Financial Planning And Strategies For Your Elderly Parents

Financial Planning

The 65-and-older population has seen rapid growth since 2010, as baby boomers born in the two decades after the second world war begin to gray. Based on the US Census Bureau reports, the country had more than 54 million residents aged 65 years and older as of July 1st, 2019.

The day may not be far when your aging parents are unable to take care of their own financial duties. Your parents might go through a deterioration of their cognitive abilities as well as a risk of falling prey to scammers looking to swindle them out of their hard-earned savings.

The financial responsibilities of your elderly parents need careful planning on your part.

Here we discuss some of the steps you can take to manage your parents’ finances.

Start the Conversation with Your Parents

Your parents may not need your help right now, but that should not stop you from starting a dialogue. As per the National Institute on Aging guidelines, you will need your parents’ written consent in advance to discuss their personal financial and medical matters with financial representatives, doctors, and Medicare executives.

Starting a conversation now will give a better idea of the degree of involvement expected from you, over time. Moreover, privacy laws may inhibit such conversations later.

Make Gradual Changes

They might need your help, but maybe hesitant to ask for it. The onus will be on you to be sensitive and work with them in a manner that takes care of their needs without making them uncomfortable.

Be wary of rushing in to take charge of your parents’ finances. Instead, extend your support only when needed at first, and then increase it gradually, so that it gives them time to be comfortable with the new arrangements.

Compile all the Important Documents

Take inventory of your parent’s account numbers, contacts, and legal documents. Prepare a list of insurance policies, certificates, deeds, and wills; and make sure that everything is up to date, and valid. While compiling this data, ensure the safety of all sensitive information and the security of the storage location.

Execute a Power of Attorney

A capable adult can sign a power of attorney to assign powers to another person to exercise choices and act on their behalf. A power of attorney can have a limited or broad scope, utility, or duration, and cover general, medical, or financial decisions.

A power of attorney on behalf of your parents provides you the legal authority to make the necessary decisions when your parents are not able to do so. An attorney conversant with elder law can help you to draft a power of attorney document according to your needs. These are the three documents you might need, to begin with:

A Durable Power of Attorney

This document appoints someone your parents can trust to look after their financial responsibilities should they be no longer capable to do so themselves.

A Health Care Proxy

Your parents can assign powers to a trusted individual to make medical decisions when they are incapable to do so.

A Will 

This legal document includes your parents’ wishes related to the division of their assets once they pass.

Executing these documents can be emotionally taxing, but you will need legal documentation if there is a sudden deterioration of your parent’s health, making them incapacitated to carry out these tasks.

Separate Your Finances

Avoid mixing your parents’ finances with your own, even if it seems convenient at the time. It is important to keep your funds and assets separate and not put your own financial and retirement goals in jeopardy while helping your parents.

Keep Your Loved Ones Informed

It’s vital to communicate with the other members of the family, especially siblings, yours as well as your parents’. This can reduce any chances of misunderstanding apart from the fact that relatives can extend their support in managing some of the responsibilities. 

Additional Practical Suggestions

  • Try to curtail your parents’ vulnerability to fraudsters by placing their phone number on the Do Not Call registry
  • Ensure the safety and security of all legal and financial documents
  • Keep copies of all financial transactions handled by you on your parents’ behalf
  • Make a budget and open a savings account
  • Consult an investment advisor for the assessment of your parents’ investments
  • Seek advice on when your parents should start withdrawals from their social security payments

5 Things That Differentiate Billionaires From Others


Billionaires are different from the rest of us – clearly in terms of their enormous wealth. Now the big question is this – how did they achieve exceptional financial success? Are they exceptional because they are born that way, or did they consciously develop some habits and best practices that made them so wealthy?

Her are 5 extraordinary traits that are common across billionaires, contributing directly to their incredible success. And the best part, these traits can be consciously developed in any one of us! Let’s take a look.

1. They are unafraid of the grind

Now we all love to work smart. But if you look in, there’s a subtle resistance to working hard, constantly and continuously, in order to achieve our desires. Billionaires are successful because they have crossed this hurdle.

Take the case of Bill Gates, perhaps the most famous billionaire – even despite some hiccups in the last few years. But what you cannot ignore, is the sheer amount of work put in by Mr. Gates himself to create his billion-dollar company.

  • Working after office hours? Always!
  • 60-hour weeks? Huh, this is child’s play, 90-hours is more like it!
  • Working every weekend including all holidays? Absolutely! That’s the American spirit. Take care of yourself – pay your own way! Can I work from home when I am not at work? For sure!

In fact, his own team has shared how they struggle to keep pace with his hours, despite putting in 80+ hours every week at work!

Then there’s General Electric, which still deserves respect after some NBC hiccups many years ago. GE’s own CEO Jeffery Immelt has always lead from the front, as he slogged through 100-hour weeks for 24 straight years. Think about it, many of us don’t even last 40-hour weeks for 24 years!

2. They embrace renunciation

Don’t let this word scare you away. Renunciation is not about giving up on your family or your personal wellbeing. But can you renounce the need for frequent vacations, like Mark Cuban of Dallas Mavericks did, as he stubbornly chose to work through every vacation for 7 supremely productive years? This is also true of many a young Billionaire who’s doggedly worked through his/ her entire 20’s.

If you aren’t ready to take this plunge yet, you can still make significant progress with tiny steps. Defer settling down with your favorite bestseller book and choose to work instead. Give up a few hours of TV every week, so you can spend this time amplifying your productivity. Spend less time partying in the 20’s, so you can sit rich and pretty in the 30’s.

Like that old adage goes, “A little pain can go a long way in creating tremendous long-term gain”. True that!

3. The buck stops with them, especially during failure

In order to be successful, it is key that we learn to be successful at failure. Yes failure, that terrifying possibility that most of us deny. Ironically, billionaires welcome this possibility, proactively planning for it, so they know how to gracefully address it.

We try to work forwards, towards our goal. So, we end up getting frustrated and disheartened when we’re surprised with failure.

Billionaires work backwards, from their ultimate goal, including the possibility of failure, so they feel less confronted when they inevitably have to deal with it. Here, financial investor Charlie Munger offers a brilliant suggestion. If we understand all the possible ways we could fail, we could create a fool-proof plain to avoid them. Nice!

4. They don’t give up, ever

Here’s a secret that billionaires know: failure isn’t as devastating when you decide not to give up. They decide, again and again, to keep going. So, should everybody who desires wealth and financial success.

A classic illustration of this is the extremely resourceful Elon Musk, the founder of SpaceX and present owner of Tesla who’s expanding his empire into Texas after having some issues with California’s polices. Furthermore, he did not become a billionaire or a household name by accident, and faced many a hurdle in his journey to success.

For instance, when his team failed in their 2008 attempt to launch their first rocket, obviously costing him millions of dollars, he did not get overwhelmed or blame anyone else. He hit the grindstone, inspired his team with the promise of additional funds required to try again, and ultimately made it successful.

Having a resilient leader who can inspire even during failure is a boon to any company. Billionaires consciously seek to become that worthy.

5. They pick their battles

This may be shocking, but billionaires cannot afford to engage in pointless ego-driven battles. They consciously pick their battles, and for this, they are unafraid to respond with an “NO” – to pleasant yet time-consuming habits, to every-day distractions, to self-victimization, to blaming others. They are unapologetic in their quest for success, and thus undoubtedly blessed with it.

Some people want to bash billionaires but that right to pursue success helps elevate so many other people. The countries with the most billionaires seem to have the highest quality of life.

In closing, remember these words of soccer legend Pele: “Success is no accident. It is hard work, perseverance, learning, studying, sacrifice, and most of all, LOVE of what you are doing or learning to do”. Touché!

Checklist For a Perfect Year-End Financial Planning

Financial Planning

An unprecedented year with far-reaching economic consequences is coming to an end. It has had an impact on everyone’s personal finances in one way or another, and you need to reassess goals and firm up your year-end financial strategy more than ever before. Here are some useful tips and a checklist to assist you with that.

Managing Income and Investments

  • To offset capital gains, it is prudent to sell losing investment positions near the end of the year. But it may be sensible to wait this year, with the prospect of higher taxes in 2021.
  • Short-term losses are best at offsetting capital gains. Wait a minimum of 31 days before buying back a holding sold for a loss to avoid the IRS wash sale rule.
  • It may also make sense to accumulate and declare income in 2020 and defer declaring expenses into 2021, with the prospect of higher taxes in 2021.
  • Appraise if you need to defer buying mutual fund shares until 2021 to avert capital gains on brand new investments.
  • Bunch your itemized medical expenses within the same year so as to meet the required maximum percentage of your adjusted gross income in order to claim deductions.
  • In December, make your January mortgage payment (i.e., the payment due no later than January 15th) so you can claim deduction of the interest on your 2020 income tax return.
  • If possible, make sure that you maximize contributions to 401Ks, IRAs (not due until April 15th), SEPs (due April 15th or extension deadline), Simple IRAs (April 15th deadline), or other qualified accounts.

Retirement Planning

  • A Roth IRA allows for assets to grow tax-free and also for distribution to be taken that aren’t subject to taxation (certain restrictions apply). At times, when either your income or the value of your account is lower, are especially good for converting a traditional IRA to a Roth IRA.
  • Roll over unspecified 401(k) accounts from a previous employer.
  • 2020 was an RMD (Required Minimum Distribution) holiday. You can re-contribute any RMDs taken in this calendar year and save on taxes if you plough it back.

Charitable Gifting Strategy

  • A DAF (Donor Advised Fund) is a low-cost, effective strategy that provides the opportunity for annual charitable gifting and allows the donor to take a full tax deduction in a single year. For tax filers who file an itemized return, the normal maximum deduction for a cash charitable donation is limited to 60% of Adjusted Gross Income (AGI), yet the CARES Act allows for a deduction of up to 100% of AGI in 2020.
  • You can still do Qualified Charitable Contributions (QCDs) from IRAs if you’re over age 70½, up to $100,000.
  • Money already in the DAF can be used to make gifts, in case there are cash flow constraints this year due to issues related to the pandemic. You can also use your IRA to make QCDs.

Estate Planning

  • Beneficiary designations on IRAs and 401k accounts supersede your will, so confirm to review and update appropriately but we know that surviving this Wuhan virus situation is paramount as well.
  • The annual gift tax exclusion is $15,000 for 2020. Those with large estates might want to revisit their estate planning tax strategy keeping in mind that the higher than normal exclusion for estate, gift, and generation-skipping taxes is set to expire in 2026, or possibly earlier.

Review the Basics

  • April is the tax deadline to make an HSA (Health Savings Account) contribution, which is strongly recommended, given the account’s triple tax benefits.
  • Consume the Flexible Savings Account (FSA) remaining balances. If you don’t utilize the balance in the account by December 31st, you lose out on the chance to spend that money.
  • If you got a partial refund for tuition owing to an extended spring break, and if that money came from a 529 plan, you need to put it back in there or be prepared to pay penalties and tax on that non-qualified distribution.
  • Check with your CPA to see if you’re on track with your payroll withholding. If you didn’t withhold enough throughout the year from your paycheck, you’ll be subject to an underpayment penalty.

Lessons Learned from 2020

Save money to fund your emergency account and put aside more for the future. Invest in insurance to protect your and your family’s financial future. Ensure that you have medical and financial power of attorney in place. Finally, work on building alternative income streams even in a lower tax environment.

Six Strategies to Attain a Credit Score of 800+

credit score

Credit scores are used by landlords, employers, phone service providers, mortgage lenders, insurance companies, and everyone else in between to determine an individual’s financial status and creditworthiness. Credit scores are rated from 300 to 850. An average credit score is 687 in the US.

You would be seen as a high-risk consumer if your credit score is around 300 to 500. Low risk consumers are those with credit scores above 700. Loan applications tend to get approved quickly with 800+ credit scores. You could also qualify for a lower mortgage rate.

Achieving 800+ Credit Score

These strategies should help you achieve 800+ credit score and maintain it.

1. Always Pay Bills on Time

One of the most important factors determining your credit score is your payment history. Your score could be affected horribly if you are in the habit of making late payments. No bill amount is too small when it comes to improving your credit score.

You need to clear all bills, whether they are for magazine subscriptions, utility, or cable. It doesn’t matter whether the bill is a $10 subscription fee or a $1,000 mortgage payment you need to make sure you are never late on settling dues.

2. Focus on Creating a Long Credit History

Another important factor contributing to your overall credit score is the length of your credit history. Longer credit histories usually translate to higher credit scores.

People with a short credit history are viewed as high-risk. Most lenders are antsy dealing with people that don’t have a financial history to show. It is recommended that you keep your old accounts open for as long as you can and to use them as much as possible.

3. Never Max Out Credit Cards

Maxing out credit cards is a rookie mistake in credit score 101. This is especially true if you use the card to pay all your bills in full. There are two reasons why carrying over a large credit balance to the next month is a bad idea. Your credit score will be negatively affected which can be disastrous in the long run. Also, you may have to pay thousands in interest.

The best way to prevent this from happening is to always maintain your credit utilization ratio at 30% or less. This is a healthy figure which can be calculated by dividing the complete debt by available credit limit. Multiply it with 100 to achieve a percentage figure.

For instance, if your credit balance is $1,800 and your credit limit is set at $10,000, your credit utilization ratio is 18%. This is a healthy credit utilization ratio which should ideally be between 10% and 30% of the total credit limit. You should also make it a point to pay off all your bills every month in full without any leftover balance.

4. Don’t Keep Several Credit Cards

While it’s okay to keep two credit cards, you need to stop at five. Having several credit cards makes it difficult to keep track of your spending. You may inadvertently end up carrying a large balance rollover. Also, when you apply for several credit cards in a short span of time, it adversely impacts your credit score.

5. Practice Diversification

Accounts diversification can help in improving your credit rating to some extent. You should consider products, such as credit cards, retail accounts, student loans, auto loans, and mortgage. However, don’t take out unnecessary loans for the purpose of diversifying. The only time you should get a loan is if you need it and know that you can pay it back.

6. Avoid Adding to Your Liability Burden

Co-signing for other people and becoming liable for their debt is a bad idea. You are already liable for your own bills. Nobody needs the additional burden of liability. You become responsible as the co-signor to pay off the loan if the primary borrower manages to default.

Your credit score can be severely affected if you become a guarantor or a co-signor to someone’s loan and they are unable to repay it. This is especially true if the amount is large.

Importance of Protecting Your Credit Score

You need to understand that your credit rating is fluid and tends to change depending on the financial decisions you take. Until we adopt a better way in determining someone’s financial responsibility this is the system we are stuck with. Moreover, your payment history, spending habits, and numerous other factors account for your present credit score.

You should give serious consideration to hiring a credit score monitoring service to consistently maintain a credit score of 800+. The monitoring service can keep a check on your credit rating and notify you immediately when things begin to slip. This will give you enough time to take steps to get your score back on track.

There are risks to having a perfect credit score too. You are at a serious risk of identity theft. Identity protection service can help you secure your identity and send alerts in case of any suspicious activity.

Should You Invest Your Money or Save it?

Invest Your Money

It can be difficult to pick between investing your surplus income and saving it. This is true for people that have just started working on their finances and those that have been investing for years. Ultimately, you need to decide the best course of action that will help you attain your financial goals. This can be through saving tools, investing options, or a combination of both.

Saving vs. Investing

Saving is generally regarded the safer route since your deposits do not decrease unless you make a withdrawal. This cannot be said for investments that depend on market fluctuations. Your stock option may go up today only to decline tomorrow.

However, savings will not allow your money to grow as you would like. In some cases, the interest offered barely matches the inflation rate.

This means that money parked in savings options tend to lose purchasing power over a longer period of time. Investing is a great option when you want to beat inflation and receive higher returns. However, you should know that investments are subject to market risks and you may not always get the return you hoped for. Sometimes, investments end up being worthless after a market crash.

Pros and Cons of Savings

There are several advantages of parking your money in a savings tool, such as savings accounts, savings bonds, certificates of deposits, or money market accounts. The biggest advantage is that there is no immediate risk to your dollar amount in the savings option.

Your money won’t reduce as long as you don’t make a withdrawal. You can reach your goals in time with minimal risk. You can also plan your finances better since you know exactly the kind of money you need to save each month to hit the goal.

However, that doesn’t mean that savings is not without its drawbacks. For instance, your money may not increase in value at par with the inflation rate. Basically, the amount of money you have parked in your savings option may lose value each year even if the dollar amount is not reduced.

Another downside to this is a decrease in purchasing power which may be possible in 2021 if there are more tax cuts but this is another topic. You need to set aside a higher percentage of your income each month than what you would need to if you got higher returns by investing.

Pros and Cons of Investing

Investing is an excellent option if you want to save money and see it grow. However, you need to be ready to bear the risks of market fluctuations. The potential of interest in investing is far greater than savings. Whether you invest in traditional stock options or use smart options, like investing apps and robo-advisors, you could stand to receive higher returns.

Another benefit of investing is that returns generally compound. This means that your investment earnings are put to work earning more money for you. You may enjoy better purchasing power since you won’t have to set aside nearly as much as you would need to do in the case of savings.

However, investing is not always the right option. You could find yourself in a financial bind if the investment rates bottom out right before you need the money. You may need to put off your plans for a better market day in such a scenario.

Follow Your Goals

It can be difficult deciding whether to invest or save. You should start by determining your goals before you decide. Goals are usually short term or long term and require being planned for differently.

1. Save for short term goals

You should not hesitate to open a savings account or purchase a CD if you want money by a certain date. There is zero risk of your money amount decreasing in this option.

2. Investing works in the long term

Investments tend to grow better and offer higher returns. You should consider investing if you don’t need the money by a specific date and are flexible in your approach. You should choose this option only if can afford to delay your monetary need by a few years in case the market takes a downward turn.

3. Comprehensive approach

You can follow a customized plan that combines investing with saving. You can divide any surplus cash you have each month in savings for short term goals and investments for the rest.

Six Strategies That Can Help You Emerge a Winner in a Bear Market

Bear Market

New or inexperienced retail investors often believe that a bull market means an opportunity to make money and a bear market is synonymous with losing money. Although the market’s trajectory can make your investment fluctuate in value, it does not necessarily mean that you cannot make profits during a bear market.

In fact, for the discerning investor, there can be excellent potential opportunities to invest during a bear market. Astute investment choices during a bear phase can bring enormous profits after the market rebounds.

This post discusses six useful strategies that you can employ during a bear market to make profits.

Maximize your Roth IRA and 401(k)

Consistently purchasing index funds through your Roth IRA and 401(k) can be a smart way to develop an investment portfolio with a high potential for profit. The stocks you purchase during a bear market would then get back up in value as the market recovers.

In the long run, maximizing your 401(k) contributions is highly profitable, especially if your contributions are matched in part or full by your employer. The money in your account can then be used to invest in a large variety of stocks and you can enjoy the rewards after the market climbs up.

Choose Dividend-Paying Stocks

Dividend-paying stocks can keep a steady income stream coming during recessionary economic conditions. This is one of many reasons why they can be a prudent investment choice during a bear market. While stock valuations of a company can be decided mostly by market buying and selling trends, the company profits usually determine the dividend payments.

Large businesses that are strong in their fundamentals are more likely to be immune to market conditions and will keep paying dividends to shareholders consistently. This means that your income stream is maintained even if a downturn causes the stock market values to plummet. The stock price increases after the market recovery, thereby also increasing the value of your portfolio.

Invest in Businesses that are Profitable and Reliable

When a recession or market downturn causes the stock valuations of highly profitable companies to go down due to high levels of selling, it can present a compelling investment opportunity for you.

Panic can cause many casual investors to quickly sell their stocks when a recession seems impending. The selling frenzy that results can drastically bring down the value of companies, including the financially stable ones with robust potential for growth. These stocks can then be purchased at very low prices and you can wait for the market to recover for your rewards.

So, how do you find the right stocks to purchase during a bear market? Here are some important factors you can look at:

  • Good financial ratings (rated A or above by independent agencies)
  • Good bond ratings (rated A, AA, and AAA)
  • Excellent sales figures
  • A strong growth outlook
  • Optimum debt-to-assets ratio

Choose Stocks that Historically Perform in Bear Markets

Bull and bear markets do not have the same kind of effect on all sectors of the economy. Quite a few sectors, including automobile, home improvement, machinery, and technology industries, tend to perform well in bull periods. However, some sectors show healthy performance during bear periods as well. These usually consist of industries that support basic human needs, including utilities, food and beverages, and pharmaceuticals.

Buy Top-Rated Bonds

Equity investments can go down in value during a recession or downturn. Bonds and bond funds present an investment that can be safer than equities and can provide guaranteed returns, allowing a means to offset your short-term losses. Municipal bonds, treasury bonds, and other corporate bonds rated AA or AAA can be stellar options. Exchange-traded funds that invest in these bonds and fixed-income investments of different kinds can also be viable options.

Purchase Stocks on Margin

Your brokerage firm can provide you a margin loan to purchase depreciated stocks. After the recovery, you can sell these stocks, pay the loan back, and still end up with a profit. Seasoned investors use this strategy frequently in bear markets.

However, it is important to exercise caution. If the stock value does not appreciate after recovery, you would have to take a loss and repay the loan out of pocket. Only stocks with a notable decline in value and a high chance of appreciation post-recovery should be considered.

Final Considerations

With these tips, short and long-term gains can be possible during a recession or downturn. Trying to “time the market” can be disastrous. Instead, invest regularly and treat market crashes as a unique investment opportunity if you have the financial capacity to ‘buy and hold’ for the long term.

5 Strategies Billionaires Use To Multiply Their Wealth

saving strategies

A lot of people seem to think that billionaires sit on mountains of money and just invent new ways of spending it. Which is obviously not true.

Billionaires actually don’t see money as something to spend on themselves. Money is simply there to invest and create. This mindset is what allows them to multiply their wealth day in and day out creating more jobs and businesses along the way which is why countries with billionaires are better off with countries without them.

Over the years, numerous researchers have studied dozens of self-made billionaires for several years and found that they have specific habits that help them build wealth. For starters, they focus on saving and bringing in multiple income streams.

They also tend to favor the long game and look for opportunities when others are panicking – all traits that help 10x their wealth building efforts.

The good news is, you can replicate what the 1% is already doing and increase your net worth fairly quickly. Here are some key strategies used by billionaires that you can also implement to have your money work for you.

Get into the investing game early

You may be sick of hearing this advice, but this is the reason why Warren Buffett is one of the richest people on this planet even despite his politics which have hurt so many people. The Oracle of Omaha bought his first stock when he was 11!

Buffett is unarguably one of the most successful investors on this planet today and he credits his success to his early investing habit. And many other billionaires attest to the same fact.

By starting to invest early, you can take advantage of the power of compounding to the maximum. Don’t wait for the “right time” – there is none. Save as much as you can, start small and then increase your investments gradually.

Be patient

Ask any mega successful investor about the fundamental principle of their investing strategies, and they will all say the same thing: have patience.

Let’s circle back to Mr. Buffett for a minute because there really is no better person to learn investing about. He first bought six shares of an oil service company (Cities Share) at $38 a share. He had identified the company as an undervalued stock and was confident of making a great profit.

Unfortunately, the stock lost nearly one-third of its value within a few weeks of Buffett buying it. Most people in his shoes would have sold the shares as fast as possible but he waited. Buffett held onto the stock until it rebounded to $40 a share and received $2/share profit.

But that stock didn’t stop rising. After Mr. Buffett had cashed in, he observed the stock rising to over $200 a share without him.

If you are a newbie investor, don’t sell at the first sign of trouble. Follow the buy-and-hold strategy that all billionaires swear by and you’ll substantially increase your odds of getting rich dividends in the long term.

Always keep in mind that the market has an inherent upward bias. Just look at the US stock market: it has survived two world wars and countless recessions and crashes, and still has always managed to bounce back stronger and it certainly will after the Wuhan virus stops spreading. This will happen after it warms up but this is another topic.  

Another benefit of holding onto your investments for longer is, their returns will be classified as capital gains. This means the amount of returns will be taxed at a lower rate compared to the tax rate charged at which your routine income. This is why almost every billionaire holds onto a significant amount of their assets in equity.

Put your money in real estate

There is a reason why pretty much every billionaire has invested in commercial and residential real estate. Investing in real estate has the potential to be profitable in the short-term as well as the long-term.

According to the National Association of Realtors, the value of real estate in America has appreciated by 6% each year since 1968.

Also, it can provide you with a nice steady stream of rental income every month like clockwork. Even if the real estate market crashes tomorrow and your property goes down in value, you’ll still have the monthly income to rely on.

Be strategic, don’t panic

When the market slows down, an ordinary investor starts panicking and looks for an exit. On the other hand, billionaires see it as an opportunity to make strategic investments that will pay off big time in the long run.

In the aftermath of the Greenspan/Frank 2008 recession, people called Warren Buffett crazy when he invested $5 billion in Bank of America. But he knew that even though the banking sector had experienced a crippling blow, it will bounce back. And it did. Buffett traded those shares for an incredible $16 billion in 2017 which is the same year America emerged out of the recession because of the 2017 tax cuts.

So, no matter how bad it looks at any point in time, don’t do what inexperienced investors do. Instead, do what billionaires do and look for growth and value stocks that can be bought at a steep discount.

Use tax saving strategies

Billionaires understand that using some smart tax strategies, it is possible to reduce their tax burden. Some of these strategies include setting up trusts to pass down their wealth to the future generations and holding most of their assets in equity.

You can also shrink down your tax bill in a variety of ways, such as:

  • Claiming as many tax deductions as you can: mortgage interest, HAS contributions, 401(k) contributions, student loan interest deductions, medical expenses deductions, state and local taxes deductions, charitable contributions, and more.
  • Increasing the contributions to your retirement accounts to the maximum amount possible.
  • Holding your equity investment for at least 1 year to take advantage of capital gains taxes.

Final word

Despite what you may think, most self-made billionaires are not Ivy-League educated geniuses with advanced degree in finance. Heck, most of them never even went college! But there’s a big difference between getting a degree and getting an education.

If you want to invest like a billionaire, start thinking like one. Instead of thinking you’re not ready or getting fixated on short-term gains, learn how to take calculated risks. We are living in times of turmoil right now, and most people are selling quality companies at rock bottom prices due to fear.

This is the time to take advantage of that gloom in the market and score yourself a deal. This is the time to buy because America will rebound soon as already indicated and the rest of the world will rise with it (though not as much because most countries have leaders who are not cutting taxes and regulations but this is another topic too).

Strategies to Help You Pay Down Your Mortgage in 15 Years


Throughout the years, the fixed-rate 30-year mortgage has remained the most popular financing option for homes. This empowers Americans to own property pretty early in their lives, largely due to the affordability of the 30-year mortgage. With reasonable monthly payments, even young adults are able to easily afford living on their own property, while also enjoying the perks of an active social life.

And yet, what many Americans do not realize is that this seemingly helpful mortgage plan comes with its own share of pitfalls. This includes:

  • A long, drawn-out payment period, with the initial years contributing more to the interest amount, than to the actual principal amount of your home.
  • A high interest amount that is paid out over the 30-year plan.

In fact, many people find themselves making mortgage payments even years after their retirement, when they are more likely to feel its pinch.

For this reason, an increasing number of Americans have wizened up and found clever ways to reduce their mortgage period, while still keeping their interest rates and monthly payments at an affordable limit. Here are 5 simple tricks to help you make the switch.

Re-finance your current home loan

In the rush and excitement of owning your own property, chances are you took the first (or second/ third) 30-year bank loan you could afford, with minimal research. Now when you look deeper, you may be shocked to discover the high interest rate charged by this “affordable” loan. Fortunately, you can get out of this rut by re-financing your home loan after carefully considering all variables. This includes:

  • Timeframe of the loan: With long-term loans (above 15 years), you end up paying a significant amount of interest, collected over the entire duration. With short-term loans (below 15-20 years), your monthly payments may be higher, but the interest is collected within the first few years. Following this, a larger contribution goes towards the actual principal amount of your property.
  • Interest rate: You should consider re-financing of your mortgage, only when the lender is able to reduce your rate of interest by at least 1%. If not, the costs associated with re-financing may outweigh any benefits gained from it.
  • Cost of re-financing: Most mortgage plans will have a penalty clause, which outlines the amount you pay if you do not last through the 30-year period. You will need to pay this amount off when you re-finance your mortgage. In some cases, the lender may wave off this amount, but only if you re-finance the loan with the same lender. Check all variables before you consider this option.

Redirect all unexpected savings, windfalls, and tax refunds towards your mortgage

Homeowners (and there’s more of them now because of the amazing economy because of lower taxes) have the option of making “extra” payments – beyond the expected monthly payments – towards your mortgage. The advantage of this option is that it is typically directed towards the principal amount, and not towards the interest.

In turn, this can reduce your mortgage period, also reducing the total interest amount you pay on the loan. So, try to make as many such extra payments as possible on a yearly basis.

These could come from a bonus at work, an unexpected inheritance amount, or even a tax refund at the end of the year. The more “extra” payments you can make, the faster you can clear your mortgage. Ironically, you will also end up paying a lower amount on the total loan amount.

Save on a weekly basis for your monthly mortgage payments

Typically, the lender will expect you to make monthly payments through the year. That is 12 payments in total every year. But consider if you were to save for these payments, not on a monthly basis, but on a weekly basis.

So, if your monthly payment is $1,000, you save $250 every week. This is easily possible with a little bit of planning. (Many employers are also agreeable with fortnightly payments).

In this case, you will end up saving $250 x 52 weeks every year, which is equivalent to 13 monthly payments. With this, you would have saved up enough for at least one “extra” monthly payment for the year, and thus stand to gain all the benefits outlined in (2) above.

Become a landlord

Despite owning their own residential property, it is surprising that many people rarely consider becoming a landlord to make/save extra money, and redirect this towards extra mortgage payments.

Renting a part of your property – like the basement as an independent suite, or a room as a holiday accommodation option through Airbnb – is one of the most surefire ways to make more money using what you already have. You could also consider renting your garage to a local business for storage.

Avoid loan sharks and scamsters

In the bid to refinance your 30-year mortgage, ensure that you do not fall prey to greedy loan sharks or too-good-to-be-true fraudsters. Many so-called “mortgage accelerator programs” are intentionally designed to be unaffordable in the long term, and also come with heavy penalty clauses that are nowhere buyer-friendly.

It is better to be patient yet consistent with your home’s mortgage payments, even if it is drawn-out across 30 long years, than to lose your home altogether due to a dubious finance scheme (like social security). You should also get a second opinion from a trusted person before you consider making the switch

7 Personal Finance Tips to Boost Your Savings

personal finance

The US economy, by any yardstick, is the strongest it has ever been in a very long time and Americans are making more money than they did in the past couple of decades. Data from the Council of Economic Advisers (CEA) shows that since December 2017, the disposable income of the average American household has increased by $5,205.

Which means if you have been planning to boost your savings so that you have something to fall back on for a rainy day, now would be a great time to do so.

Given here are seven easy-to-follow personal finance tips that can help you boost your savings.

1. Save First, Spend Later

One of the fundamental mistakes that people tend to make when it comes to saving money is that they pay all their bills first, and then try to save what is left in their account by the end of the month. In most cases, they do not have anything left in the account by the end of the month, so they do not save anything.

Instead, make it a habit to pay yourself first, before you pay your bills (but make sure you pay your bills and if you have to stop going out to eat as much then you should do that which will be emphasized more later). This way, your savings are assured to grow on a monthly basis, which can go a long way in building a financial safety net for you in the long run.

2. Follow the 24-Hour Rule

One of the most effective ways to reduce your expenditure is to follow the 24-hour rule. Nearly 85% of Americans say that they tend to make impulse purchases from time to time. Nearly 20% of Americans say that they have spent more than $1,000 on impulse purchases at least once.

In order to make sure that you only buy what you need, follow the 24-hour rule. Whenever you want to purchase something, do not rush to the store or go to immediately. Instead, sleep over the decision for 24 hours. The next day, if you still think it is worth spending your money on, go ahead and buy it.

3. Automate Your Savings

Let’s face it – not everyone has the discipline to save money on a weekly or monthly basis. Some people are like the state of California and the city of Chicago and San Francisco! You have to break apart from these bad habits.

From time to time, we tend to spend more than we should, which leaves us with nothing to save. To avoid this from happening, you can automate the process of saving money. Set up a recurring transfer service so that a certain amount of money gets automatically transferred from your checking account to your savings account – month after month.

4. Cook Your Meals at Home

The Bureau of Labor Statistics reports that the average American household spends more than $3,000 on eating out every year. It is a colossal waste of your hard-earned money, since you can cook your own meals at a fraction of the cost and watch a movie or a show at the same time or still the same converse happily with your family.

If you are too busy to cook every day, you can follow the ‘freezer cooking’ strategy. You can cook your meals whenever you have time, put them in the freezer, and reheat and eat it whenever you want. It does not, however, mean that you should stop eating out altogether. Just save it for the weekends and special occasions!

5. Goodbye Cable TV, Hello Online Streaming

The average American household spends as much as $100 on cable TV every month. Instead of wasting money on cable, you can subscribe to Netflix, Amazon Prime, or Hulu, each of which will only cost you around $10 a month (and still watch Transformers and Sicario via Redbox!). Not only can you save a lot of money, but you also get to watch excellent shows like Narcos via those methods. You can watch Better Call Saul, Bosch, and Ray Donovan via the internet (it’s really difficult to live now without the internet).

6. Rent It Out

If you own a house, you can earn some money on the side by renting out a portion of it. If you are not exactly thrilled with the idea of letting a complete stranger live in your home, you can rent out storage space for individuals and businesses. Either way, the money you earn can help you pay off your mortgage faster and save more in the long term.

7. Increase Your Contributions to Your Retirement Account

Many employers tend to match a certain percentage of their employees’ contributions to their retirement accounts. If your employer does the same, make sure you take full advantage of it by maximizing your contributions to the extent possible. The more you contribute, the more your employer will contribute – up to a certain extent. So, it is essentially free money which can boost your retirement savings considerably in the long run.

What is a Rapid Rescore & is it Something I Should Consider?

rapid rescore

Picture this scenario. You apply for a home loan and your mortgage broker or lender says that you might be able to qualify for a lower interest rate if you could improve your credit score by a few points.

The problem, however, is that even if you manage to reduce your loan balance, it can take anywhere from 30 to 60 days for the updated information to appear on your credit report which is not as long as the NFL thinks of ways every year to help the Patriots win but this is another topic. Unfortunately, you cannot afford to wait that long, since mortgages are time-sensitive.

How to update credit report quickly in such a scenario? This is precisely where a rapid rescore can help you.

What is a Rapid Rescore?

It is a process wherein you can get your credit report updated quickly through your lender. Rather than waiting for the credit bureaus to update your report on their own – which can take anywhere from 30 to 45 days – you can submit the updated information to your lender, who can then submit it to the bureau and get your report updated immediately.

How Does Rapid Rescoring Work?

It is a two-step process.

The First Step

You need to inform your lender of the changes to your credit history that are not reflected in your credit report yet, provide proof for the same, and place a request for a rapid rescoring.

For instance, if there is an erroneous entry in your credit report which states that you defaulted on a loan, when you actually did not, you can bring it to the attention of your lender and get it removed immediately.

Similarly, if you recently paid off a personal loan or a portion of your credit card balance to bring down your debt-to-income ratio, you can request your lender for a rapid credit rescore.

The Second Step

Once you provide your lender with all the information they need, they will contact the credit bureau, provide them with the updated information, pay a fee, and get your credit report updated.

Can an Individual Place a Request for Rapid Rescoring with a Credit Bureau?

Rapid rescoring is essentially a service provided by lenders. Individuals cannot approach credit bureaus by themselves and place a request for a rescoring. So, you can only get it done through your lender.

How Long Does the Rescoring Process Take?

It usually takes anywhere from two to five days. In some cases, it might take up to a week.

What Does Rapid Rescoring Cost?

It does not cost you any money, as the service is offered completely free of cost. Your lender, however, has to pay a fee – anywhere from $25 to $50 – in order to get your credit report updated. They cannot pass on the costs to you, as they are prohibited by federal law from doing so.

The Fair Credit Reporting Act, which was passed in 1970, clearly states that an individual cannot be charged for disputing wrongful information on their credit report. Since rapid rescoring is essentially an ‘expedited dispute process’, the lender cannot charge you any money for it.

What Are the Benefits and Limitations of a Rapid Credit Rescore?


Rapid rescoring can help you update your credit report in very short period of time, improve your credit score, and help you qualify for lower interest rates.

Let us assume that you apply for a mortgage and the lender tells you that if you can raise your credit score by 20 points, you can pay a smaller down payment and qualify for a lower interest rate. In such a scenario, you can pay off a loan or reduce your credit card balance, submit the updated information to your lender, get a new and improved credit score, and qualify for a lower interest rate.

Let us assume that you are planning to apply for a mortgage, but there is an error in your credit report. It is reported that you failed to repay a loan, even though you paid it off a couple of weeks ago.

Again, in this scenario, you can contact your lender, provide them with the relevant documents, and request to have your credit report updated. Within a few days, you can get a new and improved credit score and apply for a mortgage.

In these types of cases, the expedited rescoring process works to your advantage, as you can raise your credit score by a few points within days and qualify for a low-interest rate loan. It is simply not possible under normal circumstances, as it can take as long as two months to get your credit report updated.


A rapid rescore can only expedite the process of updating your credit report. It does not make any difference to your actual credit score.

Let us assume that you can increase your score by 20 points by paying off one of your credit card accounts. Under normal circumstances, it can take up to 60 days for your credit score to be updated. If you request for a rapid credit rescore, you can get it updated within two or three days.

In both cases, your credit score only increases only by 20 points. The only difference is the time it takes to get it done.

Can a Rapid Credit Rescore Repair Your Credit?

No, it cannot. It is important to understand that rapid rescore is not the same as credit repair. It can only update your credit report. It cannot remove any negative information from your credit report.

For example, if you pay off a delinquent account, you can get it updated quickly through by requesting for a rapid rescore. You cannot, however, get it removed. It will stay on your records for seven years, like it normally does.

Alternatives to Improve Your Credit Score

If you have a poor credit score, there are a number of steps you can take to improve it.

  • Negotiate with your lenders to get your interest rates reduced.
  • Pay off your debts – credit cards in particular – aggressively. Make sure your debt-to-income ratio (your monthly debt repayments divided by your monthly income) does not exceed 36%.
  • Pay all your bills – irrespective of the amount – on time. The very fact that you are late on your payments can hurt your credit score, irrespective of how much you owe.

Most importantly, make it a habit to check your credit report on a regular basis and fix the errors (if there are any) immediately. If you keep tabs your credit reports, there is no need to worry about fixing anything in the last minute.