowledge, this is the only shareholder meeting that offers not only a chance to vote on proxy items in person, but also access to the ‘sage of Wall Street’ and his side kick Charlie Munger as well as a chance to glimpse some of the board members, including Bill Gates.  Buffett and Munger (he is a riot by the way) host a question answer period to a jam packed convention hall for most of the day.  The actual meeting typically lasts less than an hour.

There are dinners, a chance to mingle the night before with other shareholders, a 5k run, a huge exhibition hall and multiple shareholder discounts.

Eager to see the spectacle, I bought B shares of BRK stock in 2012.  Unlike the A shares (which as of 5/2/17 were valued at about a quarter of a million dollars per share), the B shares were only around $112 per share.

That first year, my spouse, my two grown sons and I drove to Omaha and spent the night so we could get to the meeting in time to see the movie.  The hotels were booked as early as January but we managed to get two rooms in a not so nice hotel at a price I could stomach.  We drove to the meeting in the morning and made it in time to see the starting movie – from the nosebleed section of the hall.  It was sort of a funny movie, with a lot of subtle and not so subtle advertising for Berkshire companies.

It was interesting seeing and listening to Buffett and Munger and hearing the questions folks came up with.

For lunch, the food vendor stalls in the hall are open and doing a brisk business.  We ate standing up as their were no empty seats.

Later, we strolled down to the exhibition hall and looked around.  There were some pretty good discounts (we bought a couple of knife sets) and then there were things that still seemed a bit too expensive (like the See’s Candy)

We didn’t take advantage of the 5k run, the reception on Friday at Borscheims, the steak dinner for shareholders (you still have to pay) at Gorat’s, or compete with Buffett in the Newspaper throwing challenge.  Nor did we get over to the Omaha Nebraska Furniture Mart or the Borscheims – where even more shareholder discounts were said to occur.  We did ride over to see the Netjets planes at the hanger.

Each year since, my spouse and I have attended the meeting – driving up the morning of it.

As the meeting attendance has swelled over the years, straining the area resources (hotels, convention room etc), the Berkshire folks have made some adjustments.

Last year, they initiated a live stream of the Saturday meetings.  If you are interested you can view that on Yahoo Finance https://finance.yahoo.com/brklivestream/

 

The discounts.

This year, Berkshire-Hathaway opened up the shareholder discounts to include all locations of the Nebraska Furniture Mart – NFM –  (Omaha, Kansas City and Dallas-Fort Worth), instead of limiting the discounts to the Omaha store.

I was excited about this one as we live near one of the other stores and was hopeful that the discount amounts would be significant, since we had gotten some good deals in the exhibit hall.  So, as soon as our proxy material arrived, with the form to fill out to receive shareholder credentials (which you need to get into the meeting and to get the discounts), I sent it back and got our max of 4 credentials in the mail.

The discounts run for several days prior to and throughout the weekend of the annual meeting. Yesterday was the first day of the NFM discounts so I geared up and went shopping to check them out.

As I had never been and couldn’t find any information online, I had no idea about what to expect.  Would they be limited to certain items?  Would the discounts be a set percent?

As soon as I entered the store, I asked the first person encountered how the discounts worked.  Unfortunately, that person was a security guard and didn’t have much information.  But he did tell me that I should talk to a sales person.  The appliance section was near (NFM at this location is huge so distance mattered!) and I quickly found a salesman to help me out.  Here is what I found.

The discounts are embedded inside the store’s database, not displayed anywhere.  You have to find an item in which you are interested, scout out a salesperson (who is usually on commission), show him your credential and ask him what the discounted price is.

Alternately, if you are the actual shareholder, you are in that database too and you can call in to check on prices and make an order.

 

Examples of the underwhelming discounts

So, I checked out some of the items I’m interested in obtaining to see what kind of discount they had.

I was underwhelmed, to be honest.

  • Samsung washer – manufacturer suggested retail price of $899, sale price to any shopper that day at NM of $643, and BRK shareholder discounted price of $630. Hmmm only $13 less than anyone else.
  • Samsung matching dryer – same prices as the washer.
  • GE black basic refrigerator freezer with ice maker – manufacturer suggested retail price of $994, no sale price to any shopper that day, BRK shareholder discounted price of $974.12 – only discounted $19.88.
  • Wood swivel counter height stool – regular NFM price of $159, discounted for shareholders to $127. While this was a better percentage than the appliances I checked, it was nowhere near the 30% off I had dreamed about.
  • Upholstered swivel counter height stool – regular NFM price of $369, discounted for shareholders to $295.

While it is nice to get a shareholder discount, the process used and the seemingly small percentage off what others pay was discouraging and time consuming.

Still if you are buying something anyway, and have access to shareholder credentials, it is worth checking out.  Who knows, maybe other merchandise was discounted at a higher percentage.

I have enjoyed going to the meetings and hearing first hand from the sage, but even better has been the growth in share price of BRK-B (which was at $166.65) as of the last quote – a rise of $54.65 per share – gee, which I had bought more!

Discounts aren’t everything. How about you all? Have you encountered any underwhelming discounts recently?

***Photo courtesy of https://www.flickr.com/photos/132053576@N03/17063139357/sizes/l

How to Throw a Fun Yet Affordable Graduation Party

The following post is by MPFJ staff writer, Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

Summer is around the corner, which means families everywhere will be getting ready to throw high school and college graduation parties. If you’re preparing to throw a graduation party and have been talking to parents of other grads, you’re likely beginning to prepare to spend a LOT of money – or panicking about how a graduation party will affect your family finances.

The good news is that a great graduation party doesn’t have to be super expensive. Abandon thoughts of catered dinners and expensive decorations, and consider these ideas for a fun yet affordable graduation party.

Share Your Party

If your graduate has a best friend, family member or significant other who is also graduating, consider doing a shared graduation party. Not only will you be able to split the costs with the other family, but many of your guests will probably know both graduates and will likely appreciate having to only attend one party as opposed to two.

Cut Down on Equipment Rental Costs

It can be expensive to rent party tents, chairs and tables. A cheaper idea may be to rent a local park pavilion or to hold the party at the home of a friend/family member who has a large garage where most guests can be indoors without the need for a tent. Borrowing tables and chairs from family and friends can help cut down on costs there. Since the tables will be covered with tablecloths anyway it doesn’t matter much if they don’t match.

Keep a Handle on the Food Budget

There are several ways you can make sure the food budget for your graduation party doesn’t get out of hand.

Choose Your Party Time Carefully

Know that time of day makes a difference. If you hold your party at lunch time (between 11 a.m. and 1 p.m.) or dinner time (between 4 p.m. and 6 p.m.) people will expect a full meal. However if you hold the party during midday hours, you can get away with serving a lighter assortment of finger foods and appetizers.

Don’t Do the Catering Thing

Catering is often the largest expense for graduation party holders, but it’s not always a necessary expense. Choosing foods that are inexpensive and easy to prepare, and asking for help from close friends and loved ones will help you save substantially on food costs. Here are some ideas for easy-to-prepare and serve, inexpensive foods.

  • Go to the warehouse club for maximum savings. They have great specials on deli meat, or if you really want to save you can get pulled pork for about $2 a pound and throw some BBQ sauce on it.
  • Inexpensive salads. Again, the warehouse club is your friend here. They sell pastas, lettuce and other veggies at amazingly low prices and huge quantities. Look online for salad recipes that are inexpensive yet delicious.
  • Potato and other chips may not be an adult favorite but kids love them. Warehouse clubs and stores like Aldi sell chips for super cheap.
  • Fruit and vegetable trays. Instead of buying already prepared fruit and veggie trays, shop at the warehouse club or Aldi and recruit a couple of friends to help you put together a nice array of fruits and veggies along with some store bought dips.
  • Warehouse clubs such as Sam’s Club and Costco sell delicious half and whole sheet cakes for amazingly low prices. You can usually get a whole sheet cake for under $40. If you don’t want to go the cake route, have close friends and family members contribute a plate of bars or cookies and have a dessert buffet instead of cake.
  • Lighter fare. If you’re doing a midday party you can get away with deli sandwiches cut into triangles and an assortment of veggies, fruits and chips.
  • Instead of serving sodas, choose to make punch with any combination of lemonade or Koolaid and add in lemon lime soda or Ginger Ale. Much cheaper, and different too. People drink soda often but rarely get to indulge in punch.

Invitations

Technology has made it very easy to do your own graduation party invitations, either on your home computer system or at a DIY photo system like the ones at Walmart. With pre-made templates to choose from, creating your own invitations will be cheap and easy.

Decorations

Decorations don’t have to cost a lot of money. Consider these ideas for a beautiful but frugal graduation party.

Tablecloths

Buy tablecloths at the dollar store in your child’s school colors for a colorful but inexpensive addition to your party.

Table and other Decorations

Instead of buying table centerpieces, use photos laid on tables or arranged nicely around the area, or use other items from home that reflect your child’s interests and talents. Books arranged nicely with ribbons work well as decorations too.

You can also decorate using your food choices.  Check out this Pinterest board for fun but easy ideas such as Diploma Cookies and Graduation Hat Pops.

With a little creativity and work, your child’s graduation party can be fun without draining your bank account.

A Word about Your Home’s Appearance

If you’re having your child’s graduation party at home, you may feel like you’ve got to remodel and redecorate and have your home looking picture perfect for the party. Know that cleaning, decluttering and a few inexpensive home enhancement decisions like a fresh coat of paint and a few flowers can go a long way. No need to remodel your entire home to impress people for one day. On the other hand, if you’ve been meaning to remodel anyway and have the cash on hand, an upcoming graduation party can be a great excuse to finally get it done.

How about you all? What are your tips for saving money on graduation parties? Do you have any ideas for inventive graduation gifts? 

Share your experiences by commenting below!

****Photo courtesy https://www.flickr.com/photos/attercop311/3092138753/