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Buying a Home Just Got Easier

October 3, 2015 by Zero Gravity Financial, LLC

If you have ever bought a home, you know the stress and confusion of the mortgage process. Since its inception 4 years ago, the Consumer Financial Protection Bureau have been working to make the process of buying a home an easier and more transparent. The new mortgage disclosure rule is in effect as of today- October 3, 2015.

 

The Know Before You Owe Rule details:

  • Four overlapping disclosure forms will be streamlined into 2 forms, the Loan Estimate and the Closing Disclosure.
  • More time to review your closing documents. You will receive your Closing Disclosure three business days before you sign the forms and accept the terms of your mortgage.
  • New forms will make it easier to understand complicated mortgage terms.
  • The Loan Estimate makes it easier to shop around and compare loan offers from multiple lenders. Consider applying for loans from at least three lenders before choosing a mortgage so you can find the best deal for you.
  • The three days required between getting your Closing Disclosure and signing on the dotted line allow you to make sure there aren’t major changes from the deal you were offered on your Loan Estimate. It also gives you time to ask your lender all the questions you might have about the terms of your mortgage and consult with a lawyer or housing counselor.

The CFPB have also released “Your Home Loan Toolkit,” a great resource full of worksheets, checklists and information, making the process of purchasing a home easier.

Filed Under: Real Estate

How much money you need and how to get started investing

August 31, 2015 by Zero Gravity Financial, LLC

Control Panel

 

I am an active contributor on NerdWallet and WalletHub and see many questions about how to get started with investing and how much money you need to do it. First, most trading firms require a minimum of $500 or more to open an account, though there are a few that have no minimum. Second, you should figure out the type of trading that you want to do. Let’s take a look at your choices.

1-Online Brokers

If you are interested in the traditional method of portfolio management, you should select an online broker that offers the features that you want in addition to providing a low-cost self-directed trading account. A few important features to look for:

  • Account Minimum – make sure that you have enough money saved to open an account or choose an online broker with no minimum.
  • Commission Per Trade – $10/trade or less. If you are planning to trade more frequently than just quarterly rebalancing, this feature may be more important to minimizing your overall costs.
  • Commission-Free ETF Trading – some online brokers offer 80 or more commission-free ETFs, so look for this feature if you are interested in owning ETFs.
  • Research – if you are an advanced trader or would like to spend your time learning about investing, look for top rated trading software, research reports and real-time data.
  • Promotions – offers include free trading the first 60 days or $600 cash bonus for opening a new account based on the initial deposit.

CashWhen you open a new online broker account, you will need to select an asset allocation based on your goals, time horizon, and risk tolerance. Then, you will select securities (e.g., index funds, target date funds) to buy, place the trade(s) and set a reminder to rebalance your account quarterly or annually. Here are a few discount online brokers and their minimums to get started as of August 2015:

  • Charles Schwab – $1,000 minimum
  • Vanguard – $1,000 (only STAR and target date funds), $3,000 minimum and up for other funds.
  • ScottTrade – $2,500 minimum
  • Fidelity – $2,500 minimum
  • TDAmeritrade and E*Trade – $500 minimum
  • Trade King – no minimum

Automated Investing

autopilotGrowing in popularity, you may be interested in automated investing. This type of investing requires the least amount of your time and effort, as the online platform does the work of selecting your asset allocation and securities, placing the trades, and rebalancing your account automatically. If you are interested in automated investing, choose an online advisor, open an account by transferring money from your bank or retirement/investment account, and the automated investing platforms below will select, buy and reinvest stocks and bonds in your portfolio automatically. Here are a few online advisors:

  • Schwab Intelligent Portfolios – $5,000 minimum
  • WiseBanyan – no minimum and no fees
  • Betterment – no minimum
  • Wealthfront – $500 minimum

The most important thing is to get started with investing now! If you know that you are not interested in learning about investing or don’t have the time to manage investments in an online broker account, then automated investing may be the easiest way to open an account and get started investing.

Need an extra nudge? Below are 2 charts that compare the different rate of returns from keeping your money in a savings or CD to investing in the stock market:

How a single investment of $1,000 grows

1000

How a $1,000 per year investment grows

1000x

Remember- don’t get distracted by the noise of which company or type of trading is better than another. Make a decision that fits your needs and open an account and start investing.

Filed Under: Investing Your Money

Car Share is now available on university campuses for students 18+

July 31, 2015 by Zero Gravity Financial, LLC

Enterprise CarShare is offering hourly car rental to college students 18 and older. The program is similar to Zipcar, where insurance and fuel are included in the rate, as well as no maintenance or parking expenses. Enterprise CarShare is the first to offer car rental services to students 18 and older, well below the industry standard age of 26.

Check out which universities and colleges have Enterprise CarShare:

Enterprise CarShare

Filed Under: Save Money

How to repay student loan debt

June 5, 2015 by Zero Gravity Financial, LLC

studentThe CFPB has a great online tool to help figure out how to repay student loan debt. First, make a list of all of your outstanding student loans. Not sure if you have all of your loans? Check these sites for help:

Federal Loans:  Go to Student Loan Data System, select “Financial Aid Review” and click each individual loan to get servicer information.

Private Loans: Check your credit report (Free annual report here).

When you have a list of your student loans, go to CFPB‘s online tool here:

Student Loan Debt Optimizer

The online tool is great at providing options and optimizing student loan payments based on your specific situation.

Filed Under: Financial Planning, Improve Your Credit Score

Money in Your 30’s

May 14, 2015 by Zero Gravity Financial, LLC

30s Financial Tips

Financial tips for 30-somethings covering tax planning, retirement, budgeting, investments, insurance, credit and savings.

Filed Under: Financial Planning

Freelancers: How do you calculate your hourly rate?

May 13, 2015 by Zero Gravity Financial, LLC

DeathtoStock_Desk5As a freelancer, how do you calculate your hourly rates? Are you charging your clients enough money? Over at Beewits, there is a great online tool that will help you calculate how much you need to charge per hour based on your projected income and expenses. Don’t forget to add to the overhead expense list employee benefits for yourself, such as health insurance and a retirement plan.

Hourly Rate Calculator

Filed Under: Tax Tips

Nerd Wallet Post: Five Things Small-Business Owners Should Keep in Mind as Tax Day Approaches

April 16, 2015 by Zero Gravity Financial, LLC

officeI was honored last week to be part of an article on Nerd Wallet regarding things that small business owners should consider as April 15 approaches:

Tax day can be a dizzying experience for taxpayers, full of paperwork to gather and complicated tax rules to master.

That goes double for small-business owners, who have a completely separate set of challenges. NerdWallet surveyed financial advisors who work with small businesses to find out the top things small-business owners should be thinking about at this time of year.

Take advantage of depreciation
Under new IRS rules, if small businesses buy something for under $500, they can expense it. That’s a “big deal” for small businesses because it allows them to immediately write off small expenses related to improvements rather than having to depreciate those expenses over a period of years, says Craig Smalley, an Orlando, Florida-based tax expert.

“They have to claim ‘safe harbor’ on their tax return and have to have an accounting policy for depreciation in order to take advantage of this,” he says. “They have to have someone write the accounting policy. If they don’t claim safe harbor, they lose it.”

Offer a company retirement plan

“We see many small businesses that could take advantage of offering a company retirement plan, or who aren’t taking advantage of plans they currently offer,” says Ryan Neff, a retirement planner in Columbus, Ohio. “These plans can help owners lower their taxable income and also help them save for retirement.”

Owners who offer a 401(k) can contribute $18,000 as an individual, then can make employer contributions up to 25% of their company’s total compensation, Neff says. “When properly designed, the majority of the employer contribution will go to the owner’s 401(k) account(s). This means an owner could save $53,000, and if over age 50, an additional $6,000 as a catch-up contribution.”

Kansas City, Missouri-based financial planner Mathew Dahlberg counsels business owners to consider setting up a small-business retirement plan such as a SEP IRA (Simplified Employee Pension-IRA). The setup and funding deadline is the due date of the tax return for the SEP including extensions, he says (other plans have different deadlines).

“Also, very importantly, the setup costs are minuscule and the contributions, while they must be the same percentage to each eligible employee, are completely discretionary from year to year,” he says.

The last and arguably best reason to set up such a plan, Dahlberg says, is that the business may be able to take a small-business pension setup tax credit, which can cover 50% of the costs (up to $1,000 in costs) for up to three years, should the business qualify.

Talk to your accountant

The small-business owner’s biggest mistake as the tax deadline nears is “not engaging their tax professional in the conversation,” says Wan McCormick, a financial advisor in Fairfax, Virginia.

“The 2014 tax year is a year of changes, with the small business health care tax credit last updated in February. Small-business owners should inform their tax professional how their business has evolved and what they envision for their personal finance and business in the coming year so that the tax professional can advise the owner on any changes needed and educate the owner on future opportunities, such as deductions eligible.”

Brooklyn-based financial advisor Lori Dietzler says getting a good tax preparer is paramount. “Make sure they are honest, answer your questions, and understand your unique tax situation, such as freelancer income, Airbnb rental income, etc.,” she says. “I see too many clients who are being audited, their former accountant is in jail, and they owe back taxes with interest and penalties. Look at your taxes and make sure the information is accurate.”

Get organized

Dietzler says basic organization and keeping track of income and expenses is crucial to avoid tax confusion.

“Some people use the envelope method, where they put receipts in envelopes for each expense category. Then, at the end of the year, they total up each envelope for income and expense category totals,” Dietzler says. “Others use spreadsheets or a Web/mobile app and update it throughout the year. Whatever the method, make sure you choose a system that doesn’t frustrate you at the end of the year when you need to total up your income and expense categories.”

Choice of entity

“Revisit the type of business entity your tax or legal advisors may have recommended you do business as and be sure it is still the best choice to help you meet both your business and personal goals,” says Jeff Vistica, a Carlsbad, California-based financial advisor. “Each entity comes with its own pros and cons. Consider how simple the entity will be to manage, what liability and protection it may provide, and how practical it may be to help you with tax planning. For example, an S corporation allows you some flexibility in determining how and when to receive income, while an LLC comes with ease of setup and maintenance, but it may also leave you subject to higher self-employment taxes.”

Filed Under: Entrepreneur, Tax Tips

AMA: I want to be able to throw money at an investment account, and do better than I would in a savings account.

January 31, 2015 by Zero Gravity Financial, LLC

In today’s Ask Me Anything, there is a question about how to open an investment account and start saving money.

AMA:  I want to be able to throw money at an investment account, and do better than I would in a savings account. I don’t want to pay a bunch of fees. Is this reasonable? How do I choose an option? Do I need to go through a brokerage firm?

I am 22 and graduating in May 2015. I think I understand what I should do to save for retirement, and that I need an emergency fund in a savings account. But I’m not sure what to do with any money I can save beyond that. From reading blogs and articles, it sounds like that’s where you can invest in stocks, ETFs, mutual funds, money markets, etc. I want something that I don’t have to actively manage. Not really sure what to start researching. Thanks for doing what you guys do.

Here are a few options for you to choose from for investment and/or retirement accounts:

  • Easy Solution: Open an account at Vanguard and select investments that suit your risk tolerance and future goals. If you would rather have one fund that is diversified for your retirement in the future, select 2055 Target Fund VFFVX and allocate 100% of your money to it. Another option is to open an account at Charles Schwab with a new service called Schwab Intelligent Portfolios coming in Q1 2015. The Schwab Intelligent Portfolios offer automated trading and rebalancing and will not have advisory fees, commissions, or account service fees.
  • Even Easier Solution: You may prefer opening an account with one of the online advisors listed below. They have a fast, 5 minute account setup that includes your personal goal assessment, risk tolerance survey, tailored asset allocation, and they do all trading and rebalancing.

Betterment
Future Advisor
Wealthfront

Both solutions above provide a low fee solution for you to open an investment/retirement account. I would open a few tabs in a web browser or download their mobile apps and see which one you prefer. You have the right mindset and its great to see you thinking about saving money before you graduate college.

Filed Under: Financial Planning, Investing Your Money

How to Choose a Health Insurance Plan

December 18, 2014 by Zero Gravity Financial, LLC

Health Insurance Comparison

 

‘Tis the season for health insurance open enrollment. Here is a health insurance comparison infographic that compares 4 different plans and gives 3 examples of medical coverage for each one. This information is based on an individual using Freelancers Union Plans:

Filed Under: Health Insurance

Product Review: College Abacus Online College Cost Comparison

December 1, 2014 by Zero Gravity Financial, LLC

college abacus steps

Check out this great online college cost comparison- College Abacus. It is free and easy to go through the steps of comparing colleges’ cost. On the home page, you enter a few colleges and then go through the next steps:

There are over 4,000 colleges in College Abacus that allow parents and prospective students to compare the net price. The net price is the final cost of school to you, where scholarships & grants are subtracted from tuition, room & board.

Results

The comparison results above show just how powerful this comparison calculator is to understand college costs, estimate financial aid, and see the final net price for each college. It also provides SAT/ACT scores, loan defaults of graduates, and percentage of students that graduate in 4 years.

Filed Under: Financial Planning

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