Over 40% of Americans don’t have $1,000 for an emergency — here’s how to save for the unexpected

Emergencies happen all the time, but many Americans aren’t prepared for them, and specifically for how much they can cost. Not having enough money in your emergency fund, or not having an emergency fund at all, could seriously set you back. Here’s why having an emergency fund is important, and how to save the money you need. Depending on your expenses, and the size of your family, the exact amount you need for your emergency fund will vary. “The destination is enough to cover six months worth of


Emergencies happen all the time, but many Americans aren’t prepared for them, and specifically for how much they can cost.
Not having enough money in your emergency fund, or not having an emergency fund at all, could seriously set you back.
Here’s why having an emergency fund is important, and how to save the money you need.
Depending on your expenses, and the size of your family, the exact amount you need for your emergency fund will vary.
“The destination is enough to cover six months worth of
Over 40% of Americans don’t have $1,000 for an emergency — here’s how to save for the unexpected Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-23  Authors: ivana pino, natalia lusinski
Keywords: news, cnbc, companies, unexpected, need, expenses, family, heres, fund, mcbride, 1000, emergency, americans, save, having, cover, dont, money, saving


Over 40% of Americans don't have $1,000 for an emergency — here's how to save for the unexpected

Emergencies happen all the time, but many Americans aren’t prepared for them, and specifically for how much they can cost. Only 41% of U.S. adults have enough savings to cover an $1,000 emergency room visit, for example, or car repair, according to a recent survey from Bankrate of 1,015 adults. Of those surveyed, 16% said they would finance an emergency with a credit card. These kinds of crises are actually common: Twenty-eight percent of adults or their close family members experienced one in the past year, and the average cost was a whopping $3,518. Not having enough money in your emergency fund, or not having an emergency fund at all, could seriously set you back. You could fall behind on bills because paying off an unexpected expense takes precedence, or have to take on credit card debt. “The lack of progress on the percentage of Americans that could pay an unplanned expense of a thousand dollars out of savings is alarming,” says Greg McBride, chief financial analyst for Bankrate. “Successful saving is all about the habit. If you don’t have the habit, you’re setting up a big roadblock for yourself,” says McBride. “People are probably hemmed in by high expenses and stagnant income that constrains their ability to save.” Here’s why having an emergency fund is important, and how to save the money you need.

How much money you need in an emergency fund

Ideally, you should have enough saved to cover six months’ worth of basic living expenses including rent, groceries, and utilities, in the event that you need some extra cash, McBride says. You may also want to consider the kinds of accidents that could happen in the near future and how you’d handle them. The average visit to an emergency room costs about $1,109 for out-of-pocket expenses, according to a 2019 report from TransUnion Healthcare, which included patients who are commercially insured, those who receive Medicare, and those who self-paid. Replacing the brakes on your car could set you back $500, according to Auto Service Costs. Depending on your expenses, and the size of your family, the exact amount you need for your emergency fund will vary. Where a single 22-year-old may be able to stretch $1,000 in the event of an emergency, the same may not be true for a family of five. The most important thing, says McBride, is to begin saving whatever you can. “There’s the destination, and then there’s the starting point,” he says. “The destination is enough to cover six months worth of expenses, and that in itself is a moving target.”

How to start saving


Company: cnbc, Activity: cnbc, Date: 2020-01-23  Authors: ivana pino, natalia lusinski
Keywords: news, cnbc, companies, unexpected, need, expenses, family, heres, fund, mcbride, 1000, emergency, americans, save, having, cover, dont, money, saving


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5 tips for making money in real estate from an Indiana couple bringing in $2,000 a month

It’s also the reality for Indiana couple Greg and Holly Johnson, both 40, who net an average $2,000 per month in rental income from two homes. “We plan to use our rental income as part of our retirement plan,” says Holly, who writes about personal finance on her blog, Club Thrifty. Though it hasn’t always been easy, Holly says she has learned a great deal, and she shared her best advice for anyone who is considering buying a rental property. But, as they learned when they purchased a second prop


It’s also the reality for Indiana couple Greg and Holly Johnson, both 40, who net an average $2,000 per month in rental income from two homes.
“We plan to use our rental income as part of our retirement plan,” says Holly, who writes about personal finance on her blog, Club Thrifty.
Though it hasn’t always been easy, Holly says she has learned a great deal, and she shared her best advice for anyone who is considering buying a rental property.
But, as they learned when they purchased a second prop
5 tips for making money in real estate from an Indiana couple bringing in $2,000 a month Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-23  Authors: emily glover, susan roane
Keywords: news, cnbc, companies, month, mortgage, landlords, tips, holly, johnsons, bringing, indiana, rate, making, rental, 2000, interest, property, real, estate, income, renters, money, couple


5 tips for making money in real estate from an Indiana couple bringing in $2,000 a month

Real estate is often touted as one of the most reliable investments, and the prospect of earning passive income from a tenant while a property appreciates is appealing. It’s also the reality for Indiana couple Greg and Holly Johnson, both 40, who net an average $2,000 per month in rental income from two homes. The money allowed them to pay off one home “extremely early” and double up on payments for the second house, which is on track to be paid off within five years. “We plan to use our rental income as part of our retirement plan,” says Holly, who writes about personal finance on her blog, Club Thrifty. This was all possible because they purchased their first home in their 20s with a bigger goal to become landlords. Though it hasn’t always been easy, Holly says she has learned a great deal, and she shared her best advice for anyone who is considering buying a rental property.

1. Get familiar with specific taxes and fees

The Johnsons’ first rental property was also their first home; they were allowed to purchase it with a 3% down payment and get a lower interest rate. But, as they learned when they purchased a second property intending to rent it out, they needed a more robust 20% down, and the interest rate was higher. They were also surprised to learn that property tax caps in Indiana are double for rental properties. Because Holly knew the market in her hometown, she was still confident that rental income would offset monthly expenses. However, landlords operating in areas they don’t know as well may be in for a financial loss if they can’t charge enough to cover payments.

Video by Jason Armesto

2. Communication with tenants is key

It’s fairly standard for landlords to run background and credit checks. Holly is just as interested in what she can read between the lines from these reports, though. “I mostly do this to ensure renters are being truthful on their applications,” she says. “Our longest term renters don’t have excellent credit, but they were very straightforward about it. I appreciated their honesty and we’ve had a wonderful experience with them.”

3. Expect emergency expenses at the worst times

When it comes to homeownership, expect the unexpected, they say — especially when renters are involved. “We had a renter do about $5,000 worth of damage on one of our properties several years ago,” Holly says. “We had to replace all the flooring, all the interior doors in the home, a giant window on the front of the home, and more when they moved out.” Having a separate fund with the equivalent of 3 to 6 months of rent reserved — essentially, a emergency fund for the business — allowed the Johnsons to cover the expenses without dipping into their personal bank accounts.

Video by David Fang

4. Paying off the mortgage should be a priority

The Johnsons decided to throw their profits back into their one rental that still has a mortgage. By taking an aggressive approach, they are minimizing interest payments: “This mortgage is currently on a fixed rate loan at 4.95% APR, so we’re saving approximately that amount by prepaying.” Having a fully paid mortgage also gives them a financial buffer to clean a rental or make repairs during the gap between tenants.

5. Make decisions on homes with your head, not heart


Company: cnbc, Activity: cnbc, Date: 2020-01-23  Authors: emily glover, susan roane
Keywords: news, cnbc, companies, month, mortgage, landlords, tips, holly, johnsons, bringing, indiana, rate, making, rental, 2000, interest, property, real, estate, income, renters, money, couple


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New stocks are red hot to start 2020 with IPO ETF tripling the return of the market

Despite a roller-coaster ride in 2019, IPO investors made money, and they are starting off 2020 in the green as well. The Renaissance Capital IPO ETF, a basket of the most recent 60 or so larger IPOs, is at a historic high. The IPO ETF has outperformed the major indices this year due to a surge in 2019 under-performers such as Uber, Lyft and BeyondMeat. “The strong 2020 performance of recent IPOs bodes well for the 2020 crop,” said Kathleen Smith of Renaissance Capital. IPO watchers expect the 2


Despite a roller-coaster ride in 2019, IPO investors made money, and they are starting off 2020 in the green as well.
The Renaissance Capital IPO ETF, a basket of the most recent 60 or so larger IPOs, is at a historic high.
The IPO ETF has outperformed the major indices this year due to a surge in 2019 under-performers such as Uber, Lyft and BeyondMeat.
“The strong 2020 performance of recent IPOs bodes well for the 2020 crop,” said Kathleen Smith of Renaissance Capital.
IPO watchers expect the 2
New stocks are red hot to start 2020 with IPO ETF tripling the return of the market Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: bob pisani
Keywords: news, cnbc, companies, ipo, tripling, hot, nearly, lyft, quarter, ipos, 2020, start, stocks, uber, public, etf, red, recent, money, return, market


New stocks are red hot to start 2020 with IPO ETF tripling the return of the market

Despite a roller-coaster ride in 2019, IPO investors made money, and they are starting off 2020 in the green as well.

The Renaissance Capital IPO ETF, a basket of the most recent 60 or so larger IPOs, is at a historic high. It has dramatically outperformed the S&P 500 year-to-date, up nearly 9% versus a gain of about 3% for the S&P.

The IPO market is now heating up again, with recent filings from Reynolds Consumer (Reynolds Wrap and Hefty trashbags) and OneMedical (health clinics). They may soon be joined by Casper (mattresses), which has filed to go public but not yet set out terms.

Sitting out there is Airbnb, and likely the largest IPO of the year: GE Healthcare, GE’s imaging business, which could go public at $60 billion. That’s twice the size of Airbnb.

The IPO ETF has outperformed the major indices this year due to a surge in 2019 under-performers such as Uber, Lyft and BeyondMeat.

IPO underperformers shine in 2020 (YTD) Uber, up 26% Lyft, up 12% Beyond Meat, up 71% SmileDirect, up 45%

Uber and Lyft together comprise nearly 15% of the value of the IPO ETF.

“The strong 2020 performance of recent IPOs bodes well for the 2020 crop,” said Kathleen Smith of Renaissance Capital.

“Prices were reset in the third quarter,” she said, noting that the IPO ETF rebalanced in the second half of December, buying its largest position — Uber — at nearly $29. It’s now at $37.

Smith noted that while the amount of money raised by IPOs in 2019 was a mild disappointment — $46 billion, which is about the same as 2018 — public investors made money in most IPOs. That’s because many issuers were forced to lower prices to attract buyers.

“It was a mediocre year for companies that thought they could go public at premium valuations, but it was a good year for investors who bought IPOs,” she said. She expects that to continue into 2020.

IPO watchers expect the 2020 market to be front-half loaded due to a big second-half event: the presidential elections.

“In an election year, IPO issuance is traditionally strong in the first two quarters, slow in the third quarter, then picks up in the end of the fourth quarter,” Santosh Rao, head of research at Manhattan Venture Research said.

“My best guess is the biggest names will try to come out well before the election,” he said.


Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: bob pisani
Keywords: news, cnbc, companies, ipo, tripling, hot, nearly, lyft, quarter, ipos, 2020, start, stocks, uber, public, etf, red, recent, money, return, market


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5 ways to keep from making these top common money mistakes

YouTube bloggers revisit their own spending mistakes regularly, says Sarah Wilson, a personal finance blogger who lives in College Station, Texas. “When people take more time to think about how they’re going to spend their money they’re far less likely to wish they hadn’t spent it.” In a more recent YouTube video, Wilson details misguided spending on shoes, luggage and cookware, and shares some commonsense strategies to avoid financial mistakes. Habits firstSpending money doesn’t equal meeting g


YouTube bloggers revisit their own spending mistakes regularly, says Sarah Wilson, a personal finance blogger who lives in College Station, Texas.
“When people take more time to think about how they’re going to spend their money they’re far less likely to wish they hadn’t spent it.”
In a more recent YouTube video, Wilson details misguided spending on shoes, luggage and cookware, and shares some commonsense strategies to avoid financial mistakes.
Habits firstSpending money doesn’t equal meeting g
5 ways to keep from making these top common money mistakes Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: jill cornfield
Keywords: news, cnbc, companies, spend, making, wilson, youre, mistakes, youve, common, gym, doesnt, ways, youtube, spending, lum, money


5 ways to keep from making these top common money mistakes

Sarah Wilson, of BudgetGirl, recommends looking for cheap or free alternatives before actually buying. Source: Sarah Wilson

You’re not the only one with spending sorrows. In recent years, some popular YouTube bloggers have started making videos confessing their biggest money mistakes, running the gamut from spending thousands of dollars on interior design for a rental apartment (“I didn’t do my research,” said Monica Church) to refusing to use public transportation (“I regret every dollar I spent on that temporary Hundai Accent,” said Chelsea Fagan). These trending videos have struck a nerve with viewers, with hundreds of thousands of views, and more money-confession clips are posting all the time. Even if you’re not a YouTube blogger or influencer yourself, you might still be regretting a $995 pair of fur-lined Gucci loafers or an underwhelming meal in Paris that still managed to set you back $400 — or maybe just an unused gym membership. YouTube bloggers revisit their own spending mistakes regularly, says Sarah Wilson, a personal finance blogger who lives in College Station, Texas. “I did one four years ago on what I would have done differently with student loans.” The patterns Wilson sees resurface frequently. “Impulse buys of any category are almost always [going to be] regrets,” she said. “When people take more time to think about how they’re going to spend their money they’re far less likely to wish they hadn’t spent it.”

There are different ways of feeling bad about a purchase, says Joseph Lum, a certified financial planner at Intersect Capital in San Ramon, California. Sometimes an item doesn’t live up to your expectations. Purchasing something beyond your means can also be upsetting, if you’re still paying for it many months and many dollars later, thanks to interest charges. The top thing you need to do is figure out exactly how much you can spend freely throughout a given month or year so you’re not affected negatively. That brings up the ugly “B word” — budgeting — which Lum says doesn’t work, due to its restrictive nature. “It’s like diets,” he said. “The entire premise is that it’s built on restricting yourself.” More from Invest in You:

Money mind hacks from bloggers can boost your finances

Retirement luxury on a Social Security budget

The biggest regrets people have about investing in stocks Financial freedom is not a matter of attaining some magic number, like $100,000. “It’s the freedom to spend at your discretion because you’ve taken care of business,” Lum said. “You don’t have guilt.” That ease with spending comes after you’ve worked out how to pay yourself first — saving for retirement, emergencies and so on. “Say there’s 20% left over,” Lum said. That’s yours to spend or splurge however you want. In a more recent YouTube video, Wilson details misguided spending on shoes, luggage and cookware, and shares some commonsense strategies to avoid financial mistakes.

Habits first

Spending money doesn’t equal meeting goals. “It creates a false sense of accomplishment in your brain, when all you’ve done is spend money,” Wilson said. Fitness trackers, gym membership and sports equipment can be useful, but only if you use them. Signing up for a $10 monthly gym membership may seem like a good, cheap way of getting closer to your health goals. If you don’t go, you are looking at $120 in wasted fees each year. Reward yourself after accomplishing some milestones. “When you’ve worked out X number of times a week, then go ahead and get the Fabletics leggings,” Wilson said. And before you buy that fancy lunchbox, form the habit of packing your lunch one or two times a week.

Try for no-cost

Unused gym memberships are estimated to cost Americans some $1.8 billion annually. Before committing to months of payments, check your benefits package for any freebies, says Wilson, whose employer gives employees free classes at a local fitness club. “Your insurance may offer subsidies on gym equipment or memberships,” she said. YouTube has free videos on anything from yoga and Zumba to any other fitness workout you can imagine, and there are thousands of them. Instead of a FitBit or other fitness tracker, use the health app on your iPhone or install a free or low-cost app on an Android phone.

hundreddays

Test drive

Impulse spending can add up to $5,400 a year for the average person. Mulling a switch from a purse to a backpack? Before making a serious investment, try a cheaper version first to see if you like it. “More expensive doesn’t always mean better,” Wilson said.” A mistake many YouTubers make: They default to the super high-quality, then realize it doesn’t necessarily work for them.” Sometimes it’s right to go for quality from the start. “If you’re a cook and enjoy cooking, the [higher quality] is going to be the better choice,” Wilson said.

Pattern recognition

Many people struggle to recognize spending patterns. “For years, I purchased cheap shoes that fell apart immediately,” Wilson said. She similarly bought inexpensive cookware and then felt bad when it did not hold up. Learn from your bad choices so you can stop repeating them. “It’s the definition of insanity,” Wilson said. “A big part of my journey is recognizing when I’ve done things stupidly and sharing them — both for accountability and to help other people not make the same mistakes.”

Have a plan


Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: jill cornfield
Keywords: news, cnbc, companies, spend, making, wilson, youre, mistakes, youve, common, gym, doesnt, ways, youtube, spending, lum, money


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Mark Cuban, who made billions from the dot-com bubble, says here’s how you’ll know the rally is over

Mark Cuban, who made billions of dollars during the dot-com boom, said Wednesday that the stock market is not reminiscent of 1999. “Interest rates were a lot different back then,” Cuban said on CNBC’s “Fast Money Halftime Report.” The levels of day trading have receded and given way to the rise of index funds, creating a fundamentally different landscape, Cuban said. “There’s so much money chasing index funds, so as long as those funds keep on growing the market is going to go up,” said Cuban, w


Mark Cuban, who made billions of dollars during the dot-com boom, said Wednesday that the stock market is not reminiscent of 1999.
“Interest rates were a lot different back then,” Cuban said on CNBC’s “Fast Money Halftime Report.”
The levels of day trading have receded and given way to the rise of index funds, creating a fundamentally different landscape, Cuban said.
“There’s so much money chasing index funds, so as long as those funds keep on growing the market is going to go up,” said Cuban, w
Mark Cuban, who made billions from the dot-com bubble, says here’s how you’ll know the rally is over Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: kevin stankiewicz
Keywords: news, cnbc, companies, heres, billions, bubble, stock, trading, index, cuban, mark, money, different, rally, funds, lot, market, youll, dotcom, know


Mark Cuban, who made billions from the dot-com bubble, says here's how you'll know the rally is over

Mark Cuban, who made billions of dollars during the dot-com boom, said Wednesday that the stock market is not reminiscent of 1999.

“Interest rates were a lot different back then,” Cuban said on CNBC’s “Fast Money Halftime Report.” “And you saw a lot more people participating in the market. … You don’t see that now. That individual day trading really led the market to be frothy.”

The levels of day trading have receded and given way to the rise of index funds, creating a fundamentally different landscape, Cuban said.

“There’s so much money chasing index funds, so as long as those funds keep on growing the market is going to go up,” said Cuban, who sold Broadcast.com to Yahoo in April 1999 for $5.7 billion.

Cuban’s comments Wednesday were in response to concerns from investors who are comparing the stock market’s current valuation to the bull market in 1999 that concluded with collapse of the dot-com bubble.

Highly speculative internet stocks helped propel the tech-dominated Nasdaq up more than 500% from 1995 until the bubble burst in March 2000.


Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: kevin stankiewicz
Keywords: news, cnbc, companies, heres, billions, bubble, stock, trading, index, cuban, mark, money, different, rally, funds, lot, market, youll, dotcom, know


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Mark Cuban says Amazon smartest company in the universe

Mark Cuban says Amazon smartest company in the universeMark Cuban, investor and owner of the Dallas Mavericks, joins ‘Fast Money Halftime Report’ to discuss his stock picks.


Mark Cuban says Amazon smartest company in the universeMark Cuban, investor and owner of the Dallas Mavericks, joins ‘Fast Money Halftime Report’ to discuss his stock picks.
Mark Cuban says Amazon smartest company in the universe Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-22
Keywords: news, cnbc, companies, universe, stock, company, cuban, mark, report, money, amazon, owner, universemark, smartest, picks, mavericks


Mark Cuban says Amazon smartest company in the universe

Mark Cuban says Amazon smartest company in the universe

Mark Cuban, investor and owner of the Dallas Mavericks, joins ‘Fast Money Halftime Report’ to discuss his stock picks.


Company: cnbc, Activity: cnbc, Date: 2020-01-22
Keywords: news, cnbc, companies, universe, stock, company, cuban, mark, report, money, amazon, owner, universemark, smartest, picks, mavericks


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How to find out if a Roth conversion is right for you—and how to do one

A Roth conversion is just as it sounds: a way to convert funds from a traditional IRA (individual retirement account) into a Roth IRA. What is a Roth conversion? A Roth conversion turns a traditional IRA into a Roth IRA. Anyone is eligible to do a Roth conversion, regardless of their income. How do you do a Roth conversion?


A Roth conversion is just as it sounds: a way to convert funds from a traditional IRA (individual retirement account) into a Roth IRA.
What is a Roth conversion?
A Roth conversion turns a traditional IRA into a Roth IRA.
Anyone is eligible to do a Roth conversion, regardless of their income.
How do you do a Roth conversion?
How to find out if a Roth conversion is right for you—and how to do one Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: kathleen elkins
Keywords: news, cnbc, companies, right, youre, taxfree, egler, withdrawals, ira, youand, money, roth, traditional, tax, conversion


How to find out if a Roth conversion is right for you—and how to do one

A Roth conversion is just as it sounds: a way to convert funds from a traditional IRA (individual retirement account) into a Roth IRA. A Roth IRA is a powerful retirement savings tool, since your money grows tax-free, and it might make sense for you to shift your funds into one. To help you figure out if it’s a good money move for your situation, CNBC Make It spoke to Fred Egler, a certified financial planner at Betterment, about the difference between the two types of IRAs, the pros and cons of doing a Roth conversion and exactly how to execute one.

How does a traditional IRA work?

With a traditional IRA, you contribute pre-tax dollars and let that money grow tax-deferred over time. You’ll pay taxes on your contributions and any investment gains only when you withdraw the money, which you can do starting at 59½. If you withdraw before then, you may have to pay a 10% fee for early withdrawals, unless you qualify for an exception. With this type of IRA, there are required minimum distributions, meaning you have to start taking money out by April 1 following the year you turn 72 and by December 31 of later years. For 2020, you can contribute up to $6,000 in this account, or $7,000 if you’re 50 or older.

How does a Roth IRA work?

With a Roth IRA, contributions are taxed when they’re made, so you can withdraw the contributions and earnings tax-free once you reach 59½. There’s an income cap on the Roth IRA, which the IRS sets each year based on modified adjusted gross income (MAGI): For 2020, a single person earning $139,000 or more and a married couple making $206,000 or more cannot directly contribute to a Roth. Like a traditional IRA, there’s also a contribution limit: For 2020, it’s $6,000 a year, or $7,000 for people age 50 or older. If you are contributing to both accounts, keep in mind that your total contributions to all of your traditional and Roth IRAs cannot be more than $6,000 a year, or $7,000 if you’re over 50.

What is a Roth conversion?

A Roth conversion turns a traditional IRA into a Roth IRA. If you have money in a traditional account, but like the idea of making future withdrawals tax-free, converting to a Roth would allow you to do so. Anyone is eligible to do a Roth conversion, regardless of their income. “They are a great way for high income individuals to get money into a Roth IRA without contributing directly to one because of the income cap,” says Egler. You may have heard of this process of sidestepping the cap referred to as a “backdoor Roth IRA.”

What are the pros of doing a conversion?

The biggest benefit is that you’ll be able to keep money in a Roth IRA, where it will grow tax-free and qualified withdrawals in retirement won’t be taxed. If you think your tax rate is going to be lower now than it will be when you start withdrawing money, converting to a Roth is especially appealing because you’ll pay taxes on the money while you’re in a lower tax bracket. It’s also a way to avoid required minimum distributions, which is the minimum amount you have to withdraw from your account each year. With a traditional IRA, you have to start taking withdrawals at 72. Roth IRAs don’t require withdrawals at a certain age, so your money can continue growing there until you’re ready to take it out.

What are the cons of doing a conversion?

There are tax consequences that come with moving money from a traditional to a Roth, explains Egler: “In most cases, when you convert funds, it’s considered a taxable event, which means that you owe taxes on some or all of the amount that you convert to a Roth. Basically, that money will be added to your income for that tax year.” If you’re converting a ton of money, the tax consequences are going to be high and the process might be more of a burden than an advantage. “Let’s say someone had $500,000 in their traditional IRA,” says Egler. “It probably wouldn’t make sense to convert that to a Roth because you’d be adding $500,000 to your taxable income for the year.” Additionally, if you think your tax rate is higher now than it will be when you start taking withdrawals, a conversion could cost you more in taxes now than you’d save with tax-free withdrawals later, Egler says. You can use a Roth conversion calculator to estimate how this might play out for you, but it’s hard to predict future tax rates, especially if you won’t be taking funds out for 10 to 30 years.

While everyone’s situation is different, it might not make sense to do a conversion if you’re close to retirement. “The shorter the time period, the less advantageous the Roth conversion can be, because the tax-free growth has less time to compound and grow,” Egler says. Plus, there’s a “five year rule” that says you have to wait five years from the conversion to take full advantage of tax-free distributions from the Roth IRA. “For people who plan to use that money in retirement sooner rather than later, it probably doesn’t make sense,” Egler says. “Once you do a Roth conversion, it’s irreversible,” Egler adds. “If you’re going to do one, you should certainly make sure it’s for you.”

How do you do a Roth conversion?


Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: kathleen elkins
Keywords: news, cnbc, companies, right, youre, taxfree, egler, withdrawals, ira, youand, money, roth, traditional, tax, conversion


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Here are the smartest things to do with that bonus check

Bonus checks will begin arriving during the next few weeks for many corporate executives and managers. Let’s start by remembering that your bonus is a reward, so don’t be afraid to spend a portion of it on something – or someone – that brings you joy and happiness. With financial independence as the end goal, here are six recommendations on how to best allocate your bonus check:• Set aside enough money for taxes. While many companies withhold taxes from bonus checks, others don’t, and many don’t


Bonus checks will begin arriving during the next few weeks for many corporate executives and managers.
Let’s start by remembering that your bonus is a reward, so don’t be afraid to spend a portion of it on something – or someone – that brings you joy and happiness.
With financial independence as the end goal, here are six recommendations on how to best allocate your bonus check:• Set aside enough money for taxes.
While many companies withhold taxes from bonus checks, others don’t, and many don’t
Here are the smartest things to do with that bonus check Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-21  Authors: ryan halpern, wealth advisor at brightworth
Keywords: news, cnbc, companies, cover, check, smartest, bonus, fund, financial, dont, debt, taxes, credit, things, expenses, money


Here are the smartest things to do with that bonus check

Bonus checks will begin arriving during the next few weeks for many corporate executives and managers. While a lot of people have anticipated this cash windfall, too many don’t have a clear plan on how to best save, invest and spend this money.

And, unfortunately, some will choose to make a large purchase that may provide some short-term pleasure but will eat away at their long-term financial health.

Let’s start by remembering that your bonus is a reward, so don’t be afraid to spend a portion of it on something – or someone – that brings you joy and happiness. It’s also important to allocate a portion of this money to meet short- and long-term financial goals.

More from Personal Finance:

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While everyone has different goals, most of us desire to be financially independent and look to support a comfortable lifestyle throughout those retirement years. As a rule of thumb, for every $1 million of investments in your nest egg, you can expect to withdraw an estimated $40,000 per year, before taxes, for 30 years. Your investment portfolio, plus Social Security and – if you’re lucky – pension income, are the key elements for a financially independent retirement.

With financial independence as the end goal, here are six recommendations on how to best allocate your bonus check:

• Set aside enough money for taxes. While many companies withhold taxes from bonus checks, others don’t, and many don’t withhold enough. In addition, many executives may have exercised stock options or had other payouts during the year. If sufficient taxes weren’t deducted from these transactions, you’ll need to cover this amount with part of your bonus.

• Replenish your emergency fund. Set aside a few thousand dollars to cover unforeseen major expenses, ranging from car repairs to a new roof or even pet surgeries. A good rule of thumb is to have three to six months of living expenses in that fund. Also, if you don’t have a home equity line of credit, get one. It can help provide short-term cash to cover any major expense not covered by your emergency fund.

• Pay down debt. Knock off a chunk of high-interest rate credit card debt and amounts owed on home equity lines of credit, especially if any new debt was incurred to pay for holiday expenses. Interest charges alone can eat up hundreds of dollars each month, sucking money out of your paycheck and leaving less for essential expenses.


Company: cnbc, Activity: cnbc, Date: 2020-01-21  Authors: ryan halpern, wealth advisor at brightworth
Keywords: news, cnbc, companies, cover, check, smartest, bonus, fund, financial, dont, debt, taxes, credit, things, expenses, money


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Ray Dalio says ‘cash is trash’ and advises investors hold a global, diversified portfolio

Ray Dalio, founder of investment firm Bridgewater Associates, said on Tuesday that he thinks investors shouldn’t miss out on the strength of the current market and they should dump cash for a diversified portfolio. “Everybody is missing out, so everybody wants to get in,” Dalio said, speaking to CNBC’s “Squawk Box” at the World Economic Forum in Davos, Switerzland. Dalio advised having a global and well-diversified portfolio in this market and said the thing people can’t “jump into” is cash. “Ca


Ray Dalio, founder of investment firm Bridgewater Associates, said on Tuesday that he thinks investors shouldn’t miss out on the strength of the current market and they should dump cash for a diversified portfolio.
“Everybody is missing out, so everybody wants to get in,” Dalio said, speaking to CNBC’s “Squawk Box” at the World Economic Forum in Davos, Switerzland.
Dalio advised having a global and well-diversified portfolio in this market and said the thing people can’t “jump into” is cash.
“Ca
Ray Dalio says ‘cash is trash’ and advises investors hold a global, diversified portfolio Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-21  Authors: michael sheetz
Keywords: news, cnbc, companies, firm, ray, portfolio, hold, diversified, dalio, missing, investors, cash, global, investment, gold, market, trash, advises, money


Ray Dalio says 'cash is trash' and advises investors hold a global, diversified portfolio

Ray Dalio, founder of investment firm Bridgewater Associates, said on Tuesday that he thinks investors shouldn’t miss out on the strength of the current market and they should dump cash for a diversified portfolio.

“Everybody is missing out, so everybody wants to get in,” Dalio said, speaking to CNBC’s “Squawk Box” at the World Economic Forum in Davos, Switerzland.

Dalio advised having a global and well-diversified portfolio in this market and said the thing people can’t “jump into” is cash.

“Cash is trash,” Dalio said. “Get out of cash. There’s still a lot of money in cash.”

Dalio’s firm Bridgewater manages about $160 billion. His declaration that investors should not stay on the sidelines is one he’s made before, as in 2018 he declared that those holding cash were “going to feel pretty stupid” for missing the market’s run up.

“You have to have balance … and I think you have to have certain amount of gold in your portfolio,” Dalio said, reiterating his call last year that gold will be a top investment in the years to come.

While he endorsed buying a bit of gold, he warned against more speculative investments like bitcoin.

“There’s two purposes of money, a medium of exchange and a store hold of wealth, and bitcoin is not effective in either of those cases now,” Dalio said.


Company: cnbc, Activity: cnbc, Date: 2020-01-21  Authors: michael sheetz
Keywords: news, cnbc, companies, firm, ray, portfolio, hold, diversified, dalio, missing, investors, cash, global, investment, gold, market, trash, advises, money


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