PayPal revolutionized the online payments world for both sending and receiving payments. However, a downside to using PayPal is having to pay fees. Even though some fees are small if you pay a lot of them, they can add up to a large amount! So, let’s explore how to avoid PayPal fees in this quick guide.
What Is PayPal?
First, here is a quick recap to explain exactly what PayPal is. PayPal is an online payment system that allows online money transfers and works as an electronic alternative to other methods like checks or money orders.
Millions of people and businesses use PayPal to process their payments. It’s a much easier and more streamlined online payment method as opposed to using credit cards. However, PayPal is not always free to use.
In the United States businesses accepting payment via PayPal are charged a percentage of the sale plus a fixed fee. The fixed fee is 30 cents, and the percentage rate is currently 2.9%.
For example, you invoice a client for $100. The client chooses to pay via PayPal. You will receive $96.80. The fixed fee of 30 cents is deducted plus the 2.9% PayPal fee which works out at $2.90.
How To Avoid PayPal Fees
Avoiding PayPal fees means you can keep more of your hard-earned money for yourself. This section will explain several methods of avoiding or reducing PayPal fees.
1. Ask For Payments Less Often
Getting paid every week is great as it means you have money every week! The downside is that every time you get paid, PayPal is charging you a fee. Remember it’s a 30-cent fee + 2.9% for every amount received from a U.S client. If your client is outside of the U.S, the fixed fee varies, and the percentage charged goes up to 4.4%!
That means for every 100 U.S based clients you are charged $30! If you have clients outside the US, you could be paying even more!
A way to reduce these fees is to ask for payment once a month. Doing this means you only pay the fees once instead of multiple times. What’s better $30 a month or $30 a week? Easy right. Provided you can manage being paid monthly, then it’s a no-brainer!
For example, you are earning $1000 a month. Getting paid weekly could mean you only receive $880 a month after fees are deducted. Switching payments to monthly means you get $970! That’s a huge difference!
These figures are to help you visualize the benefit of being paid less often. What you would actually receive will vary based on the number of clients and where the money is coming from (either U.S or outside). However, the concept doesn’t change. You will keep more of your money by receiving it less often.
2. Be Careful How You Withdraw Money From PayPal
When you withdraw your money from PayPal you could be charged a fee depending on how you withdraw it. The good news is that you can withdraw your money fast and for free by one of two methods.
First, withdraw it directly to your bank account. Bank transfers are fast as they are usually in your account by the next business day at the latest. Getting your money this way means you pay no fees for withdrawal.
The other way to get your money is by getting a PayPal cash card. This works like a debit card at all retailers accepting Mastercard. There is no fee to use the card and you can withdraw cash from an ATM. A PayPal cash card is a free way to get your money quickly and easily.
3. Ask To Be Paid As A Friend Or Family
As you now know any money you are paid from a client will incur a fixed fee plus a percentage of the amount. These charges only apply to money received for goods or services.
If a client chooses to pay you using the friends and family option, then no fees are charged to either party. The client will also avoid PayPal fees, provided payment is made from their PayPal balance, bank account, or a combination.
Personally, this method has worked well for me in the past. When I’ve arranged small design jobs via a member of my blogging Facebook group, we’ve agreed the payment to be handled via the friends or family option to save paying any fees.
To make a payment using the friends or family option you simply need to invoice your client directly using an accounting program or manual spreadsheet. The client can then pay you directly via PayPal. Alternatively, send the invoice via PayPal and ask the client not to pay from the invoice. Instead, they can pay using the friends or family option in their PayPal account.
Please note that there are a couple of potential risks to using the friends and family option. First, there is no payment protection for the person paying the money. If you know each other well this should be fine.
The other risk is that PayPal may close your account if they believe you are exploiting the system. When I’ve used friends and family in the past for design jobs, I’ve only used it with smaller jobs and people I know well. Doing this may be recommended to save paying fees but there is a risk involved.
4. Add PayPal Fees Into Your Quote
Adding PayPal fees into your quote doesn’t reduce the fees, but it does mean you aren’t paying them. For example, you are charging a client $100 for a blog post. You would normally receive $96.80 if they are a U.S based client. However, you could tell them the blog post will cost $105.00 which means you still get $100 after PayPal fees are deducted.
Alternatively, ask your client upfront if they are happy to pay the fees. Make sure this is part of the contract when you are agreeing to the job. When creating the invoice simply add a 3-4% fee to cover any PayPal fees. Remember, make sure the client agrees with this first!
5. Offer Alternative Payment Methods
The simplest way to avoid PayPal fees is by not using PayPal!
Direct deposit is an option offered by lots of companies. The money is usually paid just as fast and there are no fees to pay!
If you don’t want to use direct deposit, then you could use the traditional method of asking for a paper check. This will take longer to get your money but there are no PayPal fees to pay.
A final option to consider is using an invoicing software with inbuilt bank transfers. This means the client can receive the invoice and follow the link to easily make payment. The best thing about this is that you don’t incur any fees!
6. Try PayPal Alternatives
PayPal is not the only online payment system. You could try out one of the many alternatives to receive payments to avoid PayPal fees. This means you won’t pay any PayPal fees! Other fees may apply though so make sure you thoroughly check this out before using other systems.
7. List PayPal Fees As A Tax Deduction
In case you don’t know, PayPal fees can be deducted from your tax return. Doing this means you still have to pay the fees during the year, but your tax bill will be lower! You are simply keeping more of your money another way.
All you need to do is add up all the PayPal fees you have paid through the year. Once you have the total simply include the amount on your Schedule C.
How Much Are The PayPal Fees?
To make money PayPal charges a fee of 2.9% from the total amount of every payment received from the U.S. On top of that, there is also a $0.30 fixed fee for every transaction.
If the funds that are received are from outside the US, the transaction fee goes up to 4.4% of the total amount and the fixed fee varies. The amount of the fixed fee will depend on what country the money is from.
The person that is receiving the money is the one that has to pay any fees. This works in a similar way to paying with a card when you go to the store. The store pays the card issuer a fee for the option of accepting payments by card.
Final Thoughts
PayPal fees can be frustrating as no one likes to see their money go to someone else! However, without fees, PayPal might have to make their money by charging you to have an account.
The good news is that you can reduce the amount of PayPal fees you are paying. Ask to be paid less frequently, build fees into your quote, or ask for payment using the friends and family option. Using these methods can vastly reduce how much you pay in fees every year.
Don’t forget you can avoid fees completely by using alternatives. Direct deposit, paper check, or accepting payment using another online payment system could all be cheaper!
Hey, I’m Chris. I have a degree in Business Economics from the University of Liverpool, own a small fast food business and runLifeUpswing.com. I help people make money, save money, and think about money in a way that will give you back your freedom.
Manipulating money is a common problem in every economic system. Whether with fake gold, counterfeit dollar notes, replica coins, or double-spending of digital currency, bad actors seek to exploit or emulate existing currencies for personal financial gain.
As new forms of technology and money become publicly available, bad actors are often some of the earliest adopters because the asset is largely untested or unregulated and thus more easily manipulated. Bitcoin is no exception.
Bitcoin’s completely digital currency network is decentralized—it has no central authority, regulators, or governing bodies to police thieves and hackers. Though traditional security entities don’t monitor the Bitcoin network for double-spending, other network defenses have been implemented to combat attacks that would otherwise threaten the network’s consensus mechanism and ledger of transactions, providing confidence to those who invest in Bitcoin.
What is the Double-spending Problem?
The double-spending problem is a phenomenon in which a single unit of currency is spent simultaneously more than once. This creates a disparity between the spending record and the amount of that currency available.
Imagine, for example, if someone walks into a clothing store with only $10 and buys a $10 shirt, then buys another $10 shirt with the same $10 already paid to the cashier. While this is difficult to do with a physical money—in part because recent transactions and current owners can be easily verified in real-time—there’s more opportunity to do it with digital currency.
Double spending is most commonly associated with Bitcoin because digital information can be manipulated or reproduced more easily by skilled programmers familiar with how the blockchain protocol works. Bitcoin is also a target for thieves to double-spend because Bitcoin is a peer-to-peer medium of exchange that doesn’t pass through any intermediaries or institutions.
How Does Double-spending Bitcoin Work?
Fundamentally, a Bitcoin double spend consists of a bad actor sending a copy of one transaction to make the copy appear legitimate while retaining the original, or erasing the first transaction altogether. This is possible—and dangerous—for Bitcoin or any digital currency because digital information is more easily duplicated. There are a few different ways criminals attempt to double-spend Bitcoin.
Simultaneously Sending the Same Bitcoin Amount Twice (or More)
In this situation, an attacker will simultaneously send the same bitcoin to two (or more) different addresses. This type of attack attempts to exploit the Bitcoin network’s slow 10-minute block time, in which transactions are sent to the network and queued to be confirmed and verified by miners to be added to the blockchain. In sneaking an extra transaction onto the blockchain, thieves can give the illusion that the original bitcoin amount hasn’t been spent already, or manipulate the existing blockchain and laboriously re-mine blocks with fake transaction histories to support the desired future double spend.
Reverse an already-sent transaction
Another way to attempt a Bitcoin double-spend is by reversing a transaction after receiving the counterparty’s assets or services, thus keeping both the received goods and the sent bitcoin. The attacker sends multiple packets (units of data) to the network to reverse the transactions, to give the illusion they never happened.
Blockchain Concerns with Double Spending
Some methods employed by hackers to circumvent the Bitcoin verification process consist of out-computing the blockchain security mechanism or double-spending by sending a fake transaction log to a seller and a different log to the network.
Perhaps the greatest risk for double-spending Bitcoin is a 51% attack, a network disruption where a user (or users) controls more than 50% of the computing power that maintains the blockchain’s distributed ledger of transactions. If a bad actor gains majority control of the blockchain, they can modify the network’s ledger to transfer bitcoin to their digital wallet multiple times as if the original transactions had not yet previously occurred.
Another concern is the potential double-spending problem on decentralized exchanges as crypto continues to migrate to decentralized exchanges (DEX) and platforms. With no central authority or intermediary, the growth and adoption of DEXs will depend on their security and proven ability to prevent double-spending.
Despite a variety of attempts to successfully double-spend Bitcoin, the majority of bitcoin thefts have not been the result of double-counting or double-spend attacks but rather users not properly securing their bitcoin.
How Does Bitcoin prevent Double Spending?
Bitcoin’s network prevents double-spending by combining complementary security features of the blockchain network and its decentralized network of miners to verify transactions before they are added to the blockchain. Here’s an example of that security in action:
Person A and Person B go to a store with only one collective BTC to spend. Person A buys a TV costing exactly 1 BTC. Person B buys a motorcycle that also costs exactly one BTC.
Both transactions go into a pool of unconfirmed transactions, but only the first transaction gets confirmations (blocks containing transactions from preceding blocks and new transactions) and is verified by miners in the next block.
The second transaction gets pulled from the network because it didn’t get enough confirmations after the miners determined it was invalid.
Security measure 1: Whichever transaction gets the maximum number of network confirmations (typically a minimum of six) will be included in the blockchain, while others are discarded
Security measure 2: Once confirmations and transactions are put on the blockchain they are time-stamped, rendering them irreversible and impossible to alter
Once a merchant receives the minimum number of block confirmations, they can be sure a transaction was valid and not a double spend.
Bitcoin’s proof-of-work consensus model is inherently resistant to double-spending because of its block time. Proof-of-work requires miners on the network, or validator nodes, to solve complex algorithms that require a significant amount of computing power, or “hash power.” This process makes any attempt to duplicate or falsify the blockchain significantly more difficult to execute because the attacker would have to go back and re-mine every single block with the new fraudulent transaction(s) on it.
This process compounds over time, preserving previous transactions while recording new transactions. Reaching consensus through proof-of-work mining provides the network accountability by verifying Bitcoin ownership in each transaction and preventing double-counting and other subtle forms of fraud.
While it is technically possible for a group of individuals to initiate a 51% attack on the Bitcoin network, combining mining power and disrupting the network for their benefit, it is unlikely and difficult as it would require collusion by a tremendous amount of miners or a single miner with over 50% of the network’s hash power. Successfully executing a 51% attack has only gotten more difficult over time, for a few reasons: the difficulty of mining Bitcoin increases with every Bitcoin halving; mining hardware is prohibitively expensive at that scale, and a massive amount of electricity would be required to power such a massive mining operation.
The Takeaway
Double spending of Bitcoin is a concern since it’s a digital currency with no central authority to verify its spending records. This leaves some to question the network’s security and legitimacy of Bitcoin’s network, validators, and monetary supply. However, the network’s distributed ledger of transactions, the blockchain, autonomously records and verifies each transaction’s authenticity and prevents double counting.
Though the blockchain can’t solely prevent double-spending, it is a line of self-defense before an army of decentralized validator nodes solve complex mathematical problems to confirm and verify new transactions are not double spent before they’re permanently added to the network’s permanent ledger.
Cryptocurrencies like Bitcoin can be volatile investments and prices change quickly due to news flow and other factors. Yet it’s that potential for highly fluctuating price changes that compels some investors—particularly those with a long-term investment horizon—to see out crypto as an investment.
With SoFi Invest® cryptocurrency trading, people of all experience levels can invest in cryptocurrencies like Bitcoin within a traditional investing platform, safely maintaining crypto alongside an investor’s stocks, bonds, and other assets.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA, the SEC, and the CFPB, have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds, or traditional investments. Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners. SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC. SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC-registered broker-dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
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You could read countless articles and read hundreds of books that will tell you how to choose investments and allocate your investment portfolio. For every argument for a certain kind of investment, there is one against it. You need to know that only you can determine what is best for you and equip yourself with impartial knowledge from trusted sources. Ask friends, read online forums, and take these five steps as a foundation for developing your portfolio.
I’ve been in the financial planning industry for over ten years and started investing in the market when I was 19 years old. Not to date myself, but I saw the 2008 crash and the impacts of the following recession. That was an eye-opening experience, if there ever was one. When you’re newly minted in the working world and impressionable at that young age, you look up to people more senior to you for guidance. Everyone I talked to said the economy was crashing, and get your money out while you can. Yet, on the other hand, everything I read said to stay invested, and buying stocks during a downturn is like buying them on sale.
So, I learned to ignore the noise and learned it at the right time. I didn’t have a huge amount in the market, but by learning about diversification, low-cost index funds, dollar-cost averaging, and how time in the market is more important than timing the market, I was able to learn how to create a robust investment portfolio.
Keep in mind the below guidance is for informational purposes only and should not be taken as investment advice. It is not intended to provide specific recommendations for any individual or entity or replace the guidance of a financial planner or tax planner.
1) Know your Objective
When you’re selecting investments for your investment portfolio, you first want to determine what the money’s for. Retirement? Buying a house? Starting a business? Or maybe, you make so much money you need somewhere to throw it (If only, #AmIRight?). This will help you build out what kind of investments you want.
For example, if you’re saving up for a house in the next 3-5 years, maybe you want to look for more secure investments, such as a CD or balanced mutual fund/ETF. If the money is for your newborn’s college, stocks and ETFs are your friends.
2) Know The Timeline for Your Investment Portfolio
This is important because you want to select investments that align with the amount of time you will need to liquidate your investments, as well as to have time to recover from market volatility.
So, for retirement in 30 years, you can invest in instruments that have low liquidity or high volatility in exchange for higher returns (equities). If the money is for a car in a year or two, you probably want to invest cash equivalents or something you can liquidate easily, such as a short-term CD or money market account that won’t fluctuate as much, if at all.
3) Know Your Comfort Level with Risk
This is key because no matter what financial experts say you should invest in, only you know where you feel comfortable putting your hard-earned money. There are several risk-tolerance questionnaires (RTQs) on the web that can help you get started. They’ll ask how you would respond to a certain market event or what you are willing to give up in order to earn higher returns. Stocks, ETFs, mutual funds, bond funds, real estate, cash, and everything in between are potential contenders for your portfolio mix.
You just want to make sure you understand and feel comfortable where you put your money and be able to stick it out through volatility, political turmoil, or anything else that will make you feel as if the world is ending.
4) Know the Fees Associated with what You Buy
When you decide to open a brokerage (trading) account or IRA, you’ll want to figure out what the account minimum is and any fees for trading. Some brokerage companies offer free trades for their proprietary funds and ETFs, and some offer free trades for all stocks and ETFs.
You also want to make sure you understand what fees are involved in the funds you buy for your investment portfolio. Some mutual funds have sales charges or loads, and all have expense ratios for ongoing management of the fund. ETFs are popular for the reason that they trade like stocks (no loads or sales charges) but have the diversification of a mutual fund in that they own many stocks within them. Use a screener to find low expense funds that meet your criteria. You can’t control what returns you will earn on your investments, but you can control the fees, so look for low expense ratio funds, no transaction fee funds, and ask your brokerage company for free trades.
NerdWallet.com has a decent guide on how to select a company to open your investment account:NerdWallet Investing. Both Andrew and Adam of Wallet Squirrel use Robinhood for their investing platform.
5) Decide on Your Investment Portfolio Philosophy and Do Your Research
Are you completely turned off by logging into your account to trade and rebalance, nonetheless, different research investments? You may want to look at a professionally managed investment portfolio or maybe even a Robo Advisor to get started.
If you want to manage your own account, do you want actively managed funds or more inclined toward a passive index funds strategy? Most brokerage companies have research tabs where you can find out fundamentals, past performance, analyst ratings, and more for various stocks and funds.
Do you want to screen out companies that invest in fossil fuels or those that focus on impact investing? This is possible, as well. Morningstar.com can provide a star-rating for the funds, along with globe ratings for sustainability. Along with the custom screening, many brokerage companies offer an approved list of strong performers in each category, such as large-cap value funds or emerging markets funds.
6) Question #1 if you want to hire an advisor for your investment portfolio
How do you come up with the advice you give me? You should know what resources the planner uses to develop financial or investment recommendations.
Do they read financial journals, use online screeners or Morningstar? Or do they just use some online calculator for asset allocation and throw in some generic index funds you could have done yourself?
You want to make sure that if you are paying them, they are adding value to what you are trying to accomplish, such as saving you time or providing their expertise. The other thing is, never invest in something you don’t understand, especially when promised with high returns and low risk. If it sounds too good to be true, it probably is.
7) Question #2: How will I know you have my best interests in mind?
One way to do this without asking the question is by looking up their credentials. If they are a CFP®, they are held to a fiduciary standard as part of their certification, meaning they have your best interests in mind when making recommendations. Check out BrokerCheck on finra.org.
Certifications also display their commitment to the profession and in continuing education, so they know what they are talking about. Ask if they receive any kickbacks for referring you to a banker, CPA, life insurance agent, attorney, etc. Do they look out for load funds, so the money you invest actually goes into the investment and not their pocket?
Search for the professional you are considering on Google. Also, check out Investor.gov for links to vetting the background of the planner, such as years in business and if they have any disciplinary actions on file.
Every new year there is an increase in timeshare owners looking to end their timeshare contract as yearly maintenance bills arrive. In 2021, the pandemic’s economic effects caused even more people to consider selling their vacation ownership.
While 7 out of 8 U.S. timeshares owners are satisfied, one-in-four Americans have trouble paying their bills. In a world of tough choices, a timeshare invoice is probably placed at the bottom of a stack of bills.
As a fellow timeshare owner, I know how complicated it can be to find reliable information on how to get out of a timeshare legally with your credit score in tack. I’m guessing that your social media feed is also filled with advertisements from various timeshare termination teams and timeshare attorneys. During the last recession, we researched how to sell our timeshare contract. We ultimately decided to keep our vacation ownership and are glad we did.
Do you have an unwanted timeshare? Is the maintenance fee a financial burden? Similar to other commitments, you can’t just walk away from a timeshare company. Here are five ways you can “divorce” your timeshare legally that doesn’t include paying thousands of dollars of upfront fees to timeshare exit companies or to a timeshare lawyer. Did you know that ending your timeshare contract is something that you can do on your own?
This is The Way.
How Much Can I Sell My Timeshare For?
Before we dig into how to get out of a timeshare contract, it’s important to address the elephant in the room. How much are timeshares worth? Well, things are only worth what people are willing to pay for them. Unfortunately, the high-pressure sales tactics of some resorts misrepresent the resale market value of your timeshare contract. Warning: the answer may be unsettling and hard to hear.
Unlike vacation homes, timeshares are a depreciating asset and are sold on the secondary market for 75 to 99% less than the resort sales price. Very few have resale value, and a large majority of timeshare contracts will sell for pennies on the dollar to a new owner via a resale company. Unless you own with one of the premium timeshare companies, a deeded timeshare week over the holidays, or in the highest demand locations (e.g., Key West, Hawaii, Yellowstone), you will discover that the competitive resale price for most timeshares will be around $1,000.
How to Get Out of a Timeshare Contract: The Financial Reality
If timeshare resale brokers, real estate agents, or a timeshare exit company are telling you that you’ll make money on your timeshare contract, it’s a huge red flag. Today’s supply and demand dynamics mean it’s currently a buyer’s market in the timeshare world. Any licensed timeshare resale real estate agent worth their salt will tell you the same.
You might lose thousands of dollars, but if you want to be released from your annual financial commitment, taking a loss might be your best option to stop paying timeshare maintenance fees every year. If you’ve been thinking about how to get out of a timeshare contract legally, here are five proven ways to do it yourself.
Option #1: Hurry! Use Your Recession Period
If you just bought and want to know how to get out of a timeshare contract, hopefully, you’re reading this while you’re still on vacation. There is a rescission period cooling off timeframe to cancel timeshare purchases AND get your money back like a mortgage agreement for your house. The length of your rescission period depends on the timeshare law in the state your timeshare is located. You have 3-15 days to contact the resort and file a rescission letter for a timeshare cancellation.
How to Get Out of a Timeshare with a Rescission Letter
To start a timeshare cancellation, you need to notify them in writing within your rescission period. The contents of a recession letter vary by resort, and the details can be found in your timeshare contract. Make sure you read this carefully and include every single item required to cancel your timeshare purchase if you leave something out of the letter that’s technically a timeshare contract loophole that they can use to deny your request.
Timeshare Users Group (TUG), the oldest and largest timeshare owners group and advocacy organization, developed a starter letter for people to cancel an unwanted timeshare. TUG reports that the average person saves $18,000 by completing a timeshare termination this way.
Lastly, double and triple-check that you have delivery confirmation paperwork that proves you’ve sent the purchase cancellation letter by the required date. If you contact the timeshare company, make sure you’re speaking to a member of their financial services or legal team and not a timeshare salesperson. The latter will try and convince you not to cancel your timeshare contract as it affects their bottom line.
Option #2: How to Get Out of a Timeshare via a Deedback Program
If you are outside of the 1-2 week rescission period, and you want to cancel your timeshare contract, your first call should be to your timeshare company. Most large resorts and chains have timeshare exit programs for owners who do not have an outstanding loan on their timeshare. If you are done with mortgage payments, the fastest timeshare exit strategy is through your home resort. It can be as simple as one phone call, and you can give your unwanted timeshare back. That’s right, end your maintenance fee bills with one call! No termination team or exit company is needed!
The best way to find your company is through the American Resort Development Association’s Safe Exit website that guides timeshare owners through the timeshare exit process. Many people reported giving their timeshare back, quickly, for absolutely free! If your resort isn’t listed on the American Resort Development Association’s Safe Exit website, contact the Owner Services representative at your resort to see how to get out of a timeshare with their company.
Remember, no third party can end your financial obligation to your mortgage company as part of a timeshare termination. If you haven’t spoken to your lender about your hardship or that you’d prefer timeshare freedom, now is the time to communicate directly about your situation.
Option #3: Give Your Timeshare Away to Family or Friends
Have you asked a loved one if they’d like to take over your timeshare contract? Has a family member or group of friends timeshare traveled with you and enjoyed it? Perhaps they’d like a gift of future vacations. Have handy all the relevant financial information such as your annual maintenance fees, legal closing costs, and resort transfer fees for the conversation.
If you’re thinking about how to get out of a timeshare by giving it away, a little bit of marketing goes a long way! Illustrate for them that your timeshare annual fees are cheaper than booking the same vacation directly from the resort or hotel discount sites. Take screenshots of your ownership week on the hotel’s reservation page and hotel booking sites. A picture’s worth a thousand words when explaining how this saves them money on future trips.
To sweeten your timeshare donation offer, pass along advice on how they can hack timeshare ownership to see the world at a fraction of the price!
Option #4: Transfer Your Timeshare Contract to Another Owner at Your Resort
People get rid of their timeshare legally by transferring their timeshare contract to an existing owner at their home resort. Some people are looking to buy timeshare weeks for additional vacations or bring family and friends along on their annual trip. There is no reason to hire a timeshare exit team when you can sell a timeshare you no longer want directly to another owner! How to get out of a timeshare this way if you don’t know any other owners?
Don’t worry. Finding them is easy! Locate your resort’s Facebook owner’s group using “Name of Your Resort Owners” as the search term. Once you’ve found and joined your vacation club group, create a Facebook post to advertise the timeshare ownership that you no longer want. Include your specific week, size of your unit/number of points, annual maintenance fees, and the total closing costs. I’ve seen first hand many of these postings and the quick response they’ve garnered from interest owners. If you no longer want your ownership, this is a quick and super cheap way to sell your timeshare without a real estate agent.
Option #5: List Your Timeshare Contract on the Resale Market Competitively
Did you know there is a flourishing resale market for timeshares? If you’re motivated to transfer your timeshare contract, make sure that you list yours for a competitive price. Research multiple timeshare resale sites to locate comparable units and their final sales price. You don’t need a high priced law firm. You need an interested buyer and a timeshare closing company, and you’ve got your timeshare freedom.
How To Get Out of a Timeshare Legally by Selling It
There are trusted websites brimming with people looking to buy a timeshare contract resale. Like flat fee listing services for real estate, these websites will get your timeshare in front of tons of people. Your options, and corresponding costs, vary from DIY forums up to full-service management. If you feel unsure about selling your timeshare online, you can always research the company with The Better Business Bureau.
When picking a resale website for your listing, focus on reputable ones with the most eyeballs. Neither of the below options to sell your unwanted timeshare legally comes with a high upfront fee. In fact, DIY options start at $15, and full-service options are around $500.
Timeshare Users Group (TUG) is the oldest and largest timeshare owners group and advocacy organization. They’ve been helping people make the most of their ownership for over 25 years. They are also one of the largest and most visited timeshares classified ad sites on the internet, with $30 million in completed timeshare sales. If you want to read more about getting out of a timeshare, their online forums are great resources.
RedWeek.com is the largest online marketplace for timeshare sales and rentals, with an audience of 2+ million. They offer three listing and sales management options, from DIY all the way to full service. Reach out to them via email for a free consultation on their services.
How to Get Out of a Timeshare Without Being Scammed
Lastly, be prepared once your listing is live for all sorts of timeshare cancellation proposals. There has been a reported uptick in timeshare resale scams during the pandemic taking advantage of people who don’t know how to get out of a timeshare. You’ll most likely get cold calls from timeshare cancellation attorneys with offers that are too good to be true or timeshare exits teams offering to help for a large upfront fee.
So, keep your wallet closed, trust your gut, and ask for everything in writing. This is The Way.
This article originally appeared on Your Money Geek and has been republished with permission.
Asking yourself how much rent you can afford is the first step when you plan to find a new home. Answering this question can be the starting point to deciding where you want to live and what kind of place you want to rent.
When looking for apartments, one of the first things you ask yourself is how much rent can I afford? You want to know what percentage of your salary you can spend on rent, and how much money that is.
The process of looking for an apartment can make you feel overwhelmed. There are just so many things to take into account. You need to determine which neighborhood you want to live in, determine if you want to house hack, look at decent apartments, take the time to visit the apartments, apply for them, and finally hear if you are accepted.
It can only take a couple of days before an apartment listed online is rented in popular areas. You want to know how much rent you can afford so that you can visit the right apartments for you and your budget. It will save you time, money, and a lot of hassle.
What Percentage of My Income Should Go to Rent?
When you are thinking about how much rent can I afford, it is simplest to determine what percentage of your monthly net income you should spend on rent. What percentage is ideal for you depends on your financial situation, like your income and perfect living environment.
There are rules of thumb that you can follow to determine how much you should spend on rent. Keep in mind that these are rules of thumb. They don’t work for everyone, and they are suggestions. Think about your ideal situation and what fits your specific needs.
Spend 20% On Rent
If you spend 20% of your income on rent, you have more money left for other things. You could decide to spend more money on non-essentials, invest more for retirement, or surprise your loved ones with a gift.
When you spend 20% of your salary on rent, and you’re earning an average income, you may need to make some concessions. You could look for someone to share the apartment with, especially if you live in a more high cost of living area. If you don’t mind living in a smaller or older apartment, or further away from the city center, this could be another thing to look at.
It is essential to spend money where you value it. If you don’t value a big apartment and don’t mind sharing an apartment to save money on rent, don’t spend most of your money on rent. Just be sure that your standard of living is still up to par, and you’re not settling for a terrible living situation just because you want to save money.
Spend 30% On Rent
Spending 30% of your salary on rent is what most people are going for. You have enough money left to buy other essentials while living in a decent apartment. It is the sweet spot between an affordable apartment and an apartment where you feel at home and comfortable.
When you’re someone who earns a median salary, spending 30% of your income on rent will get you something you are comfortable with and want to live in. Besides paying rent, you can also save for the future and do fun things.
For example, if you have an annual income of $40,000, your maximum monthly rent is $1,000. If you make $60,000, your maximum monthly rent is $1,500 when you spend 30% of your income on rent.
Spend 40% On Rent
Spending 40% of your salary on rent mostly occurs when you don’t set a budget for yourself, and you see a home that you like. The house is perfect for you and a little expensive, but you really want to live there.
While it is okay to spend 40% of your income on rent, make sure you have thought about it. You want to make it a conscious decision. You want to prevent that two months into living there you notice that you don’t have enough money left to keep up with your standard of living.
When you aim to spend 40% of your salary on rent, you will know how much you will spend on other items. It may be wise to start a budget and track your discretionary spending, as you want to make sure you can set aside your rent every month. If you want to spend 40% of your paycheck on rent, you can either check out one of these things to do with no money or earn free gift cards so you can still treat yourself.
Take Into Account Your Local Housing Market
The rental market varies widely from place to place. Where you live makes a big difference in how much rent you pay. If you want to live in popular cities like New York, San Fransisco, or Los Angeles, rent is higher than in other cities or states.
Looking around online and see what rent people ask for in your neighborhood can give you a more realistic image. Before you go apartment hunting, you want to know if your budget can give your enough space and meets your other requirements. Checking a local rent affordability calculator can help with that.
It can be frustrating to want to spend 30% of your income on rent, while the average rents in the area you want to live in can’t accommodate that. Do your research and prevent disappointment.
Additional Costs To Consider
When you have determined how much of your income should go to rent, the challenge can be to factor in additional costs and other expenses. We will discuss a couple of the most important things to take into account here.
Be Realistic About Your Lifestyle
Don’t expect to change your spending habits or your lifestyle to afford rent. It may be tempting to say that you’re going to eat out less and cancel your gym membership so that you can afford a higher rent. This is probably not such a good idea and something you may regret later. Ideally, you want to be able to afford your home with your current spending habits.
You can also try to make extra money and add supplemental income by starting a side hustle. You could start by flipping things for profit, doing remote work, or testing websites. Be aware that this is something that will take up time and effort. Plus, you have to ask yourself whether it is worth it to afford your desired rent.
Consider Additional Savings Or Costs
When you are going to move, your situation will change. You will live further from your work, costing you additional gas money. You need to pay for parking in your new space, adding extra costs. Your apartment could have an on-site gym, saving you $60 per month on a gym membership. Your unit has its own laundry, where you save both time and money.
These a couple of examples of how moving places can add monthly expenses or how moving can save you money each month. If the changes are significant, it would be a good idea to include that in your calculation.
Costs Of Moving
Rent isn’t the only cost when you’re moving. The costs of moving to consider are:
Security deposit – most landlords, ask for a security deposit. Usually, it will be one month of rent. Know how much they expect you to pay.
Fees – there may be additional fees that you need to take into account. Examples include a one-time broker’s fee, maintenance fees, or costs of having a pet. Ask your landlord about this to avoid surprises.
Overlap in rent between your old and new lease, causing you to pay double rent for a couple of weeks or months.
Furniture – if your last place was fully furnished, or you want to change things up, you may want to budget for some new to you furniture. Changing up your furniture doesn’t have to be expensive.
Budgeting When You Know How Much to Spend on Rent
When you have the answer to the question, How much rent can I afford? You can start to set up the rest of your monthly budget. Since rent will be one of the most significant living expenses, figuring out the rest of your spending will be easier when you know that number.
A budgeting method that is widely used is the 50-30-20 budgeting method. This budgeting method focuses on paying current bills, saving for the future, and leaves some room for fun. The allocation is as follows:
Spend 50% per month on necessities.
50% of your paycheck should go to necessities, including rent, utilities, insurance, and groceries. It also includes minimum monthly payments on any debt you have, like a student loan, car payments, or credit card debt.
Spend 30% per month on wants.
30% of your income should go to wants, which includes the things you enjoy in life. It can be anything you love or enjoy; going out to eat, giving gifts to others, getting the latest game console, or having subscriptions to your favorite streaming services.
As long as it fits in the 30%, you can do anything you want with it.
Spend 20% on savings and debts.
The remaining 20% of your income should go to saving, investing, and paying off debt. Any minimum debt payments go into the 50% necessity category. The 20% savings and debts category gives you the room to build something for the future.
Frequently Asked Questions – How Much Rent Can I Afford?
Many questions come up regarding how much rent you can afford and are willing to pay. The most frequently asked questions are discussed below.
Do I Use Annual Gross Income or Net Income To Calculate the Rent?
If you want to calculate how much rent you can afford, you take the percentage of your net income. While it is more convenient to calculate your gross monthly income, income taxes aren’t constant in every state or city. Many factors determine your net income, so calculating with take-home pay will give the most reliable result.
How Much Rent Should I Pay Based on My Salary?
The golden standard is that no more than 30% of your after-tax income should go to rent. If you want to focus on rent costs, including utilities, groceries, and other living costs, you would want to stay below 50%. As with many things in personal finances, no one way works for everyone.
If you want to know how much rent you can afford, it is best to make a short overview. You can write down how much you earn every month, how much you want to save, and how much you want to spend on expenses. Keep adjusting the number until you’re satisfied.
Do You Really Have To Make 3 Times The Rent?
While there are a few exceptions, most landlords feel comfortable renting you an apartment or home if you make three times the monthly rent. Landlords ask for proof of income as well. They do this to make sure that you can afford the place and can pay rent.
How Much Rent Can I Afford For My Salary?
With the 30% rule, the rent you can afford on your salary is:
When you have an annual salary of $30,000 a year, your ideal rent would be $750.
When you have a net income of $40,000 a year, your ideal rent would be $1000.
When you have a yearly net income of $50,000 a year, your ideal rent would be $1250.
When you have a total income of $70,000 a year, your ideal rent would be $1750.
When you have an annual household income of $100,000 a year, your ideal rent would be $2500.
As you calculate monthly how much rent you can afford, you see it depends highly on your income level. It can be challenging if you are on the low-income side to find a one-bedroom apartment where your fixed expenses are something you can afford based on your monthly salary. While your rent payment ideally should not exceed 30% of your income, it is not always possible. A solution could be to look for a two-bedroom apartment with a roommate or earn other income.
Conclusion on How Much Rent Can I Afford?
When you want to calculate how much rent you can afford, it is best to start with your net income. The rule-of-thumb for renting is that your rent should be around 30% of your income. Calculate rent by taking 30% of your salary and start to check if that rent is realistic in your area. Be sure to include other costs like moving expenses, broker fees, or new to you furniture.
By determining your budget for renting before you start looking for your next apartment, you save yourself a lot of time in the process. You only look for apartments that fit your budget and meet your other requirements.
When you follow the 30% rule, you have already roughly distributed your budget. If you want to further divide your budget, you can do so by looking at the 50-30-20 budgeting rule. This will give you a complete image of how your rent will affect your ability to cover your other expenses.
Ask yourself what lifestyle you want to live, calculate your budget, including your rent, and set financial goals for the future. If you take these steps, you will get a complete and accurate picture of how much rent you can afford.
This article originally appeared on Your Money Geek and has been republished with permission.
Like many others, we’re looking forward to leaving this year behind and having a fresh start in 2021. And there is no better time than the New Year to start making changes in your life and create new financial habits.
If you want to change your financial picture, you need to begin by setting realistic financial goals. Whether you’re hoping to increase your retirement savings, set enough money aside for a down payment on a house, or grow your annual income, there’s no better time to start than in a new year.
Regardless of your goals, the first step to a healthier financial future is to plan to help make your resolutions stick. Keep on reading to learn how you can make lasting changes and take control of your finances in the New Year and beyond.
How to Save More in 2021
If saving more money is one of your goals for 2021, one of the most important skills you’ll have to master is patience—that and budgeting. It will take time to grow your accounts as you work towards specific savings goals.
Remember that there is no secret trick to saving money fast. It all comes down to making small changes that have a big impact on your overall savings. Put these six savings tips to work so you can get on the path to financial stability:
1. Track Your Spending and Budget for Your Savings
One of the best ways to grow your savings is to track your spending carefully. By actively monitoring all of your income and expenditures, you’ll be able to see where your money is going and avoid any impulse purchases.
A budget will also offer a valuable perspective on where you spend your money and how you could put it to better use. It will help you spot areas where you’re spending more than you realize and can also be set up to allow for the occasional indulgence as well as unforeseen emergencies. You can draft your budget from scratch using an online monthly budget calculator to quickly understand and evaluate your spending habits.
If your budget shows that there should be money left over, but you’re spending it before you can save it, there’s a method that can improve your habits. Budget your savings, and work that into your automatic transfers. You can also work backward by reviewing your salary and subtract all your expenses from it. If there’s anything left, the difference should go directly into your savings account.
2. Scale Back Your Expenses
To carve out more savings quickly, consider giving up or cutting back on one monthly expense and put that money in the bank. This could be a small ticket item that adds up quickly—think your daily $6 coffee or that $10 subscription you don’t use. It could also be a more expensive luxury such as a weekly massage or ordering $45 worth of takeout instead of cooking at home.
Then, park that extra money directly into your savings account to increase your savings rate. If you cut back or remove the expense altogether, you’ll find the savings do add up. Plus, chances are, you won’t even miss spending that money, and you’ll be pleasantly surprised at how much of a difference it can make to your savings long-term.
Overall, it would be best if you strived to stop buying things thoughtlessly, as all your spending should be bringing you closer to your goals. If it’s not necessary (such as food, shelter, and transportation), cut it from your budget. Do your best to be a mindful consumer—not a mindless one.
3. Set-Up Automatic Transfers
One of the best (and most convenient) paths toward wealth accumulation is to set up automatic savings. This will have you saving money without even thinking about it—assuming you have a budget in place and know both your expenses and savings goals. Plus, when money is moving from checking to savings account automatically each payday, there’ll be less temptation to spend it. All you’ll have to do is sit back and watch your savings balance grow over time.
When setting up automatic transfers to your savings account, be sure to review your budget and choose an amount you can commit to regularly. Then, put your savings on autopilot. We recommend selecting a savings account that offers a combination of the best interest rates and the fewest fees so you can maximize your savings growth.
4. Spend Money Intentionally
Before making any over $50 that isn’t a necessity, try imposing a 24-hour grace period. Instead of buying an item on impulse, go home, and sleep on it. If you still want that item a day later and make sense in your budget, go ahead and purchase it.
Most of the time, you’ll find that you don’t want the item as much as you thought you did, and you’ve just avoided experiencing buyer’s remorse. Another straightforward way to decide on a purchase is to determine how many hours of work will take you to afford it.
For example, if you earn $18 an hour, and you want to buy a $108 pair of pants, you should think about whether those pants are worth six hours of your time.
5. Say Goodbye to Your Credit Card and Go Cash Only
If you’re finding that you’re constantly tempted to overspend using credit, you should consider temporarily switching to a cash-only budget. While not always very convenient, this method is a great way to prevent yourself from overspending.
You’ll learn how to consciously consider your purchasing choices and stay on track with your savings goals. It’s crucial to know how much you’re actually spending—as opposed to tapping a card and forgetting about the purchase almost immediately.
A simple way to implement this is to use the envelope system. At the beginning of each month (you could do this bi-weekly, too), stash your budgeted amount of cash into envelopes individually labeled for each spending category. When you’ve run out of cash for a specific envelope, you’ve spent your budgeted amount in that category for the remainder of the time you’ve allotted.
Again, the goal is simple: to become a mindful consumer instead of a mindless one.
6. Build Up an Emergency Fund
One of the most significant savings goals you should consider is building up an emergency fund. It’s nearly impossible to predict what life has in store for you. Whether it’s an unforeseen illness, job loss, unexpected home or auto repairs, a financial emergency can occur suddenly and significantly impact your financial health and stability. If you start an emergency fund, you won’t have to worry if you’re prepared to handle them.
Historically, it’s recommended to have an emergency fund covering three to six months of living expenses. However, at the end of the day, the only opinion that matters is yours. Ask yourself how much you’d need to have tucked away to feel secure, and then work towards saving that amount.
How to Invest More in 2021
Contrary to popular belief, you don’t need to be a Wolf of Wall Street to start investing and growing your money. It’s absolutely okay to be a beginner. You’ll quickly learn that even if you only have a few dollars to spare, your money will grow with the power of compound interest.
As we’ve discussed above, the key to building wealth is developing good habits. Once you’ve grown your savings and have some money to play with, you can begin your investing journey. Investing comes in many different forms, and with so many other options, investing is simpler and more straightforward than ever before. Soon you’ll learn how addictive growing your money can be.
Here are four ways to invest more in 2021:
1. Have a Robo-advisor Invest for You
Put, robo-advisors are automated investment portfolio managers. They’re software platforms that can help users manage their investments without the need to self-manage their portfolio or consult a financial advisor. Robo-advisors are a low-fee alternative to traditional financial advisors. They may be structured as a fixed monthly fee as low as $1 or a percentage of assets, roughly ranging from 0.15% to 0.50%.
A new customer signing up for a robo-advisor will begin by providing basic information about their investment goals through a series of questions online. These questions will touch on investment timelines, risk tolerance, and how much you have in savings. The robo-advisor will then run those answers through an algorithm to provide a specific approach and portfolio of investments that meet your goals.
Once your funds are invested, the robo-advisor will make ongoing decisions about investing your money and rebalance your portfolio accordingly to ensure that it remains on track with your goals.
Choosing which robo-advisor is right for you depends on your investment goals if you want access to a financial advisor, and what your current portfolio looks like. If you’re considering using a robo-advisor, here are a few we recommend:
Betterment
M1 Finance
Wealthsimple
Robo-advisors are best for investors who want to set and forget their investment portfolios but still get active portfolio management. If you don’t know much about investing or don’t want to spend too much time on it, a robo-advisor is perfect for your needs.
However, some experienced investors could find value in a robo-advisor as well. The low-fee structure and automated features could be ideal for long-term goals and retirement investing accounts.
2. Invest in the Stock Market
Investing in the stock market is a popular path to making money work harder, and thanks to the power of the internet, you don’t have to invest thousands of dollars to get your feet wet. You can start by setting aside a few dollars you would normally spend on a daily coffee and invest the monthly total in stocks.
There is an increasing number of investment apps—such as Stash or Robinhood—that allows you to familiarize yourself with investing before making a larger commitment.
However, always keep in mind that if you choose to invest in stocks to grow your wealth, know that there is no guarantee of how your stocks will perform. You must diversify your investments by including stocks, bonds, certificates of deposits (CDs), and other money market accounts.
This will protect you from the constant instability of the financial markets.
3. Consider Real Estate
While there are considerably endless ways to invest your money, research shows that real estate is the best long-term investment option. Consider investing in real estate if you have considerable savings lying around and want to put your money to work. There are various ways to make money when investing in real estate, but the most popular methods include real estate appreciation and a cash flow income property.
Real estate appreciation occurs when a property increases in value due to a change in the real estate market. However, it’s a tricky method because the market is somewhat unpredictable, making it riskier than investing for cash flow income.
On the other hand, a cash flow income investment focuses on buying a real estate property to earn revenue. Income properties could be residential, such as single-family homes, apartment buildings, etc. They could be commercial properties. As an owner, you would make money through holding and renting the property while it appreciates, then selling it for profit at a later date.
It’s important to remember that investing in real estate holds a lower risk than the stock market, as the housing market isn’t subject to as much of the same volatility as the stock market. You won’t have the same earning potential, but you can count on a steady include and steady cash flow most of the time.
4. Enrol in Your Employer’s Retirement Plan
Most employers offer matching contributions for their employees for any investment into a 401(k). That’s free money that can set you up for financial stability and success!
It would be best if you aimed to contribute 10-15% of your salary now to set yourself up for a secure financial future. However, if you’re on a tight budget, you can start with even just 1%. You likely won’t even miss a contribution that small, and you can gradually begin to increase it so it fits into your budget.
Be sure to calculate your retirement and set your goals accordingly accurately. Using various tools, such as a free online retirement calculator, you’ll have confidence in your ability to retire comfortably.
How to Earn More in 2021
Whether you’re trying to pay off your debt, save more for retirement, or increase your monthly income, there are various side hustles and opportunities that you can earn more money aside from your primary revenue.
Here are ten ways you can make some extra money in 2021:
1. Drive for Uber or Lyft
Consider joining either Uber or Lyft (or both) to earn more money by driving passengers around. Just be sure that you don’t forget to factor in both gas and maintenance costs. You’ll also need an eligible car that’s in good condition and agree to a background check and a review of your driving history.
2. Make Deliveries for Various Services
Now more than ever before, folks are having everything delivered directly to their home. Take advantage of the growing delivery trend and sign up for a service such as InstaCart, Uber Eats, Postmates, DoorDash—you get the drift.
In most cases, you get paid per delivery and even have the opportunity to earn tips. Plus, a car isn’t always required. Some of these services will allow you to use a bike, scooter, or even your own two feet to make deliveries. However, a background check is almost always part of the deal.
3. Pick Up Freelance Work Online
Have a skill that you’d like to flex?
Whether it’s programming, writing, marketing, design, data entry, or even being a virtual assistant, there are plenty of opportunities to earn extra income through freelancing. Websites such as Elevate, Patreon, Upwork, Fiverr, and Freelancer are a great place to get started.
No matter what kind of freelance work you do, remember to know your worth and keep track of the going rate for the service you provide. This way, you’ll know if you’re charging too much or too little.
4. Generate Profit With Affiliate Marketing
If you have the right traffic source for what you’re selling, affiliate marketing is a great way to make money online.
Affiliate marketing is when you (the affiliate) recommend a product or service to your followers through your website, blog, or email list. If your followers decide to purchase that product or service using your affiliate link, you will get paid a commission for the sale.
Essentially, affiliate marketing is classic advertising, just in a less intrusive form.
5. Sell Your Merch Online
Have a hobby you’d like to turn into extra income? From woodworking to jewelry-making, embroidery to pottery, there are opportunities to make money selling your unique items.
The best route for this venture is to sell your goods on Etsy, the go-to site for artisans selling home goods, arts, crafts, vintage items, and everything in between. Etsy boasts almost 48 million users and grossed $5 billion in merchandise sales in 2019. And this was before the push to support local vendors instead of big-box stores.
Keep in mind that there are other factors to consider before you dive in. Do your research and make sure your goods will actually sell and for what cost.
Don’t forget to research the competition as well and factor in Etsy’s fees.
6. Put that Extra Space in Your Home to Use
If you have an extra space in your home, including, but not limited to, closets, basements, spare bathrooms, living rooms, garages, and parking spaces, you can rent it out with Stache.
All you have to do with their service is to list your space for free, set your price and details, and coordinate a booking. Then, you can sit back, relax, and earn that extra income.
7. Sign Up to Be a Mystery Shopper
It’s common practice as a business to know how you’re performing from a customer’s perspective. Why not sign up to be their eyes and ears?
Apply online through various sites such as IntelliShop, Market Force, BestMark, and Sinclair Customer Metrics. Always remember to be aware of scams and do your research accordingly before moving forward.
8. Become a Private Tutor
Turn your skills in math, science, a foreign language, or any other form of expertise into a lucrative side gig by becoming a private tutor (either online or in-person).
To get started, see what types of tutors are needed on Craigslist. Alternatively, you can create a profile on sites such as Tutor or Care. What you charge will depend on various factors, such as your experience, expertise, and what’s in demand.
9. Complete Tasks for Other People
If you don’t mind putting together Ikea furniture, picking up dry cleaning, or getting prescriptions filled, TaskRabbit is a great way to earn some extra cash. This website can connect you with people in your area who need help with various tasks, such as moving, cleaning, handyman services, and more. Please note that some tasks have been temporarily suspended due to the COVID-19 pandemic.
To be eligible, you must be 18 or older, have a checking account and credit card, a smartphone, and pass all background and ID checks. You’ll have to provide basic information about yourself, upload a profile photo, set up direct deposit, and state your level of experience for specific tasks.
Note: If TaskRabbit approves your application, you’ll then be charged a non-refundable $25 registration fee and attend an orientation before you can begin.
10. Test Websites and Apps
Through sites such as UserTesting, you have the opportunity to get paid for your thoughts on how well—or not so well—an individual website or app worked.
You’ll need to be 18 or older and pass a short test to be accepted. You’ll also need to have a computer, internet connection, and a microphone. Additionally, any mobile app testers will need an Android or IOS device.
Once you’ve passed the requirements, you’ll then be paid $10 for each 20-minute test—which involves a recording and answering four follow-up questions. You could also earn up to $120 if you choose to participate in a video conversation after your test.
Start 2021 on the Right Foot
Regardless of your financial resolutions for 2021, it’s always a smart idea to create a financial plan. By having clear, concise financial goals for the year, you’ll be able to measure your progress and achieve financial success.
This article originally appeared on Your Money Geek and has been republished with permission.
Since the coronavirus pandemic began nearly a year ago, an unprecedented number of people have started working from home. No longer just for the lucky individual, working from home became a company-wide necessity in some cases, with thousands of workers permanently trading in their offices and coworking spaces for more COVID-19-compliant situations.
For some, the indefinite possibility of telecommuting turned into a unique travel opportunity, or even a chance to relocate to their favorite rural destination while maintaining a big-city job. And although this might have changed things for the better for some workers, there are still a few things to consider in this new world of remote work — like the tax implications.
Whether you moved, spent a good part of the year traveling, or just recently started to earn money from your house, working outside of the state where your job is based can have some pretty messy consequences when it comes to time to file your taxes, including the possibility of paying additional tax.
Here’s everything you need to know about working remotely, and what it could mean for your taxes this year.
1. You might be creating a nexus
Although this might sound like something from outer space, it’s not, and creating a nexus could hit too close to home for you this tax season.
“When an employee works from home or an office in a state other than the employer’s home state, that can create a physical nexus for the employer,” explains tax attorney Allie Petrova. “It can become a problem for the employer if the employer had no nexus in the state and now because of employee presence, the employer becomes subject to taxation in that state.”
Although creating a nexus might not affect you as much as your employer, it’s worth thinking about — especially if you work for a smaller company or if your employer isn’t aware that you’ve been working out of state. Because income is taxed based on the state where you physically earned it, and because every state has slightly different tax laws, teleworking from outside of your company’s state could mean tax penalties for the business. And, if you haven’t (or don’t plan on) updating your address with the IRS, it could also mean consequences for your own taxes.
Although larger companies tend to have established tax relationships with states other than their home state, this might not be the case for smaller businesses. If you moved out of state or spent a significant amount of time working elsewhere this year, be sure to talk to your employer so you can both avoid any unexpected tax penalties.
2. You might be subject to dual residency
Another thing that can happen as a result of working in multiple states is being hit with something called dual residency. This occurs naturally whenever you report a move to the IRS, and will result in you getting taxed for different portions of the calendar year based on where you lived. For example, if you lived in New York from January to March but then moved to California, you’d pay New York state taxes for those three months, and California taxes for the rest of that year.
The problem comes when dual residency results in double taxation, which can happen for a few reasons. If for example, you declare your domicile (or permanent home) to be in one country but reside for over 183 days (half the year) in another country, then your income may be taxed twice by both countries for the portion of the time you lived abroad.
Another issue that happens is when your location within the U.S. is unclear, which can sometimes result in multiple states vying for the right to tax the same portion of your income — also called residency audits. This is another form of double taxation, and it’s happening more and more, especially in states where legislators have caught on to the fact that people tend to leave seasonally and work portions of the year elsewhere.
To avoid these tax issues, it’s good to be upfront about your whereabouts, both with your employer and the IRS. You should also consider documenting the dates of your travel, or if applicable, your move. If the move is a permanent one, take steps to establish your state of residence (like changing your mailing address and getting a new driver’s license) as soon as possible — all of which will help when it comes time to figure out how to file your taxes. And if you plan on spending half the year in another country, be prepared for the possibility of double taxation.
3. You might benefit from reciprocity agreements
Although some states might fight tooth and nail for the right to tax your income, others have found a better solution, and that comes in the form of reciprocity agreements.
Reciprocity agreements are contracts between states that allow residents of one state to work in a neighboring state without having to file non-resident tax returns. For some states, this might mean offering a tax credit, the amount of which will vary based on the state. For others, they’ve simply worked out which of the two places will collect your state income tax in order to avoid making you pay twice. For example, if you live in Pennsylvania but work in New Jersey, you’d be able to submit an exemption to your employer in New Jersey, which would make sure your tax withholding is done for Pennsylvania and avoid any need to file a nonresident state tax return to the state of New Jersey.
This is hugely helpful for people who live near state lines and commute across the border for work. But depending on which states you live and work in, you might just find yourself lucky enough to enjoy this perk as a remote worker. The best way to find out whether your state has any reciprocity agreements with neighboring states is simply to look it up. Although these agreements are changing all the time, you can find out about your states by checking with the states in question or with your tax preparer.
4. You might have accidentally picked an aggressive state
On the flip side, you might find yourself living in a notoriously aggressive state. Although some states (notably California) have offered some sort of “nexus relief” to avoid overtaxing businesses or individuals for the duration of the pandemic, many haven’t. Others, like Kentucky, have said they’ll consider the impact on taxpayers working from home on a case-by-case basis.
Still, other states remain silent on what their tax policy will be or otherwise saying it will depend on the conditions surrounding why a particular taxpayer is working from home. States might be more forgiving if someone is working from home because they’re considered part of the high-risk population, or if they’re working from home due to government lockdown orders.
The best way to find out how aggressively your state is pursuing tax revenue this year is to visit your state’s official website. Search for resources for taxpayers and businesses, and even consider contacting the correct state office directly for more information.
5. You might be mistaken about home office deductions
In the midst of our ever-changing work environment, another topic that’s confusing taxpayers is when and if they qualify for certain home office deductions. Although freelancers and small business owners who work from home have historically qualified for some type of home office deductions, that doesn’t mean the benefit is available to everyone.
In fact, if you’re considered to be an employee of a company (as opposed to an independent contractor), you likely don’t qualify. Because of legislation passed in the Tax Cuts and Jobs Act of 2017, employees who receive a paycheck or a federal W-2 form exclusively from one employer are not eligible for home office deductions.
In a nutshell, this means that as a remote employee, you won’t be able to make deductions for things like insurance, utilities, repairs, or depreciation related to anything in your home office — even if that’s where you spend all of your time working.
How to simplify your taxes
Whether you’ve been working remotely for years or just started recently, there are some relatively simple ways you can ensure a smoother tax filing experience this year. Here are some of our top tips for simplifying your taxes.
Use a tax-filing software
Don’t go at filing your taxes alone. One of the easiest ways to ensure you don’t run into issues when filing your taxes is to use the services of the best tax software on the market. These programs not only help ensure you receive every possible deduction, but they’ll also help you avoid incurring fees or penalties from the IRS by ensuring every state income tax return you file is done correctly.
Do your research
Before it comes time to file your taxes, be sure to do your research on every state you spent time working in. This is also a good idea for future trips, especially if you’re getting ready to plan a work-cation. By knowing the taxation laws for the states you telework from, you can avoid any bad surprises later and be better prepared when it comes to how to manage your money.
FAQs
Are you taxed by where you live or work?
This depends on the state. Although most states tax your income based on where your physical presence is when you work, a few states (including Arkansas, Connecticut, Delaware, Massachusetts, Nebraska, New York, and Pennsylvania) have what’s called a “convenience of employer” rule, which taxes your income based on the state where your employer’s office is located.
Can I be taxed on the same income in two states?
Although the Supreme Court ruled in 2015 that two states cannot tax the same income, the actual on-the-ground reality of how that works out can get more complicated. You may be taxed by two states on the same income, but receive a credit from one of the states. And if your legal domicile or residency comes into question, two different states may feel they have the right to tax you and aggressively pursue that money. If you have questions regarding your specific situation and tax liability, it’s best if you book some time to talk with a tax professional.
Is it legal to work remotely from another country?
Although it’s legal to work remotely from another country, you should be aware of the 183-day rule, which states that anyone working 183 days (half the year) in another country is subject to taxation laws in both countries.
Bottom line
Taxation laws are never straightforward, and as of late, almost constantly changing. Although it wouldn’t be surprising if we see newer, more comprehensive laws for remote workers and teleworkers in the future, this year’s tax season may be a confusing one for many first-time telecommuters.
Familiarize yourself with the current tax laws in your state before it comes time to file, and be sure to seek expert advice — through tax-filing services, software, or a certified public accountant (CPA) — if you feel like you need additional help.
What is real estate commission? One survey says the national average commission rate is 5.4% but that can vary from region to region. What rate will you get your area? #personalfinance #realestate
If you are in the market to sell your home, a good real estate agent is an invaluable asset.
Agents help their clients navigate the market and find potential buyers, and in return for their time and expertise, they charge commission fees. But what exactly is covered in agent commission fees? And what can homeowners expect to receive in exchange for these costs?
Read on to gain a full understanding of what real estate commission is, how much it costs, who pays for it, and alternative routes sellers can take if they are looking to save money.
What Is the Average Real Estate Commission?
How much is the commission of a real estate agent? According to a nationwide agent survey by Clever Real Estate, the national average is 5.45% of a home’s final sale price. However, the actual answer to that question really depends on which state you’re in, as realtor rates are highly localized.
For example, in Florida, commission fees average 6%, split between the buyer’s and seller’s agents. In Texas, on the other hand, commission fees average only 5.65%. Moreover, the rates in New York, California, and D.C. are all lower than the national average, at 5.29%, 5.02%, and 4.90%, respectively. Note, though, that home sale prices in New York, California, and D.C. are also higher than the national average, potentially offsetting any cost-savings one might gain from lower commission rates.
Prices vary because agents all charge different rates, and some agents will charge lower rates if you negotiate with them. Moreover, there are also discount brokers such as Clever Real Estate that negotiate with agents on their clients’ behalf for lower rates; but we will cover all of that later in this article.
Who Pays Real Estate Commission Fees?
Typically, it is the seller’s responsibility to pay real estate commission fees. That means sellers pay for both their own agent for listing the property as well as the buyer’s agent.
Agents will usually split the commission between themselves, but the split can vary. Sometimes, more experienced agents will get a larger cut than new agents. If an agent represents both the buyer and the seller, known as a dual agent, the agent will get paid both commissions.
Regardless, both the seller’s and the buyer’s agent fees are determined ahead of time in their respective contracts with their clients.
What Do Real Estate Commission Fees Cover?
Real estate agents charge a commission for their time, services, and expertise. A good real estate agent will make the home-selling process much smoother and should have a large network of potential buyers to show your property.
They know their locality like the back of their hand and can potentially bring in multiple offers, especially in a seller’s market. And multiple offers means you may even start a bidding war, which will give you more leverage during negotiations.
Your agent will also take care of the minutiae of selling a home, such as listing it on the MLS, marketing it via different real estate channels, negotiating with potential buyers, and finalizing the closing process.
Using a knowledgeable and well-connected agent is also more likely to result in a higher sale price. A recent survey by the National Association of Realtors found that the typical FSBO (“for sale by owner”) home sold for $190,000, compared with $249,000 for agent-assisted home sales. This enormous difference in the sales price and the amount owners save is why most people opt to use an agent.
Can I Negotiate Real Estate Commission Fees?
Yes, you can negotiate commission fees, and you should!
In the current seller’s market, agents know that clients can easily look elsewhere if they think their rates are too high. And if you’re in a hot market such as Miami or San Francisco or if you have a desirable home that will sell quickly, then you should definitely try negotiating a lower rate.
Although you can ask your agent for a lower rate, they are not required to oblige your request. According to a 2019 report by the Consumer Federation of America, 73% of agents said they would not lower their standard rate if a client asked. If you’re a glass-half-full kind of person, though, that study also reveals that more than one in four agents will lower their standard rate if a client asks. Therefore, it doesn’t hurt to try negotiating for a better deal.
Are There Ways Around Paying Commission Fees?
To avoid paying commission fees, homeowners can choose to forgo an agent altogether and use a local multiple listing service (MLS), which typically charges a flat fee between $99-$500.
However, the owner will be responsible for all of the responsibilities an agent usually handles, such as marketing their property, negotiating closing costs, home inspections, and more. Selling a home as FSBO (for sale by owner) is not quite a walk in the park, which is probably why only 7% of sellers used this method in 2019.
Another option that owners can turn to if they are looking to reduce commission costs is working with a discount real estate broker such as Clever Real Estate, which charges a flat fee for their services instead of a percentage-based commission. Clever negotiates better rates for their clients with top local real estate agents, offering a full-service sales experience for a flat fee of $3,000 or 1% if your home sells for more than $350,000.
These brokers can charge such competitive rates because they supply agents with a steady stream of revenue, allowing them to make up in volume what they sacrifice in commission.
Which Option Is Best for Me?
When determining whether to use an agent or which type of agent to use, you must consider how much time and effort you personally want to spend selling your home. If you are an experienced real estate professional who understands the market, then listing on a local MLS service might be the best route for you. If you are like most home sellers, though, and aren’t a real estate guru, then using an agent is probably the better option.
If you’re curious about what it would cost to use a traditional agent versus a discount broker versus a flat fee MLS listing service, here is an example to demonstrate what you’d pay in commission for each instance on a home that sells for $211,000:
The Traditional Model
Home price: $211,000
Seller Commission: 3%
Buyer Commission: 3%
($211,000 x 0.06) =
$12,660 total commission paid
The Discount Broker Model
Home price: $211,000
Seller Commission: $3,000 flat fee
Buyer Commission: 3%
Service Fees: $0
($211,000 x 0.03) + $3000 =
$9,330 total commission paid
The Flat Fee MLS Listing Model
Home price: $211,000
Flat Fee MLS Service Fee: $299
Buyer Commission: 3%
($211,000 x 0.03) + $299 =
$6,629 total commission paid
As you can see, the cost savings on using a discount broker versus a traditional agent are significant. That’s why many people opt for discount brokers such as Clever Real Estate. Clever offers its customers a full-service sales experience for a flat-fee of just $3,000 or 1%, and all of Clever’s agents are top-rated in their area.
Visit listwithclever.com to get in touch with thousands of local agents and list your home today.
This article originally appeared on Your Money Geek and has been republished with permission.
To many, college feels like a free-for-all — a time when young adults can experiment with freedom but continue to enjoy the safety and security of an academic setting. Though some college students work to pay their expenses, many more rely on student loans, savings, and their parents’ money to fund their four years of university lifestyle.
Unfortunately, those first four years of adulthood are more impactful on future success than many college students realize. Especially when it comes to personal finance, college years can lay the foundation of bad habits that make wealth and happiness much more difficult to obtain. Whether you are a college student or you know a college student, here are some bad money mistakes to be aware of during the next four years:
Skipping Scholarships and Financial Aid
Yes, you can get all your college-related expenses covered by student loans — but that doesn’t mean you should. Loans might feel like free money right now, but in a few years, your student loans are going to be a massive financial burden that dictates where you live, what kind of job(s) you work, and how much fun you can afford to have. If you want the rest of your young adulthood after college to be fun and rewarding, you want to limit your student loans as much as possible.
One of the best ways to reduce student loans is by pursuing scholarships and financial aid programs. There is an almost unknowable number of scholarships available through colleges and universities, local, state, and federal government agencies, and even private companies; many of these scholarships require a one-page application and can award thousands of dollars in student funding. Meanwhile, financial aid programs take many forms, from reduced tuition costs to work-study programs. Before you commit to anyone method for paying for college, you should research other potential options of income.
Abusing Credit Cards
When you are already accruing thousands of dollars of student loans, a bit more debt won’t hurt — right? Unfortunately, credit card debt is some of the worst debt you can accrue. Credit cards come with punishingly high-interest rates and low minimum payments, meaning that if you aren’t careful, you could be paying your credit card debt for far longer than your student loans. You should get in the habit of paying your credit balance in full every month — or not using your credit cards much at all.
Being Wanton With Personal Information
In college, it feels like you have to enter your full name, birth date, and social security number on a different document every day, but the truth is you should be careful to read and understand every request for any type of personal information. College kids are often targeted by scammers because they tend to lack the awareness of potential threats or the responsibility to keep their personal information safe. You should protect information that can be used to identify you — and your financial information, too — by keeping that data secret and by being aware of common scams.
Failing to Budget
Everyone needs a budget, and that is especially true of college students who tend to have high expenses and limited budgets. It is a bit easier to manage your money when you have access to personal finance software that can track your spending, automate savings and bill paying and work with you on maintaining your budget. You might ask loved ones for a money management tool for graduation if you can’t currently afford a robust service.
Ignoring Retirement
Retirement might feel like eons away, but after college, the years come faster than you think. Because retirement savings grow over time, the sooner you start adding to your retirement fund, the more money you will have available when you finally call your career quits. Even if you can use a college savings fund to pay all your expenses through university, you should consider getting a part-time job if only to help you build emergency savings and start contributing to your retirement. You can add as much as $6,000 to a Roth IRA every year, and you might as well max out those accounts while you can.
While you should take the opportunity to learn and grow during your college years, you shouldn’t allow your experience to sink your finances for life. By being aware of the pitfalls of money management in college, you can make smarter choices for your future.
We often hear that Millennials are terrible investors because most Millennials entered the workforce during the 2008 financial crisis. Afterward, many hesitated to invest after seeing their families lose money, and those who often invested very conservatively. Many have avoided stocks, even the more conservative high dividend stocks.
Which begs the question – have Millennials changed their investment strategies? Let’s take a look.
With 20/20 hindsight, most people would agree that not investing during the turbulent 2008 financial crisis was a regret. Shortly after, we saw one of the greatest economic booms to the economy and those who invested made some of the greatest returns.
At this time, Millennials are facing their second economic recession with the 2020 pandemic (or third recession if we count the 2001 September 11th financial swing). Being recession veterans, they’re betting on a strong economic recovery.
Popular Millennial Stocks
This has been seen by Financial Brokerage Platforms like Robinhood, popular among Millennials. The platform gained 10 million users from 2016 to 2020 and added 3 million users during the pandemic.
By living through a strong economic recovery, Millennials show they are more comfortable with the stock market and purchasing stocks with their creative ways to make money.
The primary stocks that Millennials are purchasing are tech stocks (Tesla, Microsoft, Apple). As well as companies with strong brand awareness (Virgin Galactic, Amazon, Peloton) according to Robinhood’s list of 100 popular stocks.
Interestingly, some of these popular Millennial stocks offer dividends and create a rise in dividend investing. Dividend stocks traditionally offer stable returns and lower volatility, providing comfort to those Millennials with the 2008 financial crisis still fresh in their minds.
Millennials are gaining regular dividends, and additional portfolio growth as dividend stocks have outperformed their peers from 1990 to 2015 (source).
What Are Dividends
If you’re not familiar with dividends, here is a short recap.
Dividends are a portion of the company’s earnings that are distributed to shareholders. In addition to the value of a company’s stock going up, dividends are an additional payment sent to shareholders simply for owning the company.
Dividend payments are sent typically monthly, quarterly, or on an annual timeline, and determined by the company’s board of directors.
The types of companies that usually offer dividends are traditionally more established companies.
Dividend Investing Is a Growing Trend
Dividend Investing is a growing trend investment strategy involving owning primarily stocks that offer dividends. The idea is that by owning enough stocks that offer dividends, those dividend payments can eventually entirely replace your income for retirement.
Retirees may save up a large retirement nest egg, but they will eventually need to sell those stocks for money in retirement. Often using the rule of 4% to get the longest life out of their nest egg. All while hoping their nest egg doesn’t run out before they die.
The benefit of dividend investing is that there is no need to sell their stocks by retiring on the dividend income. The dividend payments from your stocks can cover all your expenses till the end of life. This helps ensure you have a consistent income stream in retirement and the ability to leave a sizeable inheritance for your heirs.
Take into consideration Warren Buffett, arguably one of the greatest investors who ever lived. He has a $200 billion portfolio through Berkshire Hathaway, consisting of 47 stocks. Two-thirds of those stocks have one thing in common – they provide dividends.
What Is The Average Dividend Yield
We established dividends are a portion of the company’s earnings distributed to shareholders, but how much do shareholders get?
Each company sets its own divided as a fixed dollar amount per share owned. However, the industry typically gauges dividend amounts as a dividend yield. This is the dividend compared to the current value of the stock. So while the dividend amount is typically pretty consistent dollar value, the dividend yield changes daily as the stock price changes.
In the S&P 500, which gauges 500 popular American companies. The average dividend yield of the S&P 500 is 2.00%. So, for every $100 you invest in the S&P 500, you will earn $2 annually in dividend payments.
What Are High Dividend Stocks?
High Dividend Stocks are typically stocks that offer a dividend yield greater than the average 2.00%.
Typically high dividend stocks come from companies with strong cash flow such as:
REITs (Real Estate Investment Trust)
Oil & Gas Companies
Telecommunication Companies
Utilities
Banks
High Dividend Stocks do have risks. Companies have been known to offer high dividends to attract investors. However, they may have trouble maintaining their high dividend yield in the long term, and their stock price may suffer. You should always be careful about these and do your research.
Popular High Dividend Stocks
Here are some popular high dividend stocks that have strong brand recognition and high dividend yields.
Bank High Dividend Stocks
Citigroup (C) – Dividend Yield 4.74%
Citigroup is one of the big four banks in the United States and JPMorgan Chase, Bank of America, and Wells Fargo. They offer financial services such as consumer banking and credit, corporate and investment banking, and wealth management. Citigroup is referred to as too big to fail with a market cap of 90.7 billion. When a company is too big to fail, that’s a nice assurance that it’ll continue to keep up its dividend.
JPMorgan Chase (JPM) – Dividend Yield 3.55%
JPMorgan Chase is considered the largest bank in the United States and seventh-largest in the world by total assets. These amount to around $3.2 trillion. The JPMorgan brand is used for banking services, while the Chase brand is used for credit card services.
JPMorgan continues to have a healthy balance sheet and shows they’ll be able to maintain their high dividend stock even during a turbulent 2020.
Energy Company High Dividend Stocks
ExxonMobil (XOM) – Dividend Yield 10.19%
ExxonMobil is the third-largest publicly traded oil and gas company behind Chevron and Saudi Aramco. While oil prices have lately decreased and 2020 has not been kind to any stocks. ExxonMobil continues to maintain a high dividend stock for investors. Plus, there’s a comfort knowing the world will always need electricity.
Chevron (CVX) – Dividend Yield 7.07%
Chevron is another oil & gas company and recently overtook ExxonMobil for the world’s 2nd largest energy company. CVX has been a bit more conservative in its acquisitions and spending. Those choices have created a strong balance sheet for the company to maintain a great high dividend stock.
Edison (EIX) – Dividend Yield 4.53%
Edison is a utility company that generates, transmits, and distributes electricity in the United States, primarily in California. Utility companies like Edison have a fairly stable income stream as there is usually little competition, which helps them maintain high dividend yields.
DCP Midstream (DCP) – Dividend Yield 12.05%
DCP Midstream is also in the oil & gas industry, focusing primarily on transportation. They have 51,000 miles of natural gas pipelines and 44 natural gas processing plants in the united states, making it one of the larger midstream companies.
As they make a good portion of money transporting oil & gas, their revenue depends heavily on the oil price. Right now, oil is priced low, but as that changes, this high dividend stock has a potential upswing for growth.
Real Estate High Dividend Stocks
Realty Income Corporation (O)- Dividend Yield 4.64%
Realty Income is known as the monthly dividend company. Popular among dividend investors as they pay dividends every month. They are a real estate investment trust (REIT) that owns 6,541 properties in the United States, Puerto Rico, and the United Kingdom. They earn money through long-term leases on their properties, which uniquely positions them to weather most short-term economic swings.
Plus, their major tenants are Walgreens, 7-Eleven, Dollar General, FedEx, Dollar Tree. These companies aren’t easily going to get replaced by online eCommerce. If their stable cash flow wasn’t enticing enough, their high monthly dividend of 4.64% is pretty great.
Universal Health Realty Trust (UHT) – Divined Yield 5.01%
Universal Health Realty Trust is another REIT but focuses on hospitals, rehabilitation hospitals, free-standing emergency departments, sub-acute facilities, medical office buildings, and child care facilities. UHT earns money through long-term leases to these healthcare facilities located primarily in Arizona, Nevada, and Texas.
This stock has taken a beating during 2020. Healthcare facilities have had to put off higher-paying services as they adapt their facilities for COVID. Even with the recent stock price fall, it still offers an attractive dividend with growth as the economy improves.
Simon Property Group (SPG) – Dividend Yield 8.02%
Simon Property Group is another interesting REIT on this list. They are the second-largest real estate investment trust in the United States with a significant portfolio in malls, outlets, and large complexes with big-box retailers.
However, the rise of eCommerce has been brutal to Simon Property Group. Plus, 2020 has not been kind to in-person retail. Simon has many assets but needs a significant plan to navigate a future post-COVID and continue to compete with Amazon.
Iron Mountain (IRM) – Dividend Yield 8.99%
Another high-dividend stock on our list. Iron Mountain stores information. They store physical records as well as digital records for companies around the world. This includes 220,000 customers throughout North America, Europe, Latin America, Africa, and Asia.
With over 1,500 storage locations, including underground caves for added security, Iron Mountain is a great solution for companies needing secure offsite storage. Also, they’ve seen significant growth in digital storage. Their recurring revenue through storage services helps maintain their high dividend stock.
Telecommunication High Dividend Stocks
Verizon (VZ) – Dividend Yield 4.3%
Verizon is a well-known brand as they offer wireless telephone services to around 93 million people across the United States. Making it one of the largest phone services in the country. They primarily focus on wireless connectively, making about 70% of their revenue.
Also their Verizon Media Group, they earn revenue from their acquisitions of AOL and Yahoo. Verizon has a strong recurring revenue subscriber base making it a great high dividend stock.
AT&T (T) – Dividend Yield 7.61%
AT&T has been a staple in telecommunications for ages. Their wireless telephone services make about 40% of their revenue, but they’re a bit more diverse. They also have DirectTV, Warner Media (HBO, Warner Brothers, Turner cable networks, etc.).
This diversity has helped AT&T stay relevant, but companies like Netflix, Amazon Prime, and Disney + continue to bite off their network tv revenue.
CenturyLink (LUMN) – Dividend Yield 10.14%
CenturyLink is now Lumen Technologies. A recent name change occurred in September 2020. Lumen is one of the United States’ largest telecommunication companies offering internet services to businesses (75% of revenue) and individual consumers.
With 450,000 miles of fiber connecting people to the internet, Lumen has the infrastructure smaller companies can’t compete with. This helps maintain its market share and high-dividend payouts.
Cisco (CSCO) – Dividend Yield 3.59%
Cisco is not well known by individual consumers. Yet CSCO is one of the world’s largest hardware and software suppliers for networking solutions for businesses. They help companies build their own networks with routers, switches, video conferencing software, data centers, security, and more.
What’s great is that they sell the physical hardware companies need and the software as a subscription for recurring revenue to support that great high dividend stock.
Technology High Dividend Stocks
IBM (IBM) – Dividend Yield 5.18%
IBM is a hardware and software technology company that focuses on cloud computing, artificial intelligence, commerce, data & analytics, IT Infrastructure, security, and a wide range of digital products. They have been paying a dividend since 1916 and considered a solid dividend payer.
They’ve recently made acquisitions of companies like Red Hat to reduce their dividend growth for a bit. These acquisitions will still pay off in billions for the long-term and help maintain IBM’s significant high dividend stock.
Aerospace & Defense High Dividend Stocks
General Dynamics (GD) – Dividend Yield 3.08%
General Dynamics is the 5th largest US defense contractor and business jet manufacturer of Gulfstreams. Being a defense contractor, they receive military contracts that are less susceptible to market swings. They currently have $82.7 billion in backlog, including two US Navy submarines, Abrams tanks, and more.
As United States Defense spending continuing to rise, General Dynamics will continue to benefit as a reputable company in the defense field. For investors, this could be a great high dividend stock to hold on to for the long term.
Insurance High Dividend Stocks
MetLife (MET) – Dividend Yield 4.68%
MetLife is the largest life insurer in the United States and one of the world’s largest as they operate in 40 countries. They make money from premiums, investing income before insurance payouts, and retirement solutions such as annuities.
COVID will certainly have an impact on the insurance business. MetLife is better positioned than other life insurance agencies to weather the storm and maintain its high-dividend stock.
Disclosure: I personally hold O, IRM, VZ, DCP, CSCO. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it. Nor do I have any business relationship with any company whose stock is mentioned in this article. For a full list of my entire stock portfolio, visit Wallet Squirrel.
This article originally appeared on Your Money Geek and has been republished with permission.
Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!
