Moat Mountain Traverse

DIY Investing Is the Only Way to Avoid Conflicts of Interest

I have become a personal finance junkie and proponent of do-it yourself (DIY) investing over the past few years. However, this was not always the case. My wife and I used a financial advisor for the first decade of our careers.

In retrospect, we learned that we were paying far more than we realized. In the process, we also received lousy advice. One glaring example that I recently shared was being sold a high-fee variable annuity when rolling over a retirement account after changing jobs. Another was bypassing work-sponsored 401(k) accounts with tremendous tax benefits to invest in products sold by our advisor.

Even after learning how much we were paying and how bad the advice was that we had been receiving, we were still reluctant to become DIY investors. Our initial reaction was to simply find a better advisor.

While trying to find a better advisor, I learned that the advice we were receiving was pretty standard. It was a result of a system loaded with conflicts of interest between what is best for clients and what is best for advisors.

There are several different models for compensating financial advisors. Different models present different conflicts of interest. Each model also has other downsides.

I determined that the only way to eliminate the conflicts of interest inherent in advisor/client relationships was to eliminate the advisor and, you guessed it: be a DIY investor. You need to understand the different compensation models and inherent conflicts of interest associated with each. Then you can make a fully informed decision for yourself.

Commissions-Based Model

In the commission-based model, fees are paid to an advisor when he sells a product to a client. The financial industry justifies this model as a way to make financial advice affordable to those without the assets or income to pay for advice with the other models. To quote financial consumer advocate James Dahl: “Bad advice is too expensive at any price.”

The investment industry also claims that they offer this model because clients prefer it. It must also be understood that many clients prefer this model because they have no idea what they are actually paying. Fees can be difficult to decipher and are typically kept out of plain sight.

The first and most obvious conflict of interest in this model is that advisor payment is driven by sales. If an advisor does not make sales, he does not get paid. You may have options to pay down debt, invest in rental real estate, or invest in a 401(k) account with tremendous possible tax advantages that are in your best interest. However, there is no financial incentive for the advisor to guide you down those paths. His financial incentives are tied to selling you products on which he can make a commission.

It may be in your best interest to buy a certain financial product. However, the advisor has no incentive to sell you the simplest, lowest fee products (often the best option for you). Rather, the advisor has every incentive to sell you the most expensive products. These produce high commissions and often result in further, ongoing kickbacks to the salesman. This is why those receiving advice in a commissions-based model are more likely to be sold whole versus term life insurance and actively managed mutual funds, rather than low cost passive index funds.

Advisors operating in the commission-based model generally act under a “suitability standard”  rather than a “fiduciary standard.” This enables them to place your investments in complex and expensive investment products with hidden fees. These are often difficult to decipher, such as variable annuities and mutual funds with “12b-1” fees. Due to the low bar set by the “suitability standard,” advisors have little fear of reprimand or reprisal for not acting in a client’s best interests.

Assets Under Management Model

In the Assets Under Management (AUM) model of financial advisor compensation, an advisor is paid as an annual percentage of your assets under their management. Advisors working under this arrangement will point out that they are not incentivized to sell high commission, high fee products. Instead, they are incentivized to place you in the best investment products to meet your needs. The more money you accumulate, the more money they make. Therefore this model is sold as a win-win for both client and advisor.

Read More: How Advisors Kill Your Retirement Like the Walking Dead

However, there are some serious conflicts in this model as well. The most obvious is that just as the commission model relies on the sale of products, the AUM model relies on having assets under the advisors’ management for them to be paid. Therefore, they would face the exact same conflicts of interest any time you’d be better served by putting your money outside of their management.

There may also be incentive for advisors to recommend taking inappropriate amounts of risk. There is a significant upside for an advisor to take risks to grow your portfolio. Why? The advisor is paid by a percentage of the portfolio. Advisors can diversify across many clients. Each individual investor has only one portfolio and bears the brunt of any investment losses.

On the flip side, many people are too risk averse. An advisor may be afraid to push an investor to invest in more appropriate, but volatile, assets. If the investor is not invested appropriately to meet his goals, but stays with an advisor, the advisor still gets paid. If the investor gets upset and leaves, even if the advisor gave appropriate advice, the advisor no longer gets paid.

There are other complications to this model, too. A client needs to already have substantial assets accumulated for this model to be viable for the advisor, while charging a reasonable fee. For example, many firms require minimum assets of $500,000-$1,000,000 in order to begin managing your money with an AUM model. While this may be a viable option for some, it leaves many who most need good financial advice completely out in the cold.

Robo-advisors are a subclass of AUM that claim to offer an alternative to this problem. They are quick to point out they can offer a fee structure to all clients that was traditionally available only to clients with a million dollars or more. Their fees range from .25-.5% of AUM.

Podcast: The Pros and Cons of Robo-advisors

Sure, the price of robo-advisors is similar to low-cost traditional AUM advisors. It is a bit disingenuous, though, to assume that robo-advisors offer the same level of value that is provided to millionaire clients receiving individual attention. The potential value of good financial advice worthy of its cost in individualized tax planning and behavioral modification for those that need help in those areas. Instead, robo-advisors are able to offer such relatively low fees by providing cookie-cutter advice and service that is easily scalable with technology. This excellent article from the blog GoCurryCracker provides a detailed analysis of the limitations and fees of robo-advisors.

Finally, while advisors operating in the AUM model may act as fiduciaries, not all do so all of the time. They may still operate under the suitability standard. Or they may operate under different standards with different clients. They maybe even with the same client in different scenarios. In the confusing financial advice world, it is your responsibility as a consumer to find out if your advisor is held to a fiduciary standard.

Fee-Only Model

In a fee-only model, you pay as you go for financial advice. This term is traditionally applied to “fee-only” financial advisors. However, you could also consult with an attorney or accountant for specific legal or tax advice under this model. This is generally seen as the model with the least conflicts of interest. Thus, this offers you the best chance at getting good advice. However, it too is imperfect.

The obvious conflict here, as in any situation where you pay for advice by the hour, is the potential to make things more complicated and thus costly than necessary. For example, a person may be equally served by holding a portfolio with 3 funds as 10 funds, but it is easier to justify fees and ongoing service on a more complex portfolio.

Transparency with fees is the biggest positive of the fee-only model, but it is also a potential drawback. The other models keep fees mostly out of sight and out of mind. You will typically pay much less in a fee-only model over time. However, because you see every fee you pay in the fee-only model, people may be inclined to avoid needed advice to avoid the fees causing underutilization of services.

What Will You Do?

We all must consider many factors when deciding whether or not to seek professional financial advice. If seeking advice, there are many options to go about obtaining it. Unfortunately, none of the options is perfect.

All methods of paying for financial advice present different conflicts of interest as well as other limiting factors. Before choosing an advisor, it is wise to understand the model in which he operates. This will show you the inherent conflicts of interest present, as they will influence the advice you receive.

It doesn’t matter how they are paid. Every financial advisor will face some conflict between what is best for a client and what is best for themselves when giving financial advice. The only way to eliminate all of the conflicts is to educate yourself and become a DIY investor.

Have you tried your hand at DIY investing? What has been your experience, when compared to traditional advisors?

 

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The Trail Magic Dollmaker: Arlette Laan’s Fiber Arts

CAMP USA Minima SL 1 Tent Review

3 Winter Window Treatments

When staged according to the season, window treatments can make a huge difference in how someone feels about a space. In this short post we’ll cover 3 window treatments that are well suited to the winter season.

Image Source: Flickr

Layered Curtains or Insulated Curtains
Use heavy fabrics or layered curtains over the windows to keep out drafts. Or, purchase insulated curtains with built-in thermal backing. Source: ApartmentTherapy

Block Out Blinds
They’re reasonably straightforward to fit as long as you are absolutely pinpoint accurate with the measurement for the vertical runners, as they must fit the window frame exactly. I managed with only a few expletives. They’re perfect at night as they block out light as well as draughts, but need to be opened during the day to let the winter sun in, so they are not effective during the hours of precious winter daylight. Source: TeleGraph

Shutters
Plantation Shutters can be considered the best value winter window treatments for their aesthetic appeal as well as their ability to increase the selling price on your home (in addition to keeping you warm!)
Plantation Shutters, especially those constructed of wood, have insulating elements and when closed the solid, durable structure of the slats will keep the cold air out of your windows during the winter and will shade your home from the scorching sun during the summer.
For those looking for a cheap, fast solution for your windows, Plantation Shutters are probably not the best choice. However, if you are looking to spice up the room with some elegance and desire a long-term solution that will add value to your home- then this is the option for you! Source: Blog.ShadesShuttersBlinds

Contact:
Universal Blinds
601 – 1550 W. 10th Ave
Vancouver, V6J 1Z9
Canada
Phone: (604) 559-1988

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4 Tips to Prepare Your Bathroom for Winter Months

Content originally published and Shared from http://perfectbath.com

Winter is on the horizon. If you haven’t prepared your bathrooms for cold weather, now is the time. Here are some tips to help you prepare your bathroom for the upcoming winter months, including: checking windows and pipes, adding some heating, setting the mood & winterizing your toilet.

Image Source: Flickr

Below are 4 tips to prepare your bathroom for the winter months:

Check Windows and Pipes

Bathrooms can be draughty places, so it’s a good idea to check your windows for cracks and reseal any worn silicone. It might also be a good idea to check your pipes for cracks and leaks, as well as ensuring all your pipework is properly insulated. By ensuring there are no problems in your bathroom to begin with, you can avoid small problems getting bigger down the track, which can often happen in winter with frozen pipes causing expensive issues. Source: BathroomCity

Add Some Heating
Is there anything more unpleasant than having to make a trip to the bathroom in the middle of the night, only to discover that the entire room is freezing cold?  You can avoid this unpleasant scenario – to a point, anyway – by adding a heating element to your bathroom during the winter months. If your bathroom doesn’t already have its own heat source, add a space heater or other portable heating device that can be switched on to heat up at least part of the room as quickly as possible. Source: AmericanBathInd

Set the mood
Speaking of simple swaps, trading out bathroom accessories to fit the season is a great way to change the look of the bath. Display cozy, plush robes to keep bathers warm when stepping out of the shower and make guests feel right at home. Consider installing robe hooks close to the shower door for easy access. For added flair, incorporate accessories such as towels in a festive pattern, splashes of gold in soap dishes, or hints of bronze in candle holders and picture frames. Source: WaynecoJournalBanner

Winterize Your Toilet
You may be unaware that you can winterize your toilet and prevent this fixture from freezing during cold weather. In fact winterizing the toilet is quite easy and does not take much time at all to complete. This process involves using plumber’s antifreeze, which you can buy at most home improvement or hardware stores.
Before you pour in the antifreeze, you should first empty the water out of the back tank. Once the water is drained, you can then pour in the antifreeze and then flush it into the bowl and drainage system. After you flush, you should then pour a half cup of plumber’s antifreeze into each sink, shower, and tub in your house. This step winterizes the entire drainage system in your bathroom. Source: KitchenCabinetKings

Contact:
Perfect Bath
Phone: Toll Free 1-866-843-1641
Calgary, Alberta
Email: info@perfectbath.com

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How to Retire Early With a Roth IRA Conversion Ladder

If you are planning on early retirement, one of your biggest concerns is probably how you will be able to survive in the retirement years before you turn 59 1/2. Like most people, the vast majority of your savings and investments are probably in tax-sheltered retirement plans. Of course, you will also have to pay the 10% early withdrawal penalty should you tap those accounts.

This can make the tax cost of early retirement withdrawals prohibitive, and might even cause you to rethink the whole idea of early retirement.

But rest assured that there is a solution to this dilemma. Known as the Roth conversion ladder, it will enable you to withdraw retirement funds early without having to pay the penalty tax — or even any tax at all.

The Roth Conversion Ladder Benefit: Tapping Retirement Early Without Paying a Penalty

There is a general rule on making withdrawals from any type of retirement plan. You will have to pay a 10% penalty on most early withdrawals before you turn 59 1/2. But the Roth IRA offers a workaround.

Resource: Current Roth IRA Income and Contribution Limits

Conversions made to a Roth IRA can be withdrawn both tax-free and free of the 10% early withdrawal penalty, as long as they are not taken until five years after the conversion has been made (since the tax was paid at conversion).

The IRS says the following on the topic:

“Distributions of conversion and certain rollover contributions within 5-year period. If, within the 5-year period starting with the first day of your tax year in which you convert an amount from a traditional IRA or rollover an amount from a qualified retirement plan to a Roth IRA, you take a distribution from a Roth IRA, you may have to pay the 10% additional tax on early distributions. You generally must pay the 10% additional tax on any amount attributable to the part of the amount converted or rolled over (the conversion or rollover contribution) that you had to include in income (recapture amount). A separate 5-year period applies to each conversion and rollover.”

You can use this loophole to access your Roth accounts anytime before you turn 59 1/2, but only after 5 years have passed since the conversion was made. So if you are 45 years old, and you want to retire at 50, you could begin making Roth IRA conversions now. If you make the first conversion at age 45, you will be able to withdraw that amount of money at 50, free from tax consequences.

Remember that this applies only to your conversion balances, and not to the investment income earned in your Roth account.

How to Set Up a Roth Conversion Ladder

The strategy is referred to as a “ladder.” This is because you will want to set it up so that it covers all of the years between your retirement date and when you turn 59 1/2. So if you plan to retire at 50, you will have to complete 10 annual conversions. This will enable you to withdraw funds tax-free between the ages of 50 and 59 1/2.

The first step in setting up the ladder is to determine how much money you will need to live on once you retire. You will then have to make annual Roth IRA conversions that match that amount.

So, if you believe that you will need $40,000 annually in retirement, that will be the amount of your conversion this year. You will then want to make an annual conversion to match each year of early retirement. Ideally, if you plan to retire at age 50, you should begin making these annual matched conversions each year beginning at age 40.

You should also make sure that all of you retirement assets won’t be depleted as a result of using the ladder. The ladder should only represent an interim funding source, until you reach age 59 1/2 and can begin accessing your retirement savings fully. The strategy is designed specifically to enable early-retirement, but should never leave you broke later on.

An Example of a Roth Conversion Ladder

Since the Roth conversion ladder is essentially a math equation, let’s demonstrate what it looks like using a chart. We’ll assume that you are 45 years old, and plan to early retire by 50. We’ll also assume that you expect to need $40,000 per year in early retirement.

Based on those numbers, here’s what your Roth conversion ladder will look like:

Roth Coversion Ladder Table

Year	Your Age	Amount of Roth Conversion	Amount of Roth Withdrawal	Source of Withdrawn Funds
2016	45	40,000	0	N/A
2017	46	40,000	0	N/A
2018	47	40,000	0	N/A
2019	48	40,000	0	N/A
2020	49	40,000	0	N/A
2021	50	40,000	40,000	2016 Conversion
2022	51	40,000	40,000	2017 Conversion
2023	52	40,000	40,000	2018 Conversion
2024	53	40,000	40,000	2019 Conversion
2025	54	40,000	40,000	2020 Conversion

The Tax Implications of Creating a Roth IRA Conversion Ladder

When constructing a Roth conversion ladder, you need to be fully aware of the tax implications of what you are doing. In each year involving a conversion, you’ll have to pay ordinary income tax on the amount converted. That means that if you are converting $40,000 per year, and you are in the 28% tax bracket, you will pay $11,200 in taxes each year.

That’s a heavy price to pay. Keep in mind that you will be doing it for the purpose of providing yourself with a tax-free source of early retirement income. That is, you are trading a tax liability now, for an income source that will enable you to retire early without a tax liability.

From a tax standpoint, it would be more beneficial to wait to begin the conversions until you actually retire. If you can do that, then you will be in a lower income tax bracket. As a result, the tax cost of the conversions will be much lower. For example, if the same $40,000 annual conversion were done when you were in the 15% tax bracket during retirement, the tax cost would be just $6,000 per year. However, for some people, this would eliminate the possibility of early retirement. It’s really a matter of your goals.

How to Minimize Income Taxes on the Roth Conversions, Too

There’s an even better tax strategy, if you are able to do it. Live on non-tax-sheltered savings and investments for the first five years that you are working the Roth conversion ladder.

Why five years? Remember that the rule is you must wait at least five years after making the Roth conversion in order to withdraw the converted funds tax-free and penalty free. If you can live on non-retirement assets during those five years, you can make the Roth conversions with minimal tax consequences, since you will essentially have no other taxable income.

Considering that a standard deduction and two personal exemptions gets you an immediate $20,000+ in non-taxable income, you would only have to pay tax on $20,000 of the $40,000 Roth conversion. That would mean your tax liability would be only slightly higher than $2,000.

After five years have passed, you can begin withdrawing your conversion balances from your Roth IRA account each and every year until you turn 59 ½ — without having to pay any taxes or penalties on the amounts withdrawn.

So, if you have been planning for early retirement, but you’ve been spooked over how to access retirement funds without being clobbered by taxes and penalties, the Roth IRA conversion ladder could be the solution to your problem. And remember, consult a tax specialist before making any decisions as the consequences of making a mistake can be costly.

Where to Open a Roth IRA

Your options for a Roth IRA account are vast. A few of our favorites here at Dough Roller are:

• Vanguard
• Betterment — see our review here or visit their site
• Fidelity
• OptionsHouse — see our review here or visit their site
• Wealthfront
• TradeKing — see our review here or visit their site

You can also see our comprehensive list of IRA brokers here, along with more options and information.

What do you think about the concept of a Roth ladder? Do you intend to implement something like this in your own retirement plan?

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Winter Hiking and Mountaineering Glove Systems

Synchro Vancouver in Mount Pleasant

Synchro by Bold is a gorgeous 5 storey mid-rise building coming to the up and coming Mount Pleasant area. This exciting new development will consist of 13 1-bedroom suites ranging from 532 – 653 sq ft and 16 2-bedroom suites ranging from 724-1062 sq ft.

Within walking distance of Synchro you will find lovely Brew pubs, Cafes, Boutique shops and great restaurants. Experience the convenience of Mount Pleasant and the surrounding areas such as Olympic Village and False Creek.

Pricing has not yet been determined.  Please register and join our VIP list to be one of the first to receive information.

 

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Synchro Vancouver in Mount Pleasant

Synchro by Bold is a gorgeous 5 storey mid-rise building coming to the up and coming Mount Pleasant area. This exciting new development will consist of 13 1-bedroom suites ranging from 532 – 653 sq ft and 16 2-bedroom suites ranging from 724-1062 sq ft.

Within walking distance of Synchro you will find lovely Brew pubs, Cafes, Boutique shops and great restaurants. Experience the convenience of Mount Pleasant and the surrounding areas such as Olympic Village and False Creek.

Pricing has not yet been determined.  Please register and join our VIP list to be one of the first to receive information.

 

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5 Ways To Improve Your Mortgage Qualifying Success

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How to Use Allowances to Teach Your Kids About Money

As parents, our number one goal is to raise our kids to be kind, compassionate human beings who can function in the world as independent adults. In the early years, we’re often focused heavily on those “kind and compassionate” terms. Our goal then is to teach kids not to hit, bite, or pitch fits. You know, to generally control their emotions and think about other people.

But as kids age, it’s essential that we also start teaching them how to become independent. Unfortunately, all too many kids reach college and young adulthood without understanding some of the basics of said adulthood. This includes how to manage their money. In fact, surveys show that a majority of teenagers don’t think their parents have taught them much about how to manage their finances.

Luckily, it’s not that hard to turn this situation around. Parents should, of course, talk with their kids about managing money. They should cover topics like investing, saving, and paying for college. But parents can also use one old-school tool to give kids hands-on experience with managing money: the old-fashioned allowance.

Allowance as a money-management tool

Some parents these days have pulled back from giving kids an allowance, even a small one. After all, we shower our kids with gifts for holidays and birthdays, pay for their wardrobes and technology, and meet their basic needs. Why do they need an allowance?

This attitude makes sense — if you see an allowance as just one more entitlement of childhood.

But the fact is that allowances can be a valuable teaching tool. The earlier you start teaching your kids how to manage money, the better off they’ll be in the long run. And since it’s illegal for your six-year-old to get a job, an allowance might be the best way to start her on the track to eventual financial independence.

The key, of course, is to help your kids manage their allowances, rather than letting them blow it on whatever the toy of the week might be. Here are some tips to help you do just that.

Have them use allowance for basics

One way to restrict how kids use allowance is to require that they cover some of their own basic needs using those funds. Older kids, for instance, can purchase their own school clothes and supplies based on a pre-set budget.

Podcast: What All Kids Should Know About Saving and Investing

You need to be careful with this option, of course, to ensure that your kids are properly fed, clothed, and prepared for school. But giving kids a weekly allowance that is meant to cover their school lunches (or packed lunches, if they want to be more frugal) can be a wise idea.

Some parents even find that giving kids an allowance for grocery spending is helpful. Letting kids pay for their own breakfasts and lunches on a budget is an excellent way to help them understand why Pop-Tarts for breakfast every morning is both physically and financially unhealthy!

Use the three-jar method

Another option is to enforce good financial habits for kids with a three-jar method. Instead of a single piggy bank, give kids a jar for saving, spending, and giving. These are the three main “buckets” of our personal financial lives, after all. This way, kids can learn to save and give early on.

You may want to enforce a three-way split between these jars. Alternatively, have your kids put a certain percentage of their allowance into saving or giving jars. This is up to you to decide, and to tailor, as your kids age.

The goal here is to show that the spending jar can be used at any time for literally any whim. Kids will quickly learn, though, that dollar store tchotchkes aren’t as satisfying as saving up for toys that they’ll enjoy for the longer-term. It’s always okay to encourage kids to save a little longer for things they really want. But you should never outright prohibit them from spending money in the spending jar. They’ll learn from experience, as we all do.

Money in the savings jar can go a couple of ways. Some parents prefer to let kids use these funds to save for a specific, concrete goal, like a new video game. If this is your approach, be sure it will take your child a few months or a lot of hard work to save for this one thing.

Another savings jar approach is to make a monthly deposit of these funds into a savings account. Once there, kids can get some experience with saving in a banking environment, which can be fun. Plus, you can show them how their money grows over time because of compounding interest.

Related: Top Online Savings Accounts for Kids

The giving jar is similar to the spending jar, except that the spending has to be on someone other than the child. It’s usually best not to restrict kids’ impulses here, either. If they want to give a few bucks to a homeless person on the street, direct them towards buying that person some food if that makes you more comfortable. But don’t restrict “giving” to just donating to a charity. This can really put a damper on kids’ enthusiasm to altruistically meet the needs and wants of those around them.

The three-jar method has gained popularity recently because it works well. Even the youngest kids, who only get a few dollars a month in allowance, can see this division at work. And it can easily be tailored into a three bank-account method for older kids who are getting more substantial allowances, or who have jobs outside the home.

Consider commission-based chores

What if you’re uncomfortable giving your kids money to basically just exist? You’re certainly not alone! In fact, paying kids for doing nothing is one of the main arguments against allowances.

You can help kids understand and manage money without going down this route, though. Instead of a set allowance that your child earns no matter what, offer commission for certain chores.

In our house, it works like this: Our four-year-old has a short list of expected chores, including making her bed, putting away her clothes, and feeding the cat. She has to do those chores first. Then if she wants to, she can choose other paid chores, like folding towels, helping with the dishes, mopping the floor, or washing the stairs.

Sure, she’s not great at these other chores. But she is capable of doing them, for the most part. And she gets paid anywhere from 75 cents to $1.50 per chore, depending on how long it will take her. We chose these amounts specifically because the quarters can easily be split three ways into her spending, saving, and giving jars.

As she ages, her list of expected daily and weekly chores will increase appropriately. Her commission-based chores will get more complex and begin to take more time. We may eventually use a blend of allowances to cover some basic expenses and commission-based chores. This way, we can cover spend/save/give goals as well as wants.

Regardless of how you decide to pay your child, and how much you decide is appropriate, giving your kid money to handle from an early age is a great idea. It’s one sure way to boost their financial literacy in a hands-on environment.

Let us know in the comments if your child gets an allowance, or if you’ve tried the three-jar method. How did it work out for you?

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Thule Versant 50 Backpack Review

Synchro by Bold – 29 West Coast Modern Presale Condos in Mount Pleasant

At a Glance

• 5-storey, mixed-use mid-rise
• 29 1- & 2-bedroom residences
• 3 ground floor retail space
• 1 ground floor restaurant space
• 38 underground parking spaces
• direct access to bike routes & public transit
• close to Main Street boutiques, cafes, restaurants
• proximity to post-secondary schools
• near Brewery Creek, Olympic Village, False Creek

Human-Centred Design
Introducing Bold Properties’ flagship collection of 29 West Coast modern homes in Mount Pleasant. Featuring an integrated system of smart home technologies – from wireless climate and lighting control to keyless entry – and a philosophy based on human-centred design, Synchro has been developed with quality of life at its heart. This is a rare, appointment-only opportunity to own in Bold Properties’ vision of the future of Mount Pleasant.

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With Synchro, enjoy an outstanding range of walkable options for your day-to-day shopping needs. Directly opposite, Kingsgate Mall offers grocery shopping, a drugstore, a liquor store, clothing stores, a bank, an optician, dentist, and a hair salon. Within a two-block radius of Main and Broadway, you’ll find an enviable variety of bustling multi-ethnic restaurants to enjoy a night out. With a bus stop and bicycle route literally outside your door, mobility options are unparalleled! Kick back at Dude Chilling Park, relax with a coffee at Kafka’s, fill your growler at Main Street Brewing, groove to live music at the Biltmore, or pick up a book from the local Vancouver Public Library branch. Experience urban life and human-centred design in synchronicity, in the heart of Mount Pleasant.

Pricing for Synchro
As this is an appointment-only ownership opportunity, contact me to learn what purchase options are available.

Floor Plans for Synchro
Finalized floor plans have not yet been released. However, Synchro will offer 13 1-bedroom floor plans, ranging from 532-653 sq ft, and 16 family-friendly 2-bedroom floor plans from 724-1,062 sq ft.

Amenities at Synchro
Most homes include outdoor areas with either balconies or private landscaped roof decks. There will also be an outside amenity space that provides urban agriculture, a space for children to play, and a gathering area.

Parking and Storage
Synchro will provide 38 parking spaces in two levels of underground accessed from the lane, consisting of 8 small car, 16 standard car, 2 handicapped, 1 car-sharing, and 5 commercial parking stalls. There will also be 37 Class A bicycle stalls and 6 Class B bicycle stalls. In addition, a lane-accessed loading bay will service ground floor commercial tenants. All homes have in-suite storage.

Maintenance Fees at Synchro
Will be included in final pricing details.

Developer Team for Synchro
Bold Properties is a real estate developer fueled by innovation, creativity, and the needs of their customers. They meticulously design their developments in order to construct, nurture, and foster new communities across Greater Vancouver. Bold challenges the notion of typical in an effort to bring you the newest and greatest in real estate without compromising on tradition or quality.

Bold Properties have chosen Ankenman Marchand Architects to articulate their vision for Synchro. AMA is experienced in a broad spectrum of architectural, urban design, and community planning projects, including multi-residential developments, commercial projects, heritage restoration, and resort planning. At AMA, fresh ideas are paired with technical skill, to produce award-winning results. Their multi-disciplinary team finds thoughtful solutions to clients’ needs, using sustainable building practices and building information modelling. AMA’s strengths are in quality of service and the form and function of the resulting architecture, regardless of budget.

Expected Completion for Synchro
Although a completion date has yet to be announced, construction will begin in December 2016.

Are you interested in learning more about other homes in Mount Pleasant, along Main Street, or near False Creek?

Check out these great Mount Pleasant presales!

The post Synchro by Bold – 29 West Coast Modern Presale Condos in Mount Pleasant appeared first on Mike Stewart Real Estate Specialist 604-763-3136.

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3 Small Things that Can Make or Break A Small Business

Operating a small or mid-sized business is far from easy. Accounting Solutions Ltd. has always provided impeccable customer service to our loyal base of clients. In order to further our mission, we have put together some brief ideas that can … Continue reading →

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Kindred Moodyville by Fairborne

Coming soon to the up and coming Moodyville Neighbourhood of North Vancouver,  Kindred Moodyville is a fine collection of 96 homes consisting of 1 bedroom, 1 plus den and 2 bedrooms suites. Each home is is exceptionally designed with bright, spacious and modern interiors for the best livability in mind, complete with overheight ceilings and efficient floor plans

Moodyville Neigbourhood of North Vancouver is going under a massive transition. Currently consisting single family homes, this area was targeted by the City of North Vancouver as community to redeveloped into a new walkable pedestrian friendly neighbourhood.  Once completed, Moodyville will have 1500 homes within walking distance of Lower Lonsdale, with easy access to transit and trails to get you where you need to.

The post Kindred Moodyville by Fairborne appeared first on Vancouver New Condos.

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Kindred Moodyville by Fairborne

Coming soon to the up and coming Moodyville Neighbourhood of North Vancouver,  Kindred Moodyville is a fine collection of 96 homes consisting of 1 bedroom, 1 plus den and 2 bedrooms suites. Each home is is exceptionally designed with bright, spacious and modern interiors for the best livability in mind, complete with overheight ceilings and efficient floor plans

Moodyville Neigbourhood of North Vancouver is going under a massive transition. Currently consisting single family homes, this area was targeted by the City of North Vancouver as community to redeveloped into a new walkable pedestrian friendly neighbourhood.  Once completed, Moodyville will have 1500 homes within walking distance of Lower Lonsdale, with easy access to transit and trails to get you where you need to.

The post Kindred Moodyville by Fairborne appeared first on Vancouver New Condos.

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What to Do When Your Employer’s Retirement Plan Sucks

Maybe you are the person who eagerly devours benefit booklets and paperwork first thing when you get a new job. Or perhaps you’ve been at your office for 10+ years and you just realized that you should probably start saving for retirement. Regardless, at some point you are likely to be faced with the task of navigating your employer-sponsored retirement plan.

Some small businesses may offer something like a Simplified Employee Pension (SEP IRA), or Savings Incentive Match Plan for Employees (SIMPLE IRA). Others might have nothing at all. Overall, though, you’ll find that most employers with retirement plans will be offering a 401(k).

Learn More: The IRA Investor’s Checklist

So what if, after looking through the paperwork you received from accounting or HR, you find yourself facing a harsh reality? You figure out the good news: your employer does offer a retirement plan. But the bad news? Well, the plan they offer is terrible. Nevertheless, you want (and need) to start saving for retirement.

So, the question becomes: what do you do when your employer’s retirement plan sucks?

Take the free money (at least they offer a contribution match…right?)

This strategy is pretty straightforward. You should contribute to your employer-sponsored retirement plan, but only enough to get the full employer match. Then, contribute any additional retirement savings to your own IRA.

Regardless of whether your employer’s retirement plan is awesome or awful, the same rule applies. Conventional wisdom states that you should contribute enough to your employer’s retirement plan to get every penny of the employer match. This is true whether the match is a token 1%, the more standard 6%, or anything else. You should always max out the benefit.

An employer match is essentially “free money,” which you’ll get just for setting aside your own cash for retirement. Loosely speaking, it’s like an immediate 100% return on your savings! You contribute $X, they contribute $X. It’s nothing to scoff at.

The 2016 contribution limit for a 401(k) is $18,000, and it’s staying the same for 2017. So, chances are that even if you are contributing 6% of your salary (to take full advantage of a relatively generous 6% employer match), you won’t be maxing out your 401(k). This means that if you still have money you want to set aside for retirement, you will have to use another retirement vehicle. This is where a traditional (or Roth) IRA comes into play.

For most people, this plan will be more than adequate for setting aside the level of retirement savings they “can afford.” For the most extreme retirement savers, or those individuals seeking Financial Independence, the “some in the 401(k), then max out the IRA” plan just might not be enough. What’s a super saver to do?

Make the best of it

Okay, so maybe the fund choices aren’t the best. They’ve got high expense ratios, they are “highly managed,” or whatever. At the end of the day, the 401(k) is a tax advantaged retirement account, and the tax advantages are the where these accounts really shine.

For a lot of people, it isn’t the high fees that are keeping them from hitting their retirement goals. It is the lack of adequate retirement savings. At the end of the day, saving more will take you further than saving less. And it’s definitely better than not saving at all, simply because you were “afraid of fees.”

Pitch an alternative

There are a lot of reasons why your employer might have a less-than-stellar retirement plan.

Believe it or not, one reason is that your employer just doesn’t know any better. If you are working in finance or for a large corporate employer, this probably doesn’t apply. But for everyone else, chances are that the person, or people, in charge of setting up your employer’s retirement option probably don’t know much about plans, fund choices, or fees. It’s unlikely that a crappy retirement plan was intentional, in most cases.

If you’re taking the time to read an article like this, you are likely among the more financially tuned-in people at your workplace. You may even know more about retirement plans than your employer does! So, why not take some initiative, muster some courage, and share that knowledge?

If you’re lucky, your employer will see the light and implement some (or all) of your suggestions. They might even switch to a low-cost provider like Vanguard, Fidelity, or Charles Schwab! (Then, you won’t have to read articles about retirement plans that suck.)

At the very least, you will know that you’ve done your best to bring the issues to your employer’s attention. Your company will realize that they’ve got an employee with good financial sense, who is willing to take initiative and solve problems. Wins all around.

Contribute to your spouse’s plan instead

Maybe your employer’s retirement plan is just plain awful. Despite your ever-so-well-thought-out suggestions on ways they could improve the plan, they won’t change it. And you know it won’t get better on its own. Now what?

Cases like this are tough. Sure, if it’s the tax advantages you’re after, you can contribute to an IRA (as mentioned above). On the other hand, you might like the 401(k) for other reasons — such as the creditor protections, higher contribution limits, and easy psychology of saving (they take the money before you get your hands on it, i.e. out of sight out of mind). In that case, an IRA just won’t cut it.

In situations like this, there is often a Plan B. The easiest is that you can contribute to your spouse’s plan instead.

If you’re married and your spouse has a job that offers a retirement plan, you now have access to two different plans with two different sets of funds to choose from. Hopefully, one of the two is decent enough to make contributing worthwhile.

Of course, this plan has drawbacks of its own. For example, if you wanted to contribute more than $18,000 between the two of you, maxing out one spouse’s plan won’t get you there. Also, contributing solely to one spouse’s plan can make for a messy situation in the (hopefully unlikely) event of a divorce.

Also, there is the possibility that both plans are terrible, and you really, really, don’t want to contribute to either one. Now normally, I’d suggest that you consider picking the lesser of two evils. But considering we’re coming down from election season, I’m guessing you’re probably tired of hearing that phrase right about now. So…

Take matters into your own hands and “side hustle” your way to retirement

This is kind of radical, but stay with me here. Most people (who care about retirement savings) know that the annual employee contribution limit for a 401(k) is $18,000. But what you might not know is that the $18,000 limit is per person across all 401(k) accounts.

Yes, that means what you think it means. You can contribute to more than one 401(k) in a given year, as long as you don’t exceed $18,000 of total contributions.

While you might not have two full-time jobs offering 401(k)s, there are ways to open a second 401(k). If you’ve got your own small business or a side hustle, you can likely set up your own employer-sponsored retirement plan, such as a SEP IRA or Solo 401(k).

It used to be that setting up a 401(k) was an insanely expensive undertaking. (Think six figures expensive.) However, this is no longer the case, especially with Solo 401(k)s. Some providers, such as Vanguard, are offering Solo 401(k)s for just $20 per fund, per year!

The specific requirements for setting up and funding Solo 401(k)s are a bit outside the scope of this article. Generally speaking, though, they work pretty similarly to “regular” 401(k)s.

For instance, say you’ve got a lucrative side business making $20,000 per year as a freelance interior designer. Instead of maxing out the stinker of a 401(k) offered by your employer, you could set up a Solo 401(k) and max that out instead!

Remember, in this scenario, you set up the account and you picked the fund choices.  Is this retirement savings nirvana?

For the side hustling rock stars among us, it can get even better. With a Solo 401(k), you can potentially contribute way more than employee contribution limit of  $18,000 because you can make contributions as the employer as well!

Closing thoughts

In a perfect world, we might all have employer-sponsored retirement accounts with an amazing employer match, super low fees, and diverse fund choices. In reality, you might not be so lucky. That doesn’t mean that you have to let a bad employer-sponsored retirement plan hold you back from hitting your retirement savings goals. Make efforts to change the system, if you can. If you can’t? Well, you have a few options laid out here for skipping around and making the smartest retirement savings choices that you can.

Have you been stuck in a subpar retirement plan through your company? What has been your solution?

The post What to Do When Your Employer’s Retirement Plan Sucks appeared first on The Dough Roller.

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Backpacking in the Wild River Wilderness

My Experience With the Vanguard Advisory Services

This review of Vanguard Personal Advisor services is based on my actual experiences.  I migrated my spouse’s portfolio to Vanguard and considered using its advisor service to maintain that portfolio.  The portfolio was held at a large, full service broker and was being charged an annual fee of 1.5% of assets under management.  By comparison, Vanguard charges 0.3% for their service, but it’s a very different service.

What are Vanguard Personal Advisor Services?

For those subscribing to its optional Advisor service, Vanguard provides consistent investment advice per its philosophy of low cost index fund investing.  For the accounts being managed, Vanguard will  automatically reallocate investments when the allocation drifts more than 5% from desired goal percentages.

For customers with assets of $500,000 or more, a dedicated Vanguard account representative is assigned.  For customers with $50,000 to $500,000, a team is assigned — so you might not get the same person each time you call in with a question.   However, all Vanguard advisors are on the same page and dispense the same advice per the low cost index fund investing playbook. To participate with Vanguard Advisors, Vanguard must manage at least $50,000 of your assets.

Vanguard Advisors is a great option for someone who wants to pick up the phone and speak to an advisor about his/her portfolio.  When I first engaged Vanguard, my expertise level with personal finance was limited.  I knew that lower fees were better than higher fees, but I didn’t feel comfortable taking responsibility for my spouse’s retirement portfolio.  I really liked the idea of being able to discuss investment selections with a professional.

What Vanguard Advisors is NOT

Vanguard’s advisor service is certainly different from a traditional big-broker advisor. Of course, those others commonly charge 1% or more for their market-beating expertise.

By contrast, Vanguard doesn’t claim to have unique predictive powers, able to outperform the market year in and year out.   Instead, after a detailed intake process, Vanguard aims to propose an appropriate asset allocation and savings rate that has a high probability of attaining the objectives you have identified.

Unlike a “robo-advisor,” Vanguard features actual humans!  In my experience, the people I dealt with were articulate and extremely helpful.  The Vanguard employees don’t work on commission and I never felt they were pushing solutions for their benefit.  I really sensed a sincere desire to find a solution that best met my needs.

According to Vanguard:

The Vanguard Intake Process and Questionnaire

My first step was calling 877-527-4942 (Monday to Friday

8 a.m. to 8 p.m., Eastern time).  I wanted to confirm that the consult was really free and that I’d actually receive a detailed asset allocation plan, even if I didn’t sign-up.

My first phone call lasted almost an hour as I asked plenty of additional questions about the service. I shared my frustration by how much my spouse was spending each month at the full service broker.  The Vanguard representative was extremely patient and didn’t try to rush me off the phone.

Once satisfied, I was directed to the Vanguard website to complete the intake questionnaire.  If you are not already a Vanguard customer, you’ll have to create a free account first. Then, you can access the questionnaire.

Though the immediate task at hand was transferring my spouse’s portfolio, Vanguard needed detailed information about both of us to formulate a plan.

My spouse’s portfolio was all in retirement assets, but Vanguard wanted to know about my assets and joint household objectives as well. I provided:

• a detailed inventory of all assets (those at Vanguard, the other broker, my workplace 401k, etc.)
• Desired retirement ages for both of us
• Current income and savings rates
• Any non-retirement savings objectives

Then, an appointment was scheduled with a Vanguard Advisor for a telephone conference call. On that call, we planned to review the questionnaire and discuss our objectives.

That call also lasted 45 minutes, as I’m very chatty.  Vanguard then needs a few weeks to develop the plan.  We scheduled the next conference call for 3 weeks to review the proposed plan.

We Didn’t Want to Wait…

Once I showed my spouse the cost involved with the 1.5% advisory fee, he was likewise anxious to leave the old broker and move the portfolio to Vanguard.  Since it was going to take 3 weeks for Vanguard to prepare its plan, we decided to work with the Vanguard Asset Transfer Team. That way, we could initiate the transfer immediately. His funds would then be at Vanguard and ready for investment, per the plan.

Asset Transfer Team

The asset transfer representative was equally articulate and helpful.

We basically had two choices:

1. Sell the 81 investments that comprised the portfolio at the old broker and then transfer the cash to Vanguard.  During the transfer period, we would be in cash for 5 to 7 business days.  It would have taken longer if the ‘from’ broker didn’t accept electronic requests.  Because the 1.5% fee at the old broker covered all transaction fees, there would be no cost to liquidate the portfolio there.  If the market went up during that period, we would miss out on all the gains.  Of course, if the market went down, being all in cash would protect us.
2. The other choice was to transfer these 81 items as-is to Vanguard.  Under this option, we wouldn’t be out of the market at all, but if Vanguard wanted us to sell everything, we’d pay Vanguard  per-item to sell.  Depending on how much money you have at Vanguard, trades could be free or $7, and some ETF’s could be $35 per stock trade.  You can determine the trade cost in advance with the ticker symbol on Vanguard’s website.

Related: 5 Advantages of ETFs over Mutual Funds

Spoiler Alert

Nearly every item in the existing portfolio had a very high expense ratio and was incompatible with the Vanguard low cost philosophy.  Therefore, Vanguard ultimately proposed that we sell everything and invest in the low cost allocation of index funds.   In retrospect, I wish we sold everything at the old broker and ported over the cash.  We ended up paying about $550 in fees to liquidate the portfolio, once we transferred to Vanguard.

Being Online Helps

The conference with the Vanguard Advisor can be done by telephone or by video conference.  I recommend the video conference because the vanguard advisor can display helpful slides to illustrate various points.  My favorite slide — which convinced my spouse to sell his beloved (and expensive) water sector fund — depicted the top 10 performing sectors over time.

During the asset transfer, you will be directed to the Vanguard website to complete various tasks. This is where you will be opening accounts, agreeing to terms, etc.

Wow! What a Nice Investment Plan!

Our customized Vanguard Investment Plan was 33 pages and contained an amazing level of detail:

It contained:

• Detailed summary of our current asset allocation across all accounts (both our Vanguard accounts and my workplace 401k)
• Proposed asset allocation (e.g. 80% stock, 20% bonds)
• Specific buy/sell recommendations
• Retirement goal summary (goal retirement dollars and date for each of us)
• Proposed savings strategy (required savings rate/month)

• Planning horizon (ours:  ‘til age 100)
• Filing status (married filing jointly)
• Marginal tax rate
• Priority of goals
• Income (employment income until age ~67)
• Social security and pension (starting at age ~67)

An Actionable Plan

The list of buy/sell recommendation was basically a roadmap of how to transform the existing chaos into a coherent portfolio with an appropriate asset allocation:

Probability of Attaining Retirement Objective and Asset Mix

Based on the proposed savings rate and allocation, the estimated portfolio balance at retirement was expressed as a series of probabilities (much life snowfall total predictions on the weather channel).

The report had a significant educational component.  It included a spectrum of rates of returns based on asset allocations:

Re-Allocation Over Time

Though Vanguard Advisors intends to speak with its clients every year, to review progress and adjust for any life changes, the plan depicts changing allocation percentages over time. These include reducing stock exposure over time as you approach the retirement years.

So, Why Didn’t I Sign Up?

During the period that I was interacting with Vanguard Advisors, I did a deep dive into the world of personal finance.  I binge-listened to 200+ episodes of the Dough Roller podcast and read  “The Bogleheads’ Guide to Investing”.  After doing that, I felt completely comfortable with Vanguard philosophy, the concepts of asset allocation, and rebalancing our portfolios.  I didn’t think I needed to pay Vanguard to rebalance my accounts on an ongoing basis.

I briefly considered perhaps letting Vanguard Advisors manage $50,000 so I’d be able to pick up the phone and ask them questions.  That seemed like a bargain: $50,000 * 0.3% = $150 / year.  However, during this same period, I became active in the Bogleheads Forum (http://ift.tt/1zP55wP).  I was amazed by the quantity and quality of the answers to the questions I posted there, all from like-minded buy & hold index fund investors.

Because I was so grateful to the advisor assigned to our case, I really wanted him to get credit for the “sign-up”.  However, once I built an Excel model for both our portfolios, trying to carve out $50,000 to be separately managed seemed like a messy complication.   Instead, I wrote a really nice thank you note and made him promise he’d show it to his boss.

I remain eternally grateful to the Dough Roller podcast, especially this episode which convinced me to contact Vanguard Advisors:  http://ift.tt/22m8tLk .

Though I ended up nerding out on personal finance and acquiring the skills necessary to rebalance our accounts, I remain fully impressed and confident that Vanguard would have done a great job.  I did tell my spouse that if I get hit by a truck, he should have Vanguard Advisors manage both portfolios.

The post My Experience With the Vanguard Advisory Services appeared first on The Dough Roller.

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The Kovea Hydra Dual Fuel Backpacking Stove: A Hikin’ Jim Review

5 Winter-Proofing Tips for Your Windows

The winter chill need not be a reason for an astronomical increase in your heating bill. Let your windows help insulate your home with the following tips:

Image Source: Flickr

Honeycomb Cellular Shades
Honeycomb cellular shades help to keep cold air and drafts out, not just from the window, but from around the window frame too.  It’s important to lower them at night when the temperatures are colder, and then open them during the day to use the energy of the sun to warm up the house. Source: GreenOptimistic

Weather Stripping
Use weather stripping to cover any gaps or spaces in parts of the windows that are moveable. First, clean the window parts thoroughly where stripping will be applied; then cut the weather stripping to size, peel the covering off the sticky side and apply where needed with enough pressure to ensure a good seal. Source: Overstock

Layered Window Treatments
To dress your windows really warmly, bundle them up in insulating shades (or cellular shades) with curtains hung on top. This elegant look makes any room feel more finished and will keep your house warmer. Source: Houzz

Storm Windows and Doors
If you have older windows and doors, adding storm windows and doors can help considerably. Window insulation film is another option to provide a layer of protection. “It really insulates the window,” Sassano says. Source: Money.USNews

Use Dark, Thick Curtains at Night
Another good way to winter proof your apartment is to use dark, thick curtains over your windows at night. During the day, if it’s sunny, you can draw your blinds back (so long as your windows are covered with film) and you may be able to receive some heating benefit from the sun. However, remember that nighttime is longer in the winter and that there may be cloudy days. When it’s not sunny out, you should cover the windows with dark, thick curtains, which can help trap heat. Source: Ohmyapt.ApartmentRatings

For more energy-efficient window treatment options, contact us!

 

Contact:
Universal Blinds
601 – 1550 W. 10th Ave
Vancouver, V6J 1Z9
Canada
Phone: (604) 559-1988

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5 Tips to Keep your Bathroom Warm This Winter

Content originally published and Shared from http://perfectbath.com

It’s easy to bundle up to keep yourself warm when it’s winter cold. But when it’s time to step into the bathroom, just the thought of it already gives you chills. Here are 5 things to do so you can make your bathroom experience warm and cozy despite the cold weather:

Image Source: Flickr

Efficiency Check
If your bathroom feels chillier than the rest of the house, the windows may be the culprit. Perform a quick test to see if your windows are letting in drafts by holding up a piece of tissue around the perimeter—if it moves, you have an air leak. Caulk around the window to prevent future air flow. Source: BobVila

Consider a Home Sauna
Historically much more common in countries like Sweden, saunas are becoming more popular in the States. Source: Houzz

Buy a Rug
Make sure it’s a rug made specifically for bathrooms, but not a plastic bathmat. Try to get a soft one, so it’s comfortable to walk on. Make sure it’s absorbent. Source: WikiHow

Install a Steam Shower
When your muscles ache or you’ve just braved a day filled with snow and slush, wouldn’t you love to treat yourself to an herb-scented steam bath? It’s possible to bring this health club experience home by transforming an ordinary shower stall into a rejuvenating steam shower. You can buy a steam-generating system for about $2,500, plus the cost of re-tiling and installing a steam-proof shower enclosure. There’s plumbing and electrical work involved, so you’ll need to hire pros for this job. Once installed, you’ll find your steam shower to be a relatively frugal energy consumer: A 20-minute steam bath requires about 2 gallons of water — a fraction of the 50 gallons used by a water-saving showerhead in the same time frame. Source: Bathrooms.About

Warm up your Towels
Heated towel racks are a quick and easy solution to warm things up. Just imagine stepping out of the shower to a nice warm towel. You can either install the rails, or have a freestanding rack, making this approach the simplest and most practical step towards a warmer bathroom. Source: Lifestyle

Contact:
Perfect Bath
Phone: Toll Free 1-866-843-1641
Calgary, Alberta
Email: info@perfectbath.com

The post 5 Tips to Keep your Bathroom Warm This Winter appeared first on Perfect Bath Canada.

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27 Ways to Make the Most of Your Holiday Bonus

Are you expecting a year-end bonus this year? Or maybe you know Grandma always gives cash for Christmas? Either way, you’ve got better things to do with that extra money than just blowing it all.

Any time you get extra cash, it’s important to think about how it could help you get closer to your financial goals. This doesn’t necessarily mean you can’t enjoy some of that unexpected cash windfall. But you should at least think about how part of the bonus money could further your financial future.

Need some ideas? Here are some financial goals you might be working towards, and how you can use that cash bonus to get even closer:

Getting out of debt

If your goal is getting out of debt, you’ve got some obvious options for using that holiday bonus, including:

• Pay down your smallest debt. If your holiday bonus is big enough to cover one or two of your smaller debts, paying them off entirely can feel great. This option can give you good motivation to keep moving forward with clearing out all of your debt. Plus, it can get rid of a couple of monthly payments, which frees up more cash that you can then put towards larger balances.

• Pay down your highest-interest debt. Want to really make an impact on your ability to pay off debt? Pay down your highest-interest debt first in a debt avalanche. Even if you can’t pay off the full debt, paying down the debt with the highest interest rate will ultimately save you more money over the long run. Keep hammering away at that balance in the new year and make some serious headway.

Boosting your credit score

Even if you’re not in loads of debt, you may have a lower credit score than you’d like. If you want to boost your credit score, take one of these steps:

• Pay down credit card balances. Since your debt-to-credit ratio is one of the biggest pieces of your credit score, paying down credit card balances is a quick way to boost your score. For the biggest boost, pay down the credit card that’s closest to its credit limit.

• Pay bills ahead of time. Paying bills “on time, every time” is absolutely essential to having a great credit score. If you struggle in this area, consider using your bonus to pay a couple of bills ahead. Continue making payments on time after this point, but try to stay a month ahead. If you run into a tight month or run late on paying bills, you won’t get hit with a late fee or a credit score ding.

• Get on a month-ahead budget. One popular method of budgeting from You Need a Budget entails having a full month’s worth of expenses in your checking account. Basically, you’re always living on the last month’s income. Even if your holiday bonus doesn’t equal a full month’s pay, you can use it to start this smart method of budgeting. The month-ahead budget makes it nearly impossible to miss a bill, so your credit score stays high.

Increasing your savings

Looking to boost your savings rate or tuck money away for some specific goal? Try one of these options:

• Save for something specific. Have something in mind that you’re actively saving for? Your holiday bonus or Christmas cash can be a big boost to this fund. Whether you’re saving for a house, a new car, or a vacation, putting your bonus towards something big is always a good option.
• Put money into your emergency fund. If you’re actively working to get out of debt, you’ll still want a thousand dollars or more in a savings account. If you’re debt-free, or close to it, you’ll want to aim for having three to six months’ worth of expenses in a savings account. Just in case the worst happens. Put your cash towards starting or building up this fund, and you can’t go wrong.

• Start a new, generic savings account. If you’ve not been great at saving in the past, consider just starting a new, free savings account that you can continue contributing to throughout the next year. Sometimes having a bit already saved can be motivation enough to sock away even more money.

Saving for retirement

If your main financial focus is investing for retirement, try one of these options with your bonus:

• Start an IRA. Are you already contributing heavily to your company’s 401(k) plan? Use your holiday bonus to start a traditional or Roth IRA, depending on your financial situation.

• Contribute to your Health Savings Account. If you’re already maxing out on retirement savings, consider adding to a Health Savings Account (if you’re eligible). Since this money can also grow tax-free indefinitely, it can serve as a bonus retirement savings. This is especially useful if you’re within a few years of retirement.

• Try a taxable investment account. Want to try your hand at making investment decisions when you have more choices? Consider opening a taxable investment account using a tool like Betterment. You don’t want to put too much money into a taxable account until you’re maxing out your tax-advantages options. But a bonus can be a good start to this type of investment.

Furthering your career

Got some serious career goals for 2017? You could use your holiday bonus to move toward them.

• Remodel your home office. Do you work from home or often bring work home for evenings and weekends? Having an appropriate space for working can help you be more productive. Consider using your bonus for a home office remodel. Don’t go overboard, but focus on basics like technology you need (a scanner, printer, etc.) and a comfortable, ergonomic, quiet work space.

• Take a course. Boosting your skills and knowledge is always a great way to further your career. Try using your bonus to take a college course or an online class designed to enhance your current skillset or add completely new skills to your repertoire.

• Pay for a conference, membership, or subscription. Networking is always a great way to further your career, and you can do that at conferences and conventions. Check out some great ones in your area. Or pay for a subscription to a professional league or a membership to your local Chamber of Commerce. These are all great ways to meet new people who can help you in your career or be valuable contacts in the future.

• Upgrade your work wardrobe. If you’re really looking to move up in your career, you may need to look more professional to do so. Splurge on a new suit or an uber-professional capsule wardrobe that will really wow the boss, colleagues, and clients when you get back to work after the holidays.

Securing your family

Maybe there are a few things you’ve been putting off, but that need to be done for the future security of your family. Consider these options for your holiday cash:

• Pay a lawyer to draw up a will. If you don’t already have a will, that’s a must-have. Get with a local lawyer to draw one up, especially if you have children who would need to be cared for if something happened to you. It’s never fun to think about dying, but creating your will is absolutely a must-do.

• Get liability insurance. An umbrella liability insurance policy can cover gaps left by your homeowner’s and/or car insurance. These policies aren’t necessary for everyone, but can offer great protection for people who need them. Consider putting a big payment towards liability insurance premiums with your cash bonus.

• Buy a term life insurance policy. Term life insurance is the smartest option for most consumers, especially younger people who will likely only need insurance for a couple of decades. Do your research on the type of policy that will work best for your particular needs, and then pay a year’s premiums in advance with your bonus.

• Increase the value of your home. If you’re like many homeowners, your home is your biggest asset. You can get some personal satisfaction and make a smart financial choice by boosting your home’s value. Kitchen and bathroom remodels typically give the best bang for your buck, but you’ll first want to tackle any outstanding maintenance issues that could cause your home’s value to tank if not fixed.

Starting some New Year’s Resolutions

Maybe it’s worthwhile for you to spend that money meeting goals in other areas of your life, such as fitness or intellectual development. If you’ve got some non-financial New Year’s Resolutions this year, don’t be afraid to advance them with your bonus. Need some ideas?

• Buy a gym membership or home gym equipment. Want to get in better shape this year? Use your bonus to prepay for a gym membership. You’re more likely to go if you’ve already paid for it! Or buy some basic equipment to set up your own gym at home, making getting in shape even more convenient.

• Purchase an e-reader and several books on your to-read list. If you’d prefer to strengthen your mind this year, consider buying a slim e-reader like the Nook or Amazon Kindle. Not everyone loves them, but they’re a great option to keep in your purse or briefcase for those brief moments you get to read throughout the day. If you go this route, buy a few books you’ve been wanting to read so you’re never lacking for materials.

• Get a subscription to a magazine or newspaper that interests you. Again, you can boost your personal intellectual development with some solid reading. Consider using part of your bonus for an interesting magazine or newspaper. If nothing else, this will help you be more interesting at cocktail parties this year.

Boosting your motivation

Sometimes it’s okay to just splurge. In fact, if you’ve used your income wisely all year — living frugally and paying off debt or investing — now might be the best time to splurge. This can, after all, boost your motivation to keep making great financial choices through 2017. Here are some splurge ideas:

• Develop a new hobby. Having hobbies is a great way to decrease your stress level and keep you interested in life when work gets boring and financial progress seems slow. Use your bonus to buy supplies for a new hobby, or find a local class you can take to develop a new skill to hone throughout the coming year.

• Redecorate your home. If you’re bored with your old bedspread and curtains, take some of your bonus to redecorate. New paint and linens aren’t all that expensive, and can be a great way to start the year with a fresh outlook.

• Go out on the town. For smaller bonuses, or if you just want to use part of it, take your spouse or family out for a nice dinner. To really make the most of it, splurge on a restaurant you wouldn’t normally pick. Try something new, and make it a memorable experience.

• Take a vacation. One of the best ways to boost your overall happiness is through experiences rather than “stuff.” Whether you have a $1,000 bonus or a $10,000 bonus, consider spending some of it on a vacation. Plan a summertime, weeklong cruise, or take a weekend-long staycation to get to know your hometown.

• Relax. Maybe that bonus came only after a very stressful work year. If you’re all tied up in knots, use some of that money to do what relaxes you most, whether that’s a day at the spa or a night out with friends. Decreasing your stress level will only serve to make you more focused and productive after the holiday season.

Decide what’s best for you and your family, and enjoy whatever you decide to do with the money!

Will you be getting a bonus this year? How do you plan to utilize it?

The post 27 Ways to Make the Most of Your Holiday Bonus appeared first on The Dough Roller.

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