Guiding Your Company with Business Continuity Planning

Business continuity is a tool for handling the transfer of a business to a different owner when the original owner leaves, dies or becomes incapacitated.  A continuity plan protects short-term and long-term business interests and is one of the most important components to business exit planning. 

Ripple Effects

The death of an owner often sets off a ripple of events for a business if it is not prepared for continuity.  This loss of direction can lead to losses of financial resources and vendors, key talent and ultimately loyal customers.  Below are the key issues that can occur when owners do not create a plan, along with ways to mitigate them:

Loss of Financial Resources

Vendors may decide to discontinue their services to the business, especially if the business defaults on their contracts.  The banks, lessors, bonding and financial institutions you do business with may end their relationship with your company.  How to handle these situations depends on the type of ownership:

Sole owners: Your death can put enormous pressure on the business to continue its performance should third parties refuse to lend money or make guarantees based on the health of your company.  Continuity planning can help offset the loss of leadership.

Partnerships: The loss of financial resources can be mitigated by funding a buy-sell agreement, which places a significant amount of money in the company reserves should you die.

Loss of Key Talent

Another issue that can create problems with business continuity is the loss of your key talent.  If the remaining owners do not have your experience or skills, the business can suffer as if it had been a sole ownership.  Your experience, skills and relationships with customers, vendors and employees may be difficult to replace, especially in the short term.  To overcome this situation, begin grooming and training successive management capable of filling your shoes.  You should also begin preparing for the transition early, because training your replacement can take years.

Loss of Employees and Customers

Particularly with sole ownership, as vendors end their relationship with the business, employees will be unable to satisfy their obligations to customers.  This can hasten the employees’ departure, taking with them key skills and even client relationships. 

To mitigate the loss of key employees, you can incentivize them to continue their employment through a written Stay Bonus that provides bonuses over a period of time, generally 12-18 months.  This bonus is designed to substantially increase their compensation, usually by 50% to 100% for the duration specified.  Typically, this type of bonus is funded using life insurance in an amount that is sufficient to pay the bonuses over the desired timeframe.

Continuity Planning

For businesses with only one owner, it should be obvious that there will be no continuity of the business unless a sole owner takes the appropriate steps to create a future owner.  Whether it be grooming a successor or creating group ownership, this step is one that should be addressed early.  Even if your business is owned by your estate or a trust, you will need to provide for its continuity, if only for a brief period while it can be sold or transferred.  These steps should help business owners move through the process of creating a continuity plan:

  • Create a written Succession of Management plan that expresses your wishes regarding what should be done with your business over a period of time, until your eventual departure.
  • Name the person or persons who will take over the responsibility of operating your business.
  • Ensure your plan specifically states how the business transfer should be handled, whether continued, liquidated or sold.
  • Notify heirs of the resources available to handle the company’s sale, continuation or liquidation.
  • Meet with your banker to discuss the continuity plans you have made.  Showing them that the necessary funding is in place to implement your continuity plans will help the eventual transfer of ownership to proceed smoothly.
  • Work closely with a competent insurance professional to assure the amount of insurance purchased by the owner, the owner’s trust, or the business can cover the business continuity needs outlined in your plan.

Buy-Sell Agreement

For businesses with more than one owner, continuity planning can be achieved by creating a buy-sell agreement.  Such an agreement stipulates how the co-owner’s interest in the business is transferred and is often funded using life insurance or disability buyout insurance.  It can also be funded through an employee stock ownership plan (ESOP) by creating a privately held corporation.  It is important that you keep the buy-sell agreement updated to avoid creating additional problems with continuity.  There are several types of buy-sell agreements to consider:

Cross purchase: Another business partner agrees to purchase the business from the owner or the owner’s family.  All business owners generally purchase, own and are the beneficiary of an insurance policy insuring each of the other business owners.

Entity purchase: The business entity agrees to purchase the business from the owner or the owner’s family.  In this case, the insurance policy is usually owned by the business.

Wait-and-see: The buyer of the business is allowed to remain unspecified, and a plan is put in place to decide on a buyer at the time of a triggering event (e.g., retirement, disability, death).  The policy ownership and beneficiary structures vary, depending on the type of the agreement.

Deciding when to begin business continuity planning is complicated and likely depends on your health, family circumstances and overall business financial wellness. We suggest you seek the advice of a business planning professional to help you sort through your options.

This material has been provided for general informational purposes only and does not constitute either tax or legal advice.  Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax adviser or lawyer.   

President and Founder, Global Wealth Advisors

Kris Maksimovich, AIF®, CRPC®, CRC®, is president of Global Wealth Advisors in Lewisville, Texas. Since it was formed in 2008, GWA continues to expand with offices around the country. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Financial planning services offered through Global Wealth Advisors are separate and unrelated to Commonwealth.

Source: kiplinger.com

12 Ways Retirees Can Earn Passive Income

A senior black man uses a smartphone
wavebreakmedia / Shutterstock.com

These days, “retired” doesn’t always mean “not working.”

According to a study of U.S. retirees from the nonprofit Transamerica Center for Retirement Studies (TCRS), “nine percent … are currently working for pay, including five percent who are employed part-time, two percent who are employed full-time, and two percent who are self-employed.”

More than half — 56% — of those surveyed said their top reason to keep working was “wanting the income.” The good news: You might be able to make some extra dollars via passive income — money that comes in without you doing much work, or any work at all.

Passive income is often synonymous with a large upfront investment, such as buying rental properties or dividend-producing stocks. But the following passive-income strategies can bring in extra bucks without investing a bunch of money or time.

1. Rent out a room in your home

Got an empty nest? Someone may be willing to pay to roost there.

You can advertise your spare space on your own or list it on a vacation rental website such as:

Yes, it takes some work: You might have to keep the room tidy and wash a load of sheets and towels once the guests depart. But in some parts of the country, you can earn enough money in just a few days to cover a mortgage payment, as we detail in “Do This a Few Days Each Month and Watch Your Mortgage Disappear.”

If you’re the gregarious type, you can have fun talking up your town or even showing visitors around. If not, advertise it as a “Here’s your key, we won’t bother you” arrangement. Some people simply want an inexpensive place to sleep and don’t care about sitting around chatting with the host.

2. Rent out your vehicle or gear

Your spare bedroom is just one of many things you could rent to others to bring in extra money.

Use your imagination. Maybe you have a ladder, stroller, surfboard, bicycle, boat, camera equipment or a great selection of power tools.

Peer-to-peer rental sites like the following will help you find folks who occasionally need such things but don’t want to own them:

Whatever you’re renting, keep in mind that ordinary insurance might not cover the commercial use of your property. An insurance rider may cover some items, but you may need a separate policy, so consult your insurance agent.

3. Become a peer-to-peer lender

What is peer-to-peer lending? In short, P2P lending sites such as Prosper accept loan applications from borrowers. Investors like you can put some of your money toward loans to those borrowers. When loans get paid back, so do you — with interest.

Overall, P2P investments “can provide solid returns that are really hard to beat,” according to Clark.com, the website of financial guru Clark Howard.

As with any loan, however, there’s the possibility of default. You may not earn anything or may even lose money.

Sound too complicated? Maybe this simpler form of P2P is for you: Worthy sells 36-month bonds for $10 each. The money that comes in is loaned to U.S. businesses, with lenders who have purchased these bonds getting a 5% annual rate of interest on their investment.

To learn more about Worthy bonds, check out “How to Earn 80 Times More on Your Savings.”

4. Get rewards for credit card spending

If you’re going to shop with plastic, make sure you’re rewarded.

The form that the reward takes is up to you. Some people covet airline miles. Others take their rewards as cash or a credit against their monthly statement.

The number of rewards credit cards — and their pros and cons — can be a little dizzying. For an easy way to compare your options, stop by our Solutions Center and check out travel rewards cards or cash-back cards in the Money Talks News credit card search tool.

5. Use cash-back apps

An app called Ibotta lets you earn cash rebates on purchases from retailers, restaurants or movie theaters.

Or you can do your online shopping through cash-back portals like:

These websites enable you to earn cash back on purchases from thousands of online retailers. To learn more about them, check out “3 Websites That Pay You for Shopping.”

6. Sell your photos

Smartphones have made decent photography possible for just about anyone. The next time you capture a killer sunset or an adorable kid-and-dog situation, don’t keep the image to yourself. Apps like Foap — which is available for Android and Apple devices — will help you sell it.

You can do even better if you have a good digital SLR camera, a tripod and other equipment. Stock photo companies like Shutterstock and iStockphoto, which favor high-definition, high-quality images, are venues for selling photos on just about any subject you can find.

7. Write an e-book

It’s possible to bring in cash without a high-powered book contract, thanks to self-publishing platforms.

Amazon’s Kindle Direct Publishing, for example, allows you to write, upload and sell your words fairly easily. My two personal finance books are for sale on Kindle, and they provide a steady stream of passive income.

I also sell PDFs of the books through my personal website. I use a payment platform called E-junkie to handle payments and deliver the book downloads — and this brings me more money per book than Amazon does, even when I offer readers a discount.

If you’re fond of a particular fiction genre, write the kind of stuff you’d like to read. Nonfiction sells, too: cookbooks, travel guides, history, memoirs and how-tos are a few examples. Or maybe you have a specific skill to teach — job-hunting or food preservation or raising chinchillas.

Pro tip: Fiverr.com is a good marketplace through which to find freelancers to hire for help with formatting, design and cover art.

8. Create an online course

If you’ve got useful knowledge, why not monetize it? Sites like Teachable and Thinkific will help you build a course that could change someone’s life, either professionally or personally.

Note that online courses are not limited to computer-based topics. A quick search turns up classes on:

  • Cake-making
  • Watercolors
  • Digital scrapbooking
  • Drone cinematography
  • Free-diving
  • Blacksmithing
  • Yoga
  • Parenting
  • Novel writing
  • Job hunting
  • Building a pet-care business

And that’s just for starters. Like writing an e-book, creating a course will take some work. But again: Once it’s up, the work is done.

9. Join rewards programs

Rewards sites like Swagbucks reward you with points for activities such as searching the internet, watching short videos and taking surveys. You can cash in your points for gift cards or PayPal cash.

Maybe you didn’t retire to spend hours taking surveys. But if you’re going to search the internet anyway, why not use Swagbucks’ search engine and earn some points?

To learn more about Swagbucks, check out “6 Ways to Score Free Gift Cards and Cash in 1 Place.”

10. Wrap your car with advertising

Turn your vehicle into a rolling billboard with companies like Carvertise. They’ll pay you for the privilege of putting removable advertising decals for a business on your automobile.

Writer Kat Tretina describes the process at Student Loan Hero. You can expect to earn $100 to $400 a month, depending on how much and where you drive, she says. Requirements include having a good driving record and a vehicle that has its factory paint job.

Pro tip: Car-advertising scams make the rounds regularly. Tretina offers these tips to avoid being victimized:

  • Legitimate companies don’t charge an application fee, and they’ll have a customer service phone line that lets you talk with a real person.
  • The car-wrapping cost should be covered by the company.
  • Take a hard pass on any company that doesn’t ask questions about your driving record, auto insurance, driving routes and type of vehicle.

11. Create an app

Maybe yours is one of those minds that says, “There should be an easier way to do (whatever) — and I think I know what it is!” If so, creating an app could bring in extra income.

It could also bring in zero dollars. But nothing ventured, nothing gained, right?

For example, personal finance writer Jackie Beck — who cleared $147,000 of debt — used her expertise to create an app called “Pay Off Debt.”

Not a coder? App-builder services exist. The WikiHow.com article “How to Create a Mobile App” tells how to get started. It’s a time-consuming process. But that’s one of the beauties of retirement: You set your own hours.

12. Become a package ‘receiver’

OK, this idea is unproven — so far. But it’s a solution whose time has come. The boom in online shopping has been a boon for thieves who find it easy to swipe packages left outside front doors before the intended recipients get home from work.

You might be able to do your part to thwart those lowdown thieves by marketing yourself as a “professional package receiver.”

Try this: Put the word out — through friends, social media, places of worship — that you are available to accept deliveries. If a package is for someone in your neighborhood, you could watch the shipping company’s tracking info and be at the home to take the package in. Or you could specify that packages be shipped to Original Recipient, c/o Professional Package Receiver — that’s you.

Before asking a fee of, for example, $1 per package, ask the person who wants to hire you what it’s worth to them. You might be surprised by a response like, “I’ll give you $5.” Decide, too, whether you’ll be charging per package or per order, and whether you’ll set a weight limit, such as no packages over 30 pounds.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

How to Have a Baby Shower on a Budget

It’s an honor to be asked to throw a friend or family member a baby shower. But along with that honor, often comes a hefty price tag. Between the food, flowers, decor, and favors, the cost of these soirees can add up quickly.

Fortunately, you don’t need to spend a fortune to throw a fun and memorable celebration for soon-to-be parents and their loved ones. From scoring a cheap (or free) venue to DIYing the centerpieces, there are a number of ways to cut baby shower costs without looking like you cut any corners.

Tips for Throwing a Great Baby Shower on a Budget

These inexpensive baby shower ideas can help you throw a memorable celebration for a mom-to-be and help her become better financially prepared for a baby.

Coming up with a Baby Shower Budget

Before you begin the planning process, it can help to determine the total you can spend on the event and then create a budget. You may also want to find out if family members from either side are willing to chip in financially or by offering to help make something for the party. When setting up your baby shower budget, you’ll likely want to include: the venue, invitations, decorations, food and drinks, entertainment and/or games, prizes and party favors.

Finding a Free (or Low-Cost) Venue

A baby shower doesn’t have to be at a fancy restaurant, hotel, or banquet hall to be festive. It could take place at your, or someone else’s, home. If you’re hosting a baby shower in warm weather. You might consider having it outdoors, such as in your backyard. You could even host a more casual shower with an outdoor barbeque or even a poolside party.

Other low-cost locales options include: a nearby park, the clubhouse of your (or someone else’s) apartment complex, or the meeting room at someone’s place of business.

Limiting the Baby Shower Guest List

Generally, the more people you invite to the shower, the more money you will spend. To keep costs in check, you may want to consider limiting the invite list to the parent-to-be’s closest family and friends. A smaller group not only cuts down on costs, but can also help to create a more intimate gathering that allows the guest of honor to spend time with each guest. It can be a good idea, however, to run the invite list by the expectant mom to be sure that you don’t exclude any important people.

Going Digital With Invitations

You can save money on baby shower invitations by using a digital service, such as Evite, MyPunchbowl, or Paperless Post. These sites and apps typically allow you to choose from a range of free baby shower invitation templates or, for a small fee, upgrade to a more elaborate design. These sites also make it easy to keep track of responses. And, guests will likely appreciate the ability to RSVP with the click of a button. You may, however, want to send paper invites to older guests, particularly if they don’t use an email address often.

Ditching the Caterer

Feeding guests typically takes up the biggest portion of a baby shower budget. One way to help keep the cost of food down is to forgo the caterer and head to your local warehouse club (like Costco or Sam’s Club). You’ll likely be able to create a delicious spread of appetizers, finger foods, and desserts for a lot less than ordering trays from a catering company or restaurant.

Timing it Right

You can also cut down on food costs by not holding the shower right at lunch or dinner time. That way, guests won’t arrive expecting a full meal, and you’ll be able to serve a lighter menu that includes simple appetizers and snacks. A late-morning party can be particularly wallet-friendly–you might simply offer coffee, juice, fruit, and pastries. Or, you might opt for an afternoon tea and serve sweets and finger sandwiches.

Keeping the Cake Simple

A gourmet bakery cake can look beautiful, but it could easily bust your budget. According to CostHelper , an average bakery cake runs around $3 to $4 a slice. To cut costs without sacrificing on taste, you might consider ordering a cake at your local grocery store’s bakery or the bakery at a wholesale club, then having it personalized (which the store will often do free of charge).

DIYing Centerpieces

Fresh flowers look lovely, but they can get expensive if you order arrangements from a professional florist. Instead, you may want to head to your local farmers market, grocery store, or warehouse club to find flowers at reasonable prices that fit your color scheme, then make your own centerpieces. A simple way to get great results is to use flowers in the same color family (like shades of pink or all white). You can pick up vases at the dollar store, or go with Mason jars, which look trendy and can be used for other purposes after the shower is over.

Printing Decor and Games for Free

Instead of racking up a big bill at the party store, you may want to comb the web for free baby shower printables. You can likely find food signs, games (like baby shower bingo), decorations, and favor tags that you can simply print right from your computer.

Making Edible Favors

Sweets can make great baby shower favors, and you can easily bake them yourself without spending a lot. You may also find that there is a family member who would be delighted to take on this task. Edible favors can be as simple as iced sugar cookies (in your color scheme) or as elaborate as cake pops that look like baby rattles.

Considering a Virtual Baby Shower

If the guest of honor’s family and friends are spread out all over the country, having a virtual baby shower is one way to include everyone that’s important, and also keep costs down. You can set a celebratory mood by choosing a Zoom background that fits the theme of your shower, and also include a link so guests can download the background as well. Friends and family can watch the mom-to-be open gifts that were sent to her ahead of time. You can also organize games throughout the virtual baby shower and create a digital guest book that attendees can sign and share their words of wisdom for the expecting parents.

The Takeaway

You can plan a memorable baby shower even on a limited budget. And, spending less doesn’t mean the event will be any less special.

Some easy ways to trim the cost of having a baby shower include: hosting the shower in your home or backyard, heading to your local warehouse club (for food, flowers, and even the cake), using free printables for decor and games, and giving homemade sweets as favors.

You can also make a baby shower more affordable by setting a budget and saving up enough money to cover it in advance (so you don’t end up relying on credit cards).

Looking for a good place to build your party fund? A SoFi Money® cash management account can be a good option. With SoFi Money’s “vaults” feature, you can separate your savings from your spending while earning competitive interest on all of your money. You can even set up separate vaults for separate savings goals.

Start saving for your next milestone celebration with SoFi Money.

Photo credit: iStock/vejaa


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3 Ways to Listen to Free Music Online – Downloads, Streaming & Radio

Back in the day, there were only two ways to listen to recorded music. You could tune your radio to a local station and hear whatever song happened to be playing, or you could go down to the record store and buy a copy of your favorite songs on a vinyl disc.

Today, that sounds quaint. According to The Guardian, digital music downloads overtook sales of physical recordings on CD or vinyl way back in 2012. More recently, even digital downloads have lost ground to music streaming services. In 2020, streaming accounted for 85% of all the music industry’s revenues, according to the Recording Industry Association of America.

All this technology has made listening to music significantly cheaper. According to a 2017 Nielsen report (via Digital Trends), the average consumer spends only $156 on music each year. Savvy consumers know there are several ways they can get most of their digital music for free — leaving more money in their budgets to enjoy a live concert or two.

How to Listen to Music for Free Online

There are three primary ways to get your favorite music for free online. Which one you choose depends on what you’re looking for.

1. Streaming Music Online

Today, streaming services are indisputably the most popular way to listen to music. With a streaming music service, you don’t own the songs you play, but on the plus side, you’re not limited to the number of tracks you can fit on your phone or MP3 player.

Streaming services can take several forms. Some are subscription services that play music selected for you, some are more like radio stations, and some simply play tunes on demand. However, many online music sources blur the boundaries between these categories.

Internet Radio

Internet radio stations work the same way as old-school radio: They select songs, and you listen to whatever pops up. But instead of being limited to the few stations in range, you can choose from a vast list of specialized stations that suit particular musical tastes. Also, if you hear a song you really can’t stand, you can just skip it — something you can’t do over the airwaves.

Some services take this personalization to its logical extreme by creating custom radio stations to suit a user’s tastes. Instead of a live DJ choosing which tune to play next, algorithms select songs for you based on which artists and music you say you like.

Advertising funds the majority of Internet radio stations. But some let you upgrade to an ad-free experience for a small monthly fee. Choosing a paid version also lets you skip songs more frequently. Most online radio stations limit users of free accounts to six skips per hour.

There are multiple internet radio stations to choose from.

Pandora

Started in 2000, Pandora is one of the top streaming sites on the Internet. Its music-picking algorithm, known as the “Music Genome Project,” analyzes the songs you like best and then presents you with other songs that share similar qualities.

According to Digital Trends, Pandora’s music collection is pretty decent, with about 40 million tracks for its on-demand service. However, the main reason to listen is its “magic algorithms,” which do a fantastic job of picking out songs to match your tastes. You can listen on a range of devices, including computers, smartphones, TVs, and car audio systems.

Pandora’s basic service is free. However, you can pay to upgrade to ad-free listening with Pandora Plus for $4.99 per month. On-demand listening via Pandora Premium costs $9.99 per month for individuals, $14.99 for families with up to six members, $4.99 for students, and $7.99 for military members.

LiveXLive

Formerly known as Slacker Radio, this service relaunched as LiveXLive in 2017. The new name reflects its focus on providing live music streams. The service earns an Editors’ Choice designation from PCMag, which praises its “curated stations” hosted by experienced and informative DJs.

Along with its extensive music collection, LiveXLive offers live news from ABC and pop culture tales called “Slacker Stories.” It also hosts videos featuring music news, interviews with artists, and even live performances. It’s easy to use on multiple platforms, with apps for Android, iOS, Amazon Fire TV, Apple TV, and Roku.

A free account comes with 128 kilobits per second audio and the ability to skip up to six songs per hour — and plenty of ads. You can remove these limitations and upgrade your speed by upgrading to Plus ($3.99 per month). Going up to Premium ($9.99 per month) gives you access to on-demand and offline listening.

Last.Fm

At Last.fm, you create a custom profile that’s continuously updated with info about what artists and genres you’re listening to. The site uses this feature, which it calls “scrobbling,” to make personalized recommendations for new music. It also has a social media component, introducing you to other music lovers who share your tastes.

A basic subscription to the site is free. An ad-free version with extra features costs just $3 per month. You can listen to Last.fm on the Web or through its desktop and mobile apps. The apps can also track what music you listen to from other streaming music services and use that information to enhance your profile.

Jango

One of the newest players in the Internet radio field is Jango. Like Pandora, this service creates custom radio stations based on your musical tastes. You select your favorite artists, and Jango plays music from those artists and similar ones. You can fine-tune the playlist by rating songs you especially like or never want to hear again.

Jango also has hundreds of ready-made stations. Some are based on different genres, such as country, classical, or hip-hop. Others focus on more specific themes, such as today’s top 100 hits or Christmas songs.

You can listen to Jango over the Web or via an app for Android or iOS (iPhone, iPad, and iPod Touch). The service is 100% free and supported by ads. However, if you link Jango to your Facebook account, you will hear only one commercial per day. The mobile apps sometimes offer ad-free listening as well.

Subscription Services

A subscription streaming music service is like a library filled with songs users can check out but not keep permanently. Most subscription services make money by charging a fixed monthly rate in exchange for unlimited listening. But many also offer free accounts funded by advertising.

Amazon Music

There are two ways to listen to Amazon Music. If you have an Amazon Prime subscription, it comes with access to a limited catalog of 2 million songs. This basic, ad-supported service has thousands of stations and playlists, and you can listen offline with unlimited skips. You can also use Alexa, Amazon’s smart assistant, to control playback and discover new music.

If you want more music, you can upgrade to Amazon Music Unlimited. It gives you ad-free, on-demand access to 75 million songs in HD. Over 7 million songs are available in Ultra HD, and the service also includes access to exclusive Ultra HD remastered albums. Amazon Music Unlimited also gives you access to other audio, such as podcasts.

Your first 30 days of Amazon Music Online are free. After that, it costs $9.99 per month for Prime nonmembers or $7.99 per month if you have a Prime subscription.

Spotify

Named the best all-around music streaming service by Digital Trends, Spotify is by far the most popular on-demand streaming service in the world today. There are several ways to use it:

  • Discover new music through the site’s curated playlists.
  • Create playlists from Spotify’s collection of more than 50 million tracks.
  • Browse playlists created by others, including friends, performers, and celebrities.

All music on Spotify is free, but upgrading to a Spotify Premium subscription for $9.99 per month gives you several extra perks. You get better audio quality, ad-free playback, and the ability to save songs for offline listening. You can also play songs on demand in the mobile app, a feature that’s unavailable with a free subscription.

You can listen to Spotify over the Web or via its iOS and Android apps. It also runs on certain gaming consoles, smart speakers, and car audio systems.

YouTube Music

The free version of YouTube Music is like a cross between a radio station and an on-demand streaming service. It invites you to name some of your favorite artists and uses that information to recommend albums, curated playlists, and custom playlists for you.

But unlike most online radio stations, YouTube Music lets you move around these lists at will, skipping forward or backward. Ads are relatively infrequent, according to Gizmodo, and it’s possible to skip some of them. You can also search for specific artists, albums, and tracks by name, save your favorites to your library, and create playlists.

YouTube Music also has some extra features most music services don’t provide. For instance, you can switch back and forth between audio tracks and music videos with the tap of a button. The service can also search for a song based on its lyrics.

All this is available free over the Web and on Android and iOS. However, upgrading to YouTube Music Premium for $9.99 per month lets you listen ad-free and stream in the background while your device is off. If you subscribe to YouTube Premium for streaming video, you get access to YouTube Music Premium for free.

Deezer

Though it’s not as well known as other streaming services, Deezer is surprisingly full-featured. This service provides a blend of on-demand streaming, live radio, podcasts, videos, and exclusive content — all for free.

On the Web or your desktop, Deezer recommends playlists for you based on your favorite artists and genres. You can also search a library of 73 million for specific tracks to create your own playlists. Deezer also provides synchronized song lyrics. However, the free service is available only on desktops, mobile devices, and a few home devices. It also limits skips.

If you upgrade to Deezer Premium ($9.99 per month) or Deezer Family ($14.99 per month), you get ad-free streaming, an offline mode, and unlimited skips. You can also connect on up to three devices at once, including smart speakers, smart TVs, wearable devices, game consoles, and car audio systems. You can try Deezer Premium free for 90 days.

Free Trials

Some streaming music services don’t have free ad-sponsored versions, but they do offer free trials. These give you a chance to test the service and decide whether it’s worth coughing up the cash for a monthly subscription.

Apple Music

With a library of over 75 million songs, Apple Music is the ideal streaming service for anyone who relies on Apple devices. It’s the only service you can control with the Apple Watch or voice commands to Siri, Apple’s smart assistant. Windows users can also use Apple Music via iTunes on their computers, but it doesn’t work as smoothly, according to Digital Trends.

Apple Music allows you to store up to 100,000 songs in your personal streaming library. If you’re an iTunes user, you can find many of your songs already available in the streaming library when you first sign up. The service also includes Apple Music 1, a 24-hour radio service curated by noted DJs and musicians.

The free trial period is 90 days. But according to Insider, you can double this to six months by signing up through an account with Best Buy. After the trial, choose from three service tiers: student at $4.99 per month, individual at $9.99 per month, and family at $14.99 per month.

Tidal

Both PCMag and Digital Trends agree that Tidal, a streaming service owned by top rap artist Jay-Z, has top-notch audio quality. It also offers exclusive content for hardcore music fans, such as timed releases from top artists like Beyoncé, live streams, concerts, and backstage footage. It even provides early access to certain concert and sports tickets.

Tidal offers a library of over 70 million songs and 250,000 music videos. However, as Digital Trends notes, it’s not easy to discover new music, and the interface can be buggy. Also, Tidal doesn’t provide lyrics, unlike many other services. You can listen on computers, mobile devices, smart TVs and streaming devices, smart speakers, and car audio systems.

The free trial period lasts 30 days. After that, Tidal Premium is $9.99 per month for individuals and $14.99 per month for families. Tidal HiFi, with lossless-quality sound, is $19.99 per month for individuals and $29.99 per month for families. But there are discounted subscriptions available for students, military members, and first responders.

SoundCloud Go

This service is the streaming counterpart to SoundCloud’s music download service. Digital Trends calls SoundCloud Go the best way to discover new indie music thanks to its vast library of 120 million user-created tracks. Its higher-tier SoundCloud Go+ adds another 30 million tracks from major labels and ad-free listening.

The service has nearly 200 million active users each month, and tons of lesser-known artists upload their newest songs regularly. However, unlike many other services, it doesn’t use algorithms to help you find music, so it can take some work to search through all the content to find your new favorites.

The free trial period is seven days for SoundCloud Go and 30 days for SoundCloud Go+. If you like it, you can pay $4.99 per month for SoundCloud Go or $9.99 per month for SoundCloud Go+.

Free Streaming on Demand

Some sites don’t require a subscription to stream music — you just go to the site, pick a track, and listen. For instance, on YouTube, you can type in the name of just about any song and find a video version of it.

The artists or their labels post some of these. But some are amateur videos created by fans, and some have just the music accompanied by a blank screen or lyrics. For example, a search for the popular song “All About That Bass” by Meghan Trainor turned up Trainor’s official video, a live performance of a jazz cover version, and numerous fan-created videos and parodies.

YouTube is an excellent place to find that obscure song you heard years ago, even if you’re unsure of the title or the artist. Just type in the most memorable line from the song, and let YouTube’s search engine do its thing. Using this method, I tracked down two old novelty songs: “Put the Lime in the Coconut” by Harry Nilsson and “Right Said Fred” by Bernard Cribbins.


2. Free Music Downloads

In the age of the Internet, it’s very easy to download music illegally. However, if you prefer to stay on the right side of the law — and support your favorite artists and the music labels that support them — you need to dig a little deeper to find free music downloads that are also legal.

Amazon

In addition to its streaming service, Amazon has a massive catalog of digital music for download, including more than 5,000 free songs. Many of these are obscure tracks by relatively unknown artists. But there are also a few gems by better-known performers, such as the rock band Foo Fighters and the folk artist Carole King.

Finding free tracks on Amazon is a bit tricky since the site keeps trying to redirect you to Amazon Music. Your best bet is to search the Internet for “find free music downloads on Amazon” and follow the first non-sponsored link you find.

SoundCloud

The primary SoundCloud service is sort of like YouTube for recording artists. Any user can upload music to the site, making it available for other users to download or stream.

Not all the music on SoundCloud is free, but you can find free tracks by both major and lesser-known artists. You can search the site for specific artists or genres or just browse the selections of trending music. SoundCloud’s services are also available through mobile apps for iOS and Android.

SoundClick

Much like SoundCloud, SoundClick provides a place for independent artists to make their music available directly to listeners. Founded in 1997, this site now offers millions of tracks spanning a variety of genres. You can find hip-hop, electronic, rock, alternative, acoustic, country, jazz, and even classical.

You can stream unlimited tracks via SoundClick or download them in both MP3 and lossless format. As a subscriber, you get your own profile page and custom playlists. You can follow your favorite artists, connect with other users, and support artists through tips.

Free Music Archive

Created by independent freeform radio station WFMU in New Jersey and now owned by the Dutch music collective Tribe of Noise, the Free Music Archive is a collection of free legal music tracks submitted by users and partner curators. All music on the site appears under Creative Commons licenses, which let artists make their work available for various uses without surrendering their rights.

Digital Trends calls the archive “a veritable treasure trove of free content” you can search by title, artist, genre, and length. The site also hosts a wealth of podcasts and some live radio performances from big-name artists.

Jamendo

Another site that distributes free music under Creative Commons licenses is Jamendo. Around 40,000 artists from more than 150 countries have contributed more than 500,000 tracks, available for streaming or download, to the site.

According to Digital Trends, this site offers a streamlined user interface that makes it easy to browse and find new musicians. Even though most artists featured here aren’t well known, it’s easy to find the most popular tracks based on their user ratings, so you don’t have to sift through countless songs to find the good stuff.

If you need music for commercial purposes — for instance, in a video you want to distribute for profit — Jamendo offers a licensing service. For a monthly fee of $49, you get an unlimited number of tracks for commercial online use.

NoiseTrade

NoiseTrade is a project of the award-winning lifestyle magazine Paste. The “trade” in the name means artists give you their music on the site in exchange for your email address and postal code. It’s a win-win for users, who get free tracks or entire albums, and for artists, who get to build their fan bases.

Digital Trends describes this site’s interface as simple and clean. You can easily search tracks, browse recommendations, promote your favorite artists via social media, and send them tips with a credit card.

ReverbNation

Many well-known artists, including Imagine Dragons and Alabama Shakes, built their fan bases from scratch by sharing their music on ReverbNation. The site hosts over 3.5 million artists representing a mix of genres, like rock, R&B, indie, hip-hop, country, and folk. Its Discover feature can help you find up-and-coming artists in genres that interest you.

DatPiff

Hip-hop artists have long used mixtapes to spread their work. In that tradition, DatPiff offers access to a variety of new free music from both new rappers and mainstream artists like Drake and Future. According to Digital Trends, it’s the leading place to download new tapes, view release schedules, and listen to compilations created by fans.

Audiomack

A newer, up-and-coming player in the mixtape realm is Audiomack. It focuses on hip-hop, rap, and trap music from both newcomers and established artists like Kodak Black. Some artists on this site allow only online streaming of their songs, but there are still plenty of downloadable tracks.

CCTrax

Another genre-specific site is CCTrax. Although it hosts tunes from various genres, it has an unparalleled collection of electronic music, including dub, techno, house, downtempo, and ambient. Many of the singles and albums are licensed by Creative Commons and free for use in other works.

Musopen

Classical music lovers can find lots of free recordings, sheet music, and even textbooks at Musopen. Most classical music pieces are in the public domain, so it’s perfectly legal to distribute them for free. The site has a vast library of royalty-free recordings you can search by composer, performer, form, instrument, or period.

Live Music Archive

For live concert recordings, Live Music Archive is the place to go. The site is a collaboration between the Internet Archive, a nonprofit repository of digital media, and Etree.org, a community for sharing concert tapes. Recordings date back to 1959 and span a wide variety of genres, including rock, reggae, and jazz — and over 15,000 Grateful Dead shows.

According to Digital Trends, this site can be tricky to navigate. There’s no search function, but you can filter results by artist, title, or date. When you find what you want, you can stream it or download it in MP3 or FLAC (free lossless audio codec) form.


3. Broadcast Radio

Even in the brave new world of digital media, there’s still room for the old-fashioned kind. In fact, according to a 2019 Nielsen report, more Americans tune in each week to old-school radio — over the airwaves — than any other platform, including TV and all Internet-connected devices.

Far from killing off broadcast radio, the Internet has revitalized it. A couple of decades ago, you could only listen to your favorite radio station when you were in range of its antenna tower, which made it hard for smaller stations with less power to compete. Today, as long as you have an Internet connection, you can listen to any radio station that has a livestream.

For example, if I want to listen to my local NPR station, WNYC, I can just type “WNYC.org” into my web browser and click the Listen Live button. It’s a lot easier than fiddling with the radio knobs to hit the right frequency and allows you to listen to local radio, even when you’re traveling.

TuneIn

The Internet can help you discover new radio stations as well. At TuneIn, you can find and listen to Web streams from 100,000 radio stations around the world. Sports, news, podcasts, and talk radio are also available.

You can listen to any station on TuneIn with a free subscription. But your stream will include all the ads played on the radio station. With a premium subscription, which costs either $9.99 per month or $99.99 per year, you can listen to many stations ad-free and reduce the number of ads on others.

In addition to its website, TuneIn is available to download as an app for iOS or Android devices. You can also listen via car audio systems, smart speakers, game systems, smart TVs, streaming devices, and wearables.

iHeartRadio

Another site devoted to traditional radio is iHeartRadio. You don’t need a subscription to tune into radio stations or search for one by location. The site also gives you access to podcasts and playlists based on genres, decades, or moods.

With a free subscription to the site, you can build Pandora-style custom stations based on specific songs or artists you like. You also gain full access to IHeartRadio’s podcast collection as well as a custom library in which you can save your favorite stations, music, and podcasts.

For $4.99 per month, you can upgrade to a Plus subscription. It allows you to skip as many songs as you like, play songs and albums on demand, and save and replay songs you hear on the radio. With an All-Access subscription ($9.99 per month), you can also create unlimited playlists and download songs for offline listening.


Final Word

Despite all the Internet has to offer, digital music may never entirely take the place of physical recordings. There are even signs the old-fashioned record store is making a comeback. According to the Recording Industry Association of America, more than 40% of all profits for sales of physical recordings in 2018 came from vinyl LPs and EPs.

The world of modern music isn’t so much about digital versus analog, recorded music versus streaming, or custom radio versus curated stations. Rather, it’s all about choice. Music lovers today have more options than ever for listening to music exactly the way they want. And thanks to the Internet, they also have plenty of options for how much they spend on it.

Source: moneycrashers.com

17 Biggest Home Buying Mistakes & How to Avoid Them

Whether you’re a first-time homebuyer looking for a starter home or a seasoned homeowner ready to upgrade or downsize your property, the buying process is similar. From searching for the perfect place to call home to putting in an initial offer, it’s an exhilarating and life-changing adventure for new and experienced buyers alike.

And with such a major decision on the line, it’s important to make sure you don’t come to regret your decision in the future or miss out on your dream home by making a common — but avoidable — mistake.

17 Home Buying Mistakes to Avoid

Simple missteps like overestimating your DIY skills or making a lowball offer can put a damper on the excitement you feel during or following the home buying process. And they can cost you money, stress you out, and give you buyer’s remorse.

But, if you know what the most common mistakes are and you prepare in advance, you can bypass them — and the negative side effects they come with.

These are the most common home buying mistakes you should seek to avoid.

1. Not Reviewing Your Budget

Before you buy a home, you need to know what you can afford. This means taking a deep dive into your budget and reviewing your current costs and expenses, as well as estimating any new costs and expenses you’ll take on from owning a home.

For example, additional or increased costs may include:

  • Your monthly payment for rent or a mortgage
  • Property taxes
  • Homeowners insurance
  • Repairs and maintenance
  • Landscaping
  • Homeowners Association (HOA) or condo fees
  • Furniture
  • Utilities

You should also budget for a home emergency fund to cover potential problems like broken appliances or unexpected repair and maintenance costs.

If the estimated costs are too high, it might mean you have to rethink your budget by lowering your price range or reducing your homeowner expenses.

Knowing what you can afford beforehand ensures that you only look at houses within your budget and aren’t tempted to overspend.

2. Overlooking the Community

A house is one thing, but the community it’s in is another. Many homebuyers become excited about a particular property and fail to pay attention to the neighborhood or area it’s in. However, where a home is located can have a significant impact on your quality of life and overall happiness.

For example, pay attention to location-based factors such as:

  • The property’s proximity to an airport, dump, or train tracks
  • Whether it’s a family-oriented neighborhood
  • How close it is to amenities like public transportation, schools, and parks
  • How far it is from your place of work
  • Where necessities like grocery stores and gas stations are located

It’s also useful to look into future developments in the area, like commercial buildings, apartment complexes, and public spaces. If you’d prefer to live away from busy public areas, purchasing a property close to a future strip mall might not be a great option for you.

Or, if you want to be part of an up-and-coming area, planned developments give you a clear idea of what to expect in your neighborhood in the next few years, like new restaurants or off-leash dog parks.

Take some time to think about what you want to be close to or far from before you start your home search. Consider your interests and lifestyle to determine where your ideal property would be located, then use the information to ensure you wind up in a community that you feel good about.

3. Forgetting About Maintenance Costs

The great part about renting is that you don’t have to worry about the costs of homeownership like appliance repairs, building upkeep, or landscaping. But you do have to cover these expenses when you buy a new home.

As with forgetting to make a budget, forgetting to consider ongoing maintenance costs has the potential to wreak havoc on your finances. And avoiding maintenance and upkeep will only end up costing you more money in the long run because it will lead to larger repairs and more serious problems.

Homeowner maintenance includes a variety of recurring tasks, such as:

  • Mowing, trimming, and weeding
  • Snow removal
  • Applying paint and stain
  • Cleaning gutters
  • Pressure washing decks, patios, and siding
  • Chimney cleaning
  • Exterior window washing
  • Servicing your heating and cooling system

Depending on the home, it may also include tasks like replacing shingles, treating hardwood floors, or hiring an arborist to prune your trees.

When it comes to getting these jobs done, you can either take them on yourself or hire a professional to do them for you. However, both will cost you some combination of time and money.

Most home maintenance tasks require equipment. So if you plan to tackle them yourself, expect to cover the costs of equipment, like buying a lawnmower or a ladder or renting a pressure washer. And, if you hire a contractor to do your home maintenance for you, you’ll of course need to pay them.

Maintenance costs aren’t included in your mortgage loan, so you need to be able to cover them out of pocket. When reviewing properties, consider what kind of maintenance the property will need and whether you can afford it. Not only does it cost money, but it also takes a lot of time.

If a high-maintenance property isn’t a fit for your lifestyle or budget, look for something that requires less work, such as a newer home or lower-maintenance property like a condo.

4. Not Getting a Preapproval

One of the first steps you should take on your journey to homeownership is to get a mortgage preapproval. A preapproval is the amount a bank agrees to lend you based on factors like your savings, credit score, and debt-to-income ratio.

Having a preapproval tells you exactly how much a bank will allow you to borrow, giving you a maximum purchase price for your home.

Without being preapproved, you have no idea how much a mortgage lender is willing to give you or what your interest rate will be. This means you’ll be house shopping with no real budget in mind. You won’t even know if a bank will approve you at all, meaning you could be wasting your time even looking for a home in the first place.

Before you think about booking a showing or talking to a realtor, book an appointment with your bank or a mortgage broker. Find out exactly how much you have to work with so you can view homes within your price range and budget.

5. Only Looking at a Few Properties

Buying a home is a major undertaking, not just financially, but emotionally as well. Only looking at a handful of houses won’t give you a realistic picture of what’s on the market, what home prices are like, or whether something better is out there.

Book multiple showings to get a feel for your options. Even if you think you’ve found your dream home early on, there’s no guarantee you’ll get it. Keep your options open and check out a wide variety of properties to give yourself some perspective.

Who knows, you might find a hidden gem or dodge a bullet simply by taking your time and not limiting your options to a handful of properties.

6. Not Having a Real Estate Agent

When embarking on a home buying journey, you may be tempted to save yourself some money by opting to go without a buyer’s agent. But for most people, that’s a mistake. Unless you’re well-versed in real estate law and property negotiations, you should have a good real estate agent.

After all, their fees are typically covered in your mortgage as part of the closing costs of the home, meaning you don’t have to pay for them out of pocket.

But that’s not the only reason you should have a realtor when buying a property. A buyer’s agent provides many benefits, such as:

  • Networking with other realtors and property owners to find new and upcoming listings
  • Having access to property listing tools such as the MLS
  • Negotiating offers and conditions
  • Helping you to find a broker, lawyer, or other professional you may need
  • Handling important paperwork
  • Ensuring you’re aware of any important disclosures

An experienced buyer’s agent will work for you, helping you to find the perfect property not only for your lifestyle and budget but based on what’s available. They’ll take on the heavy lifting when it comes to paperwork, showings, and communicating with sellers and their agents, giving you a chance to focus on more important things.

7. Not Making a Wants vs. Needs List

Some people jump straight into viewing properties without evaluating their needs versus their wants. But it’s a common mistake that complicates the home buying process and causes decision paralysis. When buying a home, it’s essential to know what you need in your new home compared to what you would like it to have.

For example, if you have a dog, a yard could go on your needs list, while something like a pool or walk-in closet might go on your list of wants. If a lack of closet space would be a deal breaker for you, you might list the walk-in closet as a need for you instead.

You can give this list to your realtor, which will help them to filter through potential properties to show you. This saves both of you from wasting time viewing homes that won’t work for you.

And, it encourages you to get your priorities straight by forcing you to think about what you really need to be happy and fulfilled in your new home. Plus, knowing what you want gives you a better idea of your budget and which bonus features or upgrades you can afford.

If you don’t make a list, you could end up buying a property that isn’t a great match for your lifestyle.

8. Taking on Too Much Work

Fixer-uppers tend to be romanticized in reality TV shows about house flipping and interior design, but they’re a lot of work. Overestimating your DIY skills and taking on a house that’s going to require a significant amount of time and money to renovate or repair can quickly turn your motivation into buyer’s remorse.

On top of a mortgage payment, you’ll have to cover the costs of materials and labor for any upgrades or renovations that need to be done. If you’re handy, you can save money on labor, but you’ll still need tools, supplies, and a serious time commitment.

If you have to hire professional contractors to complete the work for you, expect costs to be relatively high depending on what you need done. If a home project goes over budget — which happens often — you don’t want to be left in a bad financial situation and an unfinished home.

Before moving ahead with a home purchase, consider how much work you’re willing to take on and how much of a renovation budget you can afford.

9. Buying in the Wrong Market

In real estate, there are two basic types of extreme markets: a buyer’s market and a seller’s market. In a buyer’s market, there are a variety of homes available for you to view and consider, meaning sellers are more likely to try to entice you with competitive prices and other incentives.

In a seller’s market, there aren’t many homes up for sale, so buyers have to compete against one another to win bidding wars. This often results in paying over the asking price, which increases monthly mortgage payments and possibly even your down payment.

The best time to buy a home is in a buyer’s market. Sometimes, waiting for a season or two to buy will save you a significant amount of money and keep you from the stress and uncertainty of buying in a seller’s market.

If you’re able to, buy when the market is in your favor and not working against you.

10. Feeling Uncertain

If you feel uncertain about a home, an offer, your real estate agent, or your financial situation, it’s not the right time for you to buy. Purchasing a house is one of the biggest financial commitments you’ll ever make, so you need to feel confident that you’re making the right choice for you, your budget, and your family.

If something feels off, carve out time to figure out what’s causing your uncertainty. It’s normal to feel nervous about taking on a home loan, especially if you’re a first-time homebuyer, but watch out for feelings of apprehension, uneasiness, or even dread.

Your home buying experience should be positive, so if your gut is telling you to reconsider, it might be best to take a step back and reevaluate.

That’s not to say you shouldn’t buy a home at all. It just means you need to change something about your situation, such as getting a new real estate agent, looking at more properties, or lowering your budget. Consider what will make you feel confident about buying a home and don’t move forward until you feel comfortable, positive, and satisfied.

11. Making a Lowball Offer

Making a lowball offer on a property is a rookie mistake that many seasoned and first-time homebuyers make. It offends home sellers, starting negotiations off on the wrong foot and sometimes even ending them altogether.

Sellers often spend a lot of time working with their real estate agents to price their homes based on the market, comparable homes in the neighborhood, and the state of the property. Just like you need to work within a budget for your home purchase, they need to make a certain amount of money from their home sale.

Lowball offers are rarely accepted and don’t provide much benefit to either party.

When making an offer on a home, listen to your real estate agent and offer a fair price. Being respectful and considering the true value of a home in your offers makes them more likely to be accepted.

12. Not Talking to a Broker

While a bank is often the first place you go to find out how much you can get approved for, they’re not your only option. A mortgage broker can provide you with a variety of different mortgage rates and terms from different lenders, allowing you to choose the best offer.

As with your bank, you’ll need to provide financial information like pay stubs, your credit score, and details about your assets and debts. The broker will use this information to shop around and find you the best interest rate and mortgage terms based on your financial situation.

Often, they can find you a better deal than what your bank is offering. However, make sure your broker has your best interests in mind. Don’t take out a mortgage with a disreputable or unestablished lender just to save some money.

A good broker can save you a lot in interest, so they’re worth talking to regardless of whether you choose to go with one of their offers.

13. Having a Small or Nonexistent Down Payment

There are a variety of different loans when it comes to buying a home, each with different down payment requirements:

  • VA home loans, which are for veterans and require as little as 0% down
  • Conventional loans, which are the most common for those with strong credit and no military service
  • FHA loans for borrowers with poor credit and low down payments

If you’re opting for a conventional loan, you’ll likely need to have a hefty down payment, especially if you want to avoid having to pay private mortgage insurance (PMI). Typically, you have to pay for PMI if you don’t have the minimum down payment required by a lender, and it’ll cost you anywhere from $50 to $200 per month.

Most lenders prefer to have at least 20% of the purchase price as a down payment. So, if you were buying a home for $350,000, you’d need to have $70,000 cash to put toward your mortgage.

Not planning for a sufficient down payment can put a huge damper on your home buying experience. It affects how much a lender will give you, your interest rate, and whether you have to pay PMI. Plus, it impacts your cash flow and the funds you have to put toward closing costs, renovations, and repairs.

Make sure you know how much you need in advance and plan ahead to avoid a disappointing and disheartening experience.

14. Going Without a Home Inspection

When you make an offer on a house, you have the option to make it dependent on a home inspection. Some lenders even make it a requirement of your mortgage terms. But if they don’t, or if you’re buying your property without a loan, you may choose to go without a home inspection.

But skipping a home inspection can cost you a lot of money and stress down the road.

Home inspectors are certified professionals who inspect a property’s condition. They review the structure, plumbing, electrical, exterior, and interior elements of the home and provide you with a report detailing any issues they find. For example, a home inspector would catch wiring that is not up to code or water damage in the basement.

These reports help you to avoid major repairs and give you an overview of the property’s condition. This can save you from buying a home that needs a new roof or that has a mold problem. Seeing as home inspections typically cost between $300 and $500, they’re often worth it.

Even if you choose to move ahead with a home purchase after you receive your inspection report, you can use it to renegotiate your offer based on any repairs that need to be made.

For example, if the report noted that the railing on the deck needs to be replaced, you could either request that the seller have it fixed or reduce your offer by how much it would cost a contractor to do.

15. Not Including the Right Conditions in an Offer

Your real estate agent will help you to figure out which conditions to put in your offer, but the most common include:

  • Home inspection
  • Financing
  • The sale of your current home
  • Closing date
  • Fixtures and appliances
  • Who pays which closing costs

You can also request an appraisal or survey, repairs, or specific cleaning tasks.

Conditions protect you so that you don’t commit to purchasing a house before you know you have financing and a home inspection in place. And they keep you from walking in on moving day only to find out the appliances weren’t included in your purchase price.

Base your conditions on the property you’re interested in and make sure they’re fair and within reason. Add too many unreasonable conditions to an offer and you risk getting rejected by a seller.

16. Not Seeing a House Yourself

Although video tours are OK, they don’t give you the full sensory experience of a home. You don’t pick up on any strange smells or noises, and you don’t truly get a feeling for the size or condition of the space or the neighborhood it’s in.

Even having a friend or family member view a home in your stead is a better option than going with video alone — especially if you won’t be able to visit yourself before you make an offer.

Ideally, though, you should visit and view a home yourself before you commit to buying it. If you happen to be buying a home in another state or country, try to plan a trip beforehand to look at houses. If you can’t do that, consider finding temporary housing to stay in after you arrive so you can search for a home in person.

If you don’t, you could end up buying a property you aren’t completely happy with or one that has unexpected issues.

17. Not Checking Your Credit Rating

Buying a house means having a solid grasp of your personal financial situation, including your credit score. Knowing your credit score keeps you from encountering any disappointing surprises when you talk to a bank or broker about getting preapproved for a mortgage.

Monitoring your credit score gives you a chance to improve it before you apply for a mortgage, increasing your chances of being approved and getting offered more competitive rates.

Check your credit score before you get too far into the home buying process to see what your rating is and whether you have any recent dings like late payments that may affect your interest rate or mortgage terms.


Final Word

Buying a house is meant to be an exciting and enjoyable experience. With such a major personal and financial commitment on the horizon, you want to do everything you can to avoid buyer’s remorse after you sign the dotted line.

Prepare yourself by getting your finances in order, having a clear idea of the kind of place you want to call home, and understanding the current market to have a happier, more successful home buying experience.

Source: moneycrashers.com

How Can I Correct Negative Credit Reporting From Fraud?

“John, I’ve been watching with interest the stories about Target’s data breach and how the information compromised has evolved from payment information to now include personal information. If someone uses my personal information, opens a new account in my name, and never makes payments how can I get that off my credit reports?”

This is a great question and very timely considering some fraudster is running around with payment and/or personal information belonging to at least 70,000,000 Target customers.

Thankfully the Fair Credit Reporting Act (hereafter “FCRA”) provides VERY aggressive consumer protections regarding identity theft protection and fraud.  And, every state has additional protections that

Federal Law

The FCRA has an entire section that addresses fraud and identity theft.  You have the right to the following at no cost:

One-call Fraud Alerts: You can place a fraud alert on your credit reports that will remain for 90 days.

You only have to contact one of the credit bureaus to place the alert and they have to “refer” the information to the other credit reporting agencies.

A fraud alert asks new creditors to verify that you are, in fact, the person applying for credit in your name and makes it illegal for them to extend credit in your name without your authorization.

Extended Fraud Alerts: You can extend the 90-day fraud alert to remain for 7 years. You’ll have to submit something called an “identity theft report” to the credit bureaus.

An identity theft report is any fraud affidavit or police report filed with a law enforcement agency.

This helps to separate the real victims of fraud from those who are crying fraud to get legitimate information removed from a credit report, as filing a false police report is a crime.

Placing the extended alert is another “one-call” action, as the credit bureau receiving your request has to share it with the others.

Correcting Credit Reports Containing Fraudulent Data: Despite the protections afforded under the FCRA, we all know that true name fraud happens.

And, it can result in derogatory account and collection information appearing on your credit reports.

That’s bad news because now it’s likely harming your credit scores and you’re receiving calls and letters from collection agencies.

If you have information on your credit reports that has been caused by fraud it’s not the end of the world because you have some fantastic protections under the FCRA.

Once you notify the credit bureaus that you have information on your reports caused by identify theft they have to block it from your credit reports, within 4 business days.

That’s 26 days sooner than they have to complete garden-variety credit disputes.

You’ve got to provide them with some paperwork, including the same type of identity theft report I explained above, but once it’s blocked, it’s gone.  Done and done!

State Law

Every state in the country has a law that allows victims of fraud to place a security freeze on their credit reports for free.

A security freeze (also called a “credit freeze”) prevents any new credit from being issued in your name.

The freeze essentially takes your credit reports out of circulation and no new lender can get access to it, or your credit scores.

And, no access to credit reports/scores means no underwriting of any type of loan.

Be aware, however, that while a security freeze locks any new lenders out of your credit reports and prevents true name credit fraud, it can also delay legitimate credit applications that you’ve submitted.

You’ll have to proactively “thaw” your credit reports and put them back into circulation prior to submitting credit applications or you too will not be able to open an account in your name.

In my mind this is little reason to not freeze your credit reports especially if you have already been a victim of credit fraud.

Experian has a very good explanation of security freezes, the pros and cons, and the process of placing a freeze all on their website here.

A final note, which is actually more of a warning…if you’ve read this and think you can use these procedures to have negative but accurate information removed from your credit reports under the guise of it being fraudulent, I’d suggest you think twice as you’d be committing fraud and might find yourself on the wrong side of a Federal indictment.

I’ve served as an expert witness in more than one of these cases.

John Ulzheimer is the Credit Expert at CreditSesame.com, and a credit blogger at SmartCredit.com, Mint.com, and the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. You can follow John on Twitter here.

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Source: mint.intuit.com

Recessions: 10 Facts You Must Know

It’s official. The Pandemic Recession that began in February 2020 ended in April of last year, according to the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), which is the arbiter of these things.

Although it was the shortest downturn in U.S. history, the economy is still recovering from the nearly 21 million jobs that were lost during the slump.

And it continues to haunt us in other ways. After all, a recession is the scariest creature in the average investor’s closet of anxieties. There’s little wonder why. People fear recessions because they can mean lower home prices, lower stock prices – and, of course, unemloyment.

Any number of things can cause, or exacerbate, a recession: an exogenous shock, such as the COVID-19 crisis or the Arab oil embargo of 1973; soaring interest rates; or ill-conceived legislation, such as the Smoot-Hawley Tariff Act of 1930.

Recessions are parts of the warp and woof of a dynamic economy, albeit unpleasant ones. And if you’re prepared for the next recession, there will be plenty of opportunities when that downturn ends. Thus, the more you know about recessions, the better. Here are 10 must-know facts about recessions.

1 of 10

Why Are They Called ‘Recessions’?

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Because calling them “depressions” is too scary. No, really.

After the Great Depression – a term once considered milder than “panic” or “crisis” – the term “depression” for an economic downturn seemed particularly terrifying. Economists began to use the term “recession” instead.

Currently, “depression” is used to mean an extremely sharp and intractable recession, but there is no formal definition of the term in economics. The Pandemic Recession included levels of unemployment not seen since before WWII. And the 2007-09 recession certainly had uncomfortable similarities to the Great Depression, in that it involved a financial crisis, extremely high unemployment, and falling prices for goods and services. Economists now call it the Great Recession.

2 of 10

What Constitutes an Official Recession?

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Someone has to be the official arbiter of recessions and recoveries, and the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) is that someone.

Although two quarters of consecutive GDP contraction is the standard shorthand for a recession, the NBER actually uses many indicators to determine the start and end of a recession.

In fact, GDP is not the committee’s favorite indicator: It prefers indicators of domestic production and employment instead. Other signs of recession include declines in real (inflation-adjusted) manufacturing and wholesale-retail trade sales and industrial production. Prolonged declines in production, employment, real income and other indicators also contribute to the NBER’s recession call.

In the case of the Pandemic Recession, NBER says: “The committee has determined that a trough in monthly economic activity occurred in the US economy in April 2020. The previous peak in economic activity occurred in February 2020. The recession lasted two months, which makes it the shortest US recession on record.”

3 of 10

How Long Do Recessions Typically Last?

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The average length of recessions going all the way back to 1857 is less than 17.5 months. Recessions actually have been shorter and less severe since the days of the Buchanan administration. The long-term average includes the 1873 recession – a kidney stone of a downturn that lasted 65 months. It also includes the Great Depression, which lasted 43 months.

If we look at the period since World War II, recessions have become less harsh, lasting an average of 11.1 months. In part, that’s because bank failures no longer mean that you lose your life savings, thanks to the Federal Deposit Insurance Corporation, and because the Federal Reserve has gotten (somewhat) better at managing the country’s money supply.

The longest post-WWII recession was the Great Recession, which began December 2007 and ended in June 2009, a total of 18 months. Conversely, the two-month Pandemic Recession helped nudge the average length of recession down a notch. 

4 of 10

How Often Do Recessions Happen?

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Again, since 1857, a recession has occurred, on average, about every three-and-a-quarter years. It used to be the government felt that letting recessions burn themselves out was the best solution for everyone concerned.

Since World War II, we’ve gone an average of 58.4 months between recessions, or nearly five years. The last economic expansion, starting at the end of the Great Recession, lasted 128 months. By that measure, we were overdue for an economic retraction when the Pandemic Recession hit.

5 of 10

When Was the Harshest Recession?

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The recession of 1873 was actually known as the Great Depression until the 1929 recession rolled in.

The recession started with a financial panic in 1873 with the failure of Jay Cooke & Company, a major bank. The event caused a chain reaction of bank failures across the country and the collapse of a bubble in railroad stocks. The New York Stock Exchange shut down for 10 days in response. The recession lasted until 1877.

6 of 10

What’s the Worst Effect of a Recession?

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An old economist joke is that a recession is when someone else loses their job, and a depression is when you lose your job. (Very few economists have transitioned to stand-up comedy.)

Your job is your main source of income, and that’s why it’s important to have a few months’ salary in cash as an emergency fund – especially since jobs are increasingly hard to come by in a recession.

7 of 10

When Is the Best Time to Buy Stocks in a Recession?

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Historically, the best time to buy stocks is when the NBER announces the start of a recession. It takes the bureau at least six months to determine if a recession has started; occasionally, it takes longer. The average post-WWII recession lasts 11.1 months. Often, by the time the bureau has figured out the start of the recession, it’s close to the end. Many times, investors anticipate the beginning of a recovery long before the NBER does, and stocks begin to rise around the time of the actual economic turnaround.

For instance, the Great Recession was officially announced on Dec. 1, 2008 – a full year after it had started. The recession ended in June 2009; the bear market ended three months earlier, on March 6, 2009. The ensuing bull market lasted more than a decade.

In the most recent case, the NBER called the end of the Pandemic Recession on July 19, 2021, or 15 months after it ended. Meanwhile, the S&P 500 gained 50% from April 30, 2020 to July 14, 2021.

8 of 10

What’s the Best Thing to Do With Your Money During a Recession?

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Pay off your credit card debt. Here’s why: Paying off a credit card that charges 18% interest is the rough equivalent of getting an 18% return on your investment, and you’re not going to get that from most other investments during a recession.

That said, bond prices typically rise in value during a recession – provided the recession isn’t sparked by rising interest rates.

9 of 10

What Is the Best Early Warning Sign of a Recession?

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More than the stock market, consumer confidence or the index of leading economic indicators, an inverted yield curve has been a solid predictor of economic downturns.

An inverted yield curve is when short-term government securities, such as the three-month Treasury bill, yield more than the 10-year Treasury bond. This indicates that bond traders expect weaker growth in the future. The U.S. curve has inverted before each recession in the past 50 years, with just one false signal.

This indicator worked for the Pandemic Recession too. The yield curve inverted multiple times in 2019 and early 2020. On March 3, the three-month T-bill yielded 1.13%, and the 10-year T-note yielded 1.1%. (To make matters a bit more complicated, some economists prefer using the two-year T-note yield instead of the three-month T-bill.) The index of leading economic indicators is a composite of 10 indicators – including the stock market and consumer confidence – and is useful for those who want a broader view of the economic picture.

10 of 10

Does the Federal Reserve Cause Recessions?

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Officially, the Fed never wants to start a recession, because part of its dual mandate is to keep the economy strong. Unfortunately, the other part of the Fed’s dual mandate is to keep inflation low. The main cure for soaring inflation is higher interest rates, which slows the economy. In 1981, the Fed hiked interest rates so high that three-month T-bills yielded more than 15%. Those rates put the brakes on the economy and ended inflation – at the price of a short but sharp recession.

Source: kiplinger.com

SoFi 2021 Mid-Year Outlook: The Calm After the Storm

As we close out the first half of 2021 and embark on the second, the best way I can characterize what I see coming is the calm after the storm. Don’t get me wrong: everyday will not be calm. But compared to what we’ve been through and the strength we’ve seen in the aftermath, I’m hopeful that the rest of this year will be marked with steady economic progress, careful transitions by policymakers, and markets that can adapt to a new environment.

Calm Waters

At the start of the year, when the COVID-19 vaccine was just rolling out, it was difficult for many investors to believe in a solid, sustainable, and robust recovery. Since then, not only have many economic indicators exceeded expectations, but they’ve exhibited historic strength.

For instance, two-thirds of the jobs lost during the economic shutdown, about 14.7 million, have been added back. The unemployment rate has fallen from a peak of almost 15% during the crisis down to 5.8%. The Federal Reserve estimates that unemployment will fall to 4.7% by the end of 2021. Although we’re dealing with a stubborn number of unfilled job openings, it’s encouraging and a relief to see businesses creating jobs and planning to add even more in the second half of the year.

Unemployment and Job Openings

Sources: Clearnomics, Bureau of Labor Statistics

There is further evidence that business activity in many sectors has accelerated. The ISM Manufacturing Index is at its highest level since the early 1980s. Air travel has come back strongly as leisure travel saw a burst of activity and business travel has slowly resumed. Restaurant dining is going through a revival across the country as restrictions are fully lifted. Companies in all sectors, large and small, appear to be roaring back.

All told, US GDP is expected to have returned to its pre-pandemic level in the second quarter, which is six months ahead of the timeline we originally thought. The pent-up demand came out strong as consumers started spending on goods and services that were restricted for so long. The result has been undoubtedly positive for economic activity, but the swift rise in demand put a strain on supply chains and drove higher inflation readings, which I’ll cover in a later section.

I expect the positive economic momentum to continue through the second half of the year and into 2022. However, the year-over-year comparisons will become more difficult as the crisis periods fall further into the rearview. In order to maintain forward momentum in markets, the economy and businesses will need to generate new organic growth.

Rising Market Tides

Financial markets have been resilient during the first half of the year despite concerns such as rising rates and elevated valuations. And although broad stock indices have posted double-digit gains YTD, they feel hard-won when compared to last year’s impressive burst off the market bottom.

Surprisingly, the largest peak-to-trough decline this year has only been 4%, which is far less than the 30-year annual average peak-to-trough decline of 14.2%. While the market stumbled a time or two, it bounced back quickly to reach new highs. In fact, at the time of this writing the S&P 500 has posted 32 new all-time highs in 2021 alone.

Risk appetite continues to persevere, as demonstrated by the demand for a wide range of assets including technology stocks, cyclical sectors, small-caps, cryptocurrencies, SPACs, IPOs, and NFTs-to name a few. Tides are turning under the surface as market leadership has broadened out and rotated among sectors and styles (i.e., growth and value). While tech reigned supreme last year, cyclical sectors such as energy, industrials, real estate, materials, and financials have benefited from increased economic activity and the expectation of stronger growth ahead.

Investors remain resilient even as broad market valuations hover near record highs. The forward 12-month price-to-earnings (P/E) ratio is around 21x, compared to a 10-year average of 16.3x. The Shiller cyclically adjusted P/E ratio, at 37x, is also at its highest point in 20 years.

While some have compared the current market valuations to the dot com bubble, a key difference in this cycle is that corporate earnings are recovering just as rapidly as the economy. If all goes well in second quarter earnings season, S&P 500 earnings-per-share will exceed pre-pandemic levels. As earnings rise, valuation measures such as P/E ratios should naturally compress and start to look more reasonable. Sometimes bubbles can slowly deflate rather than burst.

S&P 500 Earnings Per Share

Sources: Clearnomics, Refinitiv

Which Direction to Steer the Ship

Markets are a forward looking indicator, meaning they trade on expectations more than events, and expectations have been moving higher for some time. While I expect economic growth to come in strong for the rest of the year, I worry that high expectations have already been reflected in the market and it will take a lot to impress investors in the second half. Measures such as Citi’s Economic Surprise Index have plummeted as lofty expectations actually came to fruition and were no longer a huge positive “surprise”. This could make it difficult for markets to find solid direction as we move through the rest of summer and await the Federal Reserve’s message in fall.

I am optimistic that markets can produce positive results in the second half as we transition away from perpetual policy support and back to focusing on the strength of company fundamentals (such as the quality of its financial statements, competitive position, valuation, and future growth potential).

Part of that fundamental story revolves around the forward progress in earnings. I believe the strong earnings momentum in large-cap cyclical sectors (energy, industrials, and materials) offers attractive opportunities through the end of the year. I also think industry groups such as travel and entertainment can continue to benefit from increased activity both here and abroad. This is not to suggest that sectors not mentioned above (such as technology or communications) are poised to post negative results, but simply that in this phase of the recovery, I view the opportunity set as having broadened out considerably to include more of the value-oriented sectors. Lastly on the domestic front, there is strong earnings momentum in small-cap stocks that bodes well for their leadership carrying forward through the third and fourth quarters.

While US stocks have done well this year, it’s important to note that the recovery is a global story and international markets may not be far behind. Regions like Europe may soon play catch-up as they recover from lockdowns and international travel resumes. Furthermore, the European Central Bank recently raised its growth and inflation forecasts, and key interest rates such as the German 10-year Bund have risen, possibly indicating stronger investor risk appetite.

Choppy Crypto Waters

As a newer asset class, some cryptocurrencies have garnered significant attention from individual and institutional investors alike, particularly due to their returns over the last year. Likewise, the swift and dramatic swings in price of those coins have also been a hot topic. As the US Dollar faces downward pressure from inflation expectations and large budget and current account deficits, interest in crypto assets is likely to remain strong. However, investors must keep in mind the potential volatility that comes along with them and ensure their risk tolerance can cope with the twists and turns.

Bitcoin and the Stock Market

Sources: Clearnomics, Bloomberg

Inflation Simmer Reaching a Boil?

Perhaps the biggest point of contention among investors this year has been the surge in inflation. After being subdued for decades, many are wrestling with the idea of higher prices and what they could mean for consumers and markets alike. The jury is also still out on whether these high inflation numbers are here to stay or will be “transitory,” as the Federal Reserve expects. So far, rising prices have been the result of three forces.

Consumer Price Index

Sources: Clearnomics, Bureau of Labor Statistics

First, as pent-up demand was released back into the economy, prices of goods and services moved quickly upward and reflected the surge in activity. But when we measure inflation, we do it on a year-over-year basis, meaning the increase in prices for Spring 2021 is compared to the depressed prices from Spring 2020, which exaggerates the data and makes them seem quite large. This is referred to as “base effect”-comparing current readings to an unusually low base.

Second, supply and demand disruptions have caused price pressures in various areas. For example, supply-chain issues that resulted from factory shutdowns have limited the availability of semiconductors, which in turn affects the prices and availability of everything from consumer electronics to cars. Another example is the mass migration to the suburbs that occurred and pushed up the prices of new and existing homes and drove strong demand in home furnishings—all of which have contributed to inflationary pressures. As economic activity picks up around the globe, commodity prices are surging as well, pushing up the costs of many consumer goods.

The first two factors – base effects and supply and demand – could very well end up being transitory as the simple passage of time may iron out the wrinkles. That said, it’s the third factor that could drive longer-term inflation: fiscal and monetary stimulus. So far, over $5 trillion has been spent or proposed on a variety of pandemic and economic stimulus measures. The Fed also continues to buy $120 billion of bonds per month, increasing its balance sheet and pumping liquidity into the system. Although there seems to be some discussion about tapering those purchases, it’s still only in the conversation phase.

Turning the Titanic

In addition to supporting maximum employment, managing inflation is a central mandate of the Federal Reserve. And just like investors, this is a problem that the Fed has not had to deal with in decades. So much so that the Fed changed its approach last year to target an average inflation rate over a longer period, rather than put too much weight on any one reading.

At the moment, Fed officials have indicated that they are happy to wait and see, although we did get a sliver of appetite for moving the rate hike cycle forward in the last meeting. I expect the Fed to be extremely cautious in making changes to its policy and to be even more cautious in how they signal their intentions to investors. Of course, this won’t stop markets from scrutinizing the Fed’s every word, but it does give us a better chance at avoiding another “taper tantrum” like the one we saw in 2013.

Federal Reserve Balance Sheet

Sources: Clearnomics, Federal Reserve

As it stands today, market expectations and Fed guidance indicate a tapering of bond purchases beginning in 2022 and a rate hike (or two) in 2023. The exact timing is uncertain and with each new release of the dot plot, I expect the chances of a sooner rate hike to increase. Specifically, if economic data, particularly labor market data, continue to show strength, I believe a rate hike would be likely in 2022.

Although that could put pressure on high growth stocks and cause wobbles in the market if and when the Fed’s narrative changes, the reality is that most investors should neither fight the Fed nor fear the Fed. If tapering and tightening begin for the right reasons–i.e., because the economy is strong and inflation is persistent–financial assets can still perform well. It’s about the speed and method of changing policy, not the change itself. Markets have risen during rate hiking cycles in the past, and they can again. I view the prospect of tighter policy as a change investors will need to digest, but one that indicates our economy is on the right path.

Conclusion

Returning to normal rarely means returning to the exact same normal. Even as the economy recovers and bounces back, it will be different than it was before. There will be different drivers of growth, new policies for markets to navigate, and transitions for businesses to make. That said, I am optimistic about the resilience of the US economy and hopeful that markets can enjoy a pleasantly calm second half.

Photo credit: iStock/atakan


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Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

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This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.

Source: sofi.com

19 Black-Owned Banks and How to Support Them | The Simple Dollar

Banking Black isn’t a new concept, but it’s gaining momentum amid the rise of the Black Lives Matter movement. But what does it mean to bank Black? According to the Urban Institute, a Black financial institution provides services to minority communities and is 51% or more Black-owned.

Black financial institutions have been around for centuries, with initial meetings among African Americans interested in establishing their own banks held as far back as 1851 — before the Civil War. However, the first Black-owned bank in the U.S. didn’t materialize until after the war, in 1888. 

The first Black-owned banks enabled African Americans to accumulate enough capital to start other service-oriented businesses like nursing homes, catering businesses and insurance companies. And they provided an opportunity for African Americans to learn accounting skills and other techniques required for handling large volumes of cash. 

Today, there are roughly 19 Black-owned banks in the U.S. offering the same services as other financial institutions, such as certificates of deposits, loans, online and mobile banking assistance and more. This number used to be much higher — in 2001, there were 48 Black-owned banks — but, as with other community banks, the numbers have dwindled over the years partially due to regulatory restrictions that often favor larger financial institutions. 

As we celebrate Black History Month, we celebrate the Black-owned financial institutions that have served as pillars in the community for years now.

In this article

Why you should consider banking Black

It’s no secret there’s a wealth gap between minority and non-minority households. As of 2016, the median wealth for a White family was $171,000 compared to $17,600 for a Black family. 

This is partly attributed to a lack of financial services in minority communities. Without financial inclusion, minorities can’t affordably save, invest and insure themselves, which is required to grow and sustain wealth. This lack of experience also places them at a disadvantage. 

“I believe it is vital that African Americans make financial literacy a priority in 2020 and beyond, especially because of the effects of the coronavirus. Over 67% of Americans cannot pass a basic financial literacy test. African Americans, on average, can only answer less than 40% of financial literacy questions correctly. According to research, African Americans have the lowest levels of financial literacy,” states Dr. JeFreda R. Brown, personal finance consultant, educator and CEO of Provision Financial Education.

Because of financial exclusion, minorities often resort to expensive financial services, such as check cashing stores and pay-day lenders, because there are fewer banks in their neighborhoods. There are roughly 41 financial institutions per 100,000 people in a White community compared to only 27 in non-White majority communities. And the financial institutions present in minority neighborhoods often make it difficult to open and maintain an account. For example, a bank may require higher account balances to eliminate service charges or a larger minimum account balance. According to one study, the average minimum account balance at banks in Black neighborhoods is $871, compared to $626 in White communities. 

Because of this, nearly half of Black households are either underbanked or lacking access to such institutions. 

“Earning money is not a problem for African Americans,” says Dr. JeFreda R. Brown. “However, there is a large gap for African Americans when it comes to personal finance education, understanding how money works, understanding economics and economic indicators, understanding time value of money and understanding wealth building.”

Many Black-owned banks aim to combat the wealth disparity gap through:

  • community development lending
  • supporting minority businesses and nonprofits
  • offering financial literacy workshops for community members
  • providing financial aid to underserved Black communities

“I think banking with Black-owned banks is good because many of them give people a second chance who can’t get bank accounts with other banks,” says Dr. JeFreda R. Brown. “Also, Black-owned banks offer the same services as other banks and credit unions.”

In 2016, there was a rise in support for Black-owned businesses following the Black Lives Matter movement. One initiative was the Black Money Matters movement, headed by rapper Michael “Killer Mike” Render. He made a call for action in July 2016 during a town hall meeting televised by BET, asking Blacks to “bank Black.” It was an effective yet short-lived effort that led to 8,000 new accounts at Atlanta’s Black-owned Citizens Trust Bank. In addition, One United Bank reported receiving $3 million in deposits at branches across the country, and Carver Bank witnessed $2.4 million in deposits thanks to the movement.

There is also the Bank Black Challenge, which was launched by One United Bank, that is challenging one million people to open a $100 savings account at a Black-owned bank to generate $100 million of economic power. This challenge started in 2016 and is still ongoing today. 

Initiatives like these are significant, but it requires ongoing support to make their effects long-lasting. In 2020, the current Black Lives Matter (BLM) movement is motivating people to support the Black community in new ways. And by banking with Black financial institutions, you can now play your part in reinvesting in the Black community in the U.S. 

“Black-owned banks should be given a chance to grow and be a strong financial staple in the communities they serve. Also, Black-owned banks are a great option for anyone because they promote economic revitalization. Banking with Black-owned banks helps increase community development and economic development. This is why they need support from everyone,” states Dr. JeFreda R Brown. 

Black-owned banks and credit unions

If you’re considering banking with a Black financial institution, check out this list of Black-owned banks and credit unions in the U.S. If you don’t see a bank listed in your area, keep in mind you may still be able to use the bank’s digital banking services.

  1. Alamerica Bank – located in Birmingham, Ala.
  2. Citizens Trust Bank – located in 15 cities across the U.S.
  3. Columbia Savings and Loan – located in Milwaukee, Wyo.
  4. Commonwealth National Bank – has two locations in Mobile, Ala.
  5. Broadway Federal Bank FSB – two locations in Los Angeles, Calif. and one in Inglewood, Calif. 
  6. Carver State Bank – two locations in Savannah, Ga.
  7. Carver Federal Savings Bank – located in three cities in N.Y.
  8. Columbia Savings & Loan ASSN – located in Milwaukee, Wyo.
  9. GN Bank – located in Chicago, Ill.
  10. First Independence Bank – located in two cities in Mich.
  11. Harbor Bank of Maryland – located in three cities in Md.
  12. Liberty Bank & Trust CO – located in 10 cities across the U.S. 
  13. Industrial Bank NA – has multiple locations in N.Y., Md. and N.J.
  14. OneUnited Bank – located in three cities across the U.S.
  15. Optus Bank – located in Columbia, S.C.
  16. Mechanics & Farmers Bank – located in five cities in the Carolinas
  17. Tri-State Bank of Memphis – located in Memphis, Tenn.
  18. Unity National Bank – located in three cities in Texas and Ga.
  19. United Bank of Philadelphia – located in Philadelphia, Pa. 

Considering making the switch?

Black-owned financial institutions are struggling. In 2013, 60% of Black banks lost money, and they were especially hit hard by the 2008 recession. As we enter yet another economic downturn, now is a great time to invest in Black banks. In doing so, you can help keep these entities afloat so that minority communities can continue working to close the disparity gap. 

Together, Black banks control $5 billion in assets, which is a fraction of what the banking giants have (for example, Wells Fargo has $1.7 trillion in assets alone). It’s up to the people to help grow Black financial institutions in the U.S. If you’d like to make a difference, then follow these simple steps to switch to a Black-owned bank. 

Step 1: Identify your banking needs

Are you currently banking with another bank? What do you like and dislike about it? Keep this in mind as you’re shopping for a new, Black-owned bank.

Maybe you like the mobile banking options your current bank offers but hate the high monthly fees. Or perhaps you want to do your banking with an institution that has more involvement in minority communities. 

Make a list of your must-haves to help you decide on the best Black banking solution for your needs. 

Step 2: Choose a new banking institution

After you’ve identified your list of banking needs, it’s time to search for a Black-owned financial institution that meets those requirements. Use the list of Black-owned banks and credit unions above to start your search. Create a list of options and mark off the ones that don’t make the cut. 

Step 3: Take note of your automatic payments and deposits

Do you use automatic withdrawals for your billing? How about direct deposits from your employers (or clients)? If so, you’ll need to make a list of these automatic transactions so you can set them up with your new bank.

Step 4: Open up your new account

Once you’ve found a bank that meets your needs, it’s time to create your new account. Go through the application process and schedule to make a deposit (if required). Also, check with your new bank to determine what process they have to make  transferring funds from your old bank easier. Once your account is up and running, don’t forget to schedule your automatic payments and deposits.

Looking ahead

Deciding to bank Black isn’t just about choosing where you keep your money. It’s a way to take a stand against inequality in minority communities that lack financial inclusion. And it helps push the Black Lives Matter movement forward. 

In 2012, Wells Fargo was sued for pushing Blacks toward more expensive mortgages with higher fees and rates (compared to white borrowers with similar credit). Then in March 2018, Bank of America was fined for racial discrimination in its hiring and lending practices. 

Unfortunately, this is an ongoing issue for people of color who receive less than 1% of mortgages from white-owned banks.

Banking Black isn’t a choice only available to African Americans, either. It’s a viable option for anyone who wants to make a difference in their financial prosperity, as well as the prosperity of those in underserved communities.

We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

Cost of Living in Thailand – How Much for Rent, Food & Entertainment

How would you like to live in a tropical paradise where a restaurant meal costs $2, a taxi ride costs $3, and a furnished apartment rents for as little as $200 per month?

For decades, the low cost of living in Thailand has made it one of the most popular destinations for anyone looking to live in a tropical climate on a budget. And while prices in this sunny “Land of Smiles” have inched up over the years, you can still live on a fraction of what you’d spend for a similar lifestyle in your home country.

But just how cheap is Thailand in 2021?

How Much Does It Cost to Live in Thailand?

Each of Thailand’s regions offers something unique to travelers and expats. From beach towns to bustling cities and cultural centers to sleepy hideaways, Thailand accommodates every lifestyle — at least as long as you like sunshine.

The overall cost of living in Thailand varies by region. But some expenses, such as cellphone bills, taxes, and visa fees, remain constant, no matter where you choose to live.

Your standard of living has the most significant impact on your cost to live in Thailand. You can choose a life of luxury for a sliver of what it costs in the United States or Europe. But if you’re willing to live like a local with a simple lifestyle, you can stretch money even further.

When comparing prices in a foreign currency, your purchasing power fluctuates with the exchange rate. Since 2018, the exchange rate has held steady in Thailand, ranging from 30 to 33 Thai baht (THB) per $1 U.S.

With the exchange rate in mind, you can compare the cost of living between your current location and Thailand. To make the comparison easier, the prices herein are converted to U.S. dollars.

Average cost-of-living figures come from Numbeo, a crowd-sourced cost-of-living database. After living in Thailand for five months, I found these averages are a good starting point, but they don’t always accurately depict how affordable each destination can be.

Since the crowd-sourced data comes primarily from expats, costs are higher than what you’d spend living like a local.

In addition to Numbeo averages, all other pricing data comes from real properties for rent on Facebook Marketplace and Airbnb.

Rent

Your expenses partially depend on how you find your rental. While accommodation-hunting on Airbnb and other booking websites is convenient, that convenience comes at a price. To find the cheapest rates, search on Facebook Marketplace or (better yet) on the ground — but don’t expect everyone to speak English.

The cost of rent in Thailand also varies dramatically from city to city — even neighborhood to neighborhood.

Bangkok and the Suburbs

As the capital and center of economic activity, Bangkok is naturally the most expensive part of the country.

Luxury apartments on Airbnb can cost more than $3,500 per month in the most desirable parts of Phrom Phong, Silom, Lumpini, and Sukhumvit, all of which make up Thailand’s financial and retail center. Penthouse apartments complete with housekeeping, a private swimming pool, and panoramic views of the big city can run $6,000 per month or more.

But there are plenty of more affordable options.

Tourists and backpackers generally rent rooms on Khaosan Road, where a decent hotel room costs $10 to $25 per night. If you’re on a shoestring budget, shared dormitories in hostels go for as little as $2 per night. Discounts for monthly rentals are also available.

In Bangkok, the average one-bedroom apartment in the city center goes for $580 per month but only costs $290 outside the city center.

One factor that influences price is the proximity to the nearest subway station. The closer it is to the subway (MRT) or Skytrain (BTS), the higher the price.

Public transport is now starting to expand into the suburbs, which can offer the best of both worlds: low rental prices with easy access to the city.

For example, the furnished studio we rented in a luxurious condominium right next to a BTS station in the suburbs costs $460 per month on Airbnb. We could have negotiated an even lower price by paying an owner directly, taking an unfurnished unit, or signing a longer contract.

It had everything we needed built into the complex, including a restaurant, mini-store, gym, infinity pool, and workspace. Since we had everything on-site, we rarely had to leave, which saved us transportation costs.

If you prefer to rent a house, you have to venture outside the city center. Neighboring Nonthaburi and Samut Prakan are technically independent cities but are really more like exurbs of Bangkok. Detached single-family houses in these regions cost as little as $200 per month.

Beach Towns Near Bangkok (Pattaya and Rayong)

A couple of hours southeast of Bangkok, the beach towns of Pattaya and Jomtien have seen aggressive growth in recent years as real estate investors continue to build high-rise condominiums in these once-sleepy fishing towns.

In fact, the 2019 Global Destination Cities Index ranked Pattaya the 15th most overnight tourist-visited city in the world. Many of those tourists have fallen in love with the sunny, relaxed lifestyle and now call Pattaya home.

Despite their popularity, the cost of living in these regions remains surprisingly low.

Pattaya is the most expensive. Its nightlife is a big draw for expats. But even there, you can find one-bedroom apartments just off the beach for less than $500 per month. And the farther you go inland, the lower the prices get.

Rayong is even cheaper, with plenty of furnished studios going for less than $200.

Chiang Mai and Chiang Rai

Chiang Mai is a small town in Northern Thailand near the border of Burma and Laos. Considered by many to be the “digital nomad capital of the world,” Chiang Mai is a hotspot for young backpackers with a thriving expat community. Its popularity is primarily due to a low cost of living, beautiful temples, and foreigner-friendly cafes, nightclubs, and hangouts.

The average rent in Chiang Mai is $430 inside the city center and $300 outside the center. That said, when I went apartment-hunting in Chiang Mai, I found prices to be even cheaper.

In the Nimmanhemin (or “Nimman”) neighborhood, prices have exploded over the past decade due to the influx of digital nomads. We walked around door-to-door asking for rates and couldn’t find any decent studio apartments under $400. But outside touristy areas, it’s not unheard of to score a furnished studio for under $125.

A less popular option is the neighboring town of Chiang Rai, home to three of the most awe-inspiring temples in Thailand. Since it’s a bit more under the radar, it can be even cheaper than Chiang Mai.

The average rent for a midrange one-bedroom apartment in the Chiang Rai city center is $240, with comparable apartments outside the city going for half that. Northeast Chiang Rai is also close to the Burmese border, which is convenient for border runs when you have to renew your visa.

In Chiang Mai, Chiang Rai, or any other touristy town in Northern Thailand, prices fluctuate with the season. During “burning season” — when farmers burn their crops and pollution levels rise — rental costs plummet as foreigners flee in search of cleaner air.

Southern Beaches and Islands (Phuket, Krabi, Songkhla)

The stunning beaches surrounding Phuket and Krabi have surged in cost over the past 20 years as luxurious resorts slowly replace cheap backpacker bungalows.

The average one-bedroom apartment goes for $470 in Krabi, with similar prices in Phuket. There are also still deals on popular islands like Koh Lanta, where you can find simple one-bedroom Airbnbs for as little as $230.

That said, rents vary radically depending on the unit’s proximity to the beach, with luxurious beachfront villas fetching upward of $2,000 per month.

In Songkhla, a less popular resort town near the southern Malaysian border, you can still find bare-bones apartments on Facebook Marketplace for as little as $100 per month. You won’t be living in luxury, but you can’t go wrong for $100, especially if you spend all your time at the beach anyway.

Gulf of Thailand (Koh Samui, Koh Pha Ngan, Koh Tao)

The Gulf of Thailand is home to three of the country’s most popular islands — Koh Samui, Koh Pha Ngan, and Koh Tao. Each island has a unique vibe. And while prices have risen over the past decade, you can still find some steals.

Koh Samui is the largest and most developed of the three islands, with the average one-bedroom apartment rent ranging from $270 to $390 per month. It’s full of resorts and known as a family vacation destination, but plenty of expats also call the island home.

Koh Pha Ngan is home to the infamous Full Moon Party, an enormous beach festival held on the southwest corner of the island every month. But Koh Pha Ngan is more than just parties.

The island’s west side offers laid-back beach towns with expat communities dedicated to yoga, mindfulness, and spirituality.

It’s hard to find anything under $200 per month in Koh Pha Ngan, which would get you a rustic bungalow. For a modern furnished apartment with air conditioning and a beach view, expect to pay upward of $1,000 monthly.

Koh Tao is the smallest and least developed of the three islands, a favorite for backpackers wanting to scuba dive on a budget. Since it’s so small, most rental prices you find online are expensive Airbnbs. If you search on the ground and negotiate directly with locals, you can find rustic bungalows for under $150 per month.

Off-the-Beaten-Path Destinations

Generally, the further you go from tourist destinations, the cheaper your cost of living. Rent for a basic one-bedroom place in a rural Thailand region like Isan can be as little as $50 per month.

Remember, the 2021 daily minimum wage in Thailand ranges from $10.03 to $10.77. You won’t get a Western standard of living on less than $11 per day, but if you learn to live like a local, you’d be shocked at how far your money stretches.

Utilities

When renting an unfurnished apartment on a long-term contract, you’re usually responsible for paying your own utility bills.

But even many furnished accommodations exclude electricity in the price. That’s because electricity is expensive compared to rental costs, especially if you’re blasting the air conditioning all day. Some rentals even include electricity for everything except air conditioning, which they meter separately.

To make matters more complex, when property owners charge for electricity in furnished apartments, they set their own rates per kilowatt-hour. The official power tariff in 2021 is $0.11 per kilowatt-hour, but depending on how much the property owner wants to profit, you could pay anywhere from $0.12 to $0.25 per kilowatt-hour.

When comparing rental options, factor in:

  • Whether they include electricity
  • How much they charge for it
  • How much you plan to use

It can get confusing, and we ended up creating a full-blown spreadsheet to keep everything straight. Just know that if you pay the property owner for electricity (versus paying the electric company directly), the monthly cost of your electricity bill could double depending on the rate they set.

Numbeo reports that the average utility bill (electricity, heating, cooling, water, and garbage) in Thailand is $68.

And choosing a cooler climate doesn’t necessarily lead to a lower air-conditioning bill. You also have to factor in pollution. Bangkok is known for its pollution, and on bad days, you won’t want dirty air circulating through your house. That means keeping the windows closed and the air on and investing in an air purifier for your home.

Similarly, during the burning season in Chiang Mai and the northern regions, the air quality reaches harmful levels, and you should keep the windows closed.

Food

Thai food is delicious and cheap. Eating out is so affordable that most Thais build their houses without a full kitchen. That means, unless you pay for a property built specifically for Westerners or tourists, you won’t cook many meals at home.

Food costs vary by location. Touristy areas like the islands and expat hangouts generally have the highest prices. But no matter where you go, there’s usually always a food cart or small family restaurant serving tasty rice and noodle dishes for $2 or less.

Rural areas can cost much less. I once visited an orphanage on the outskirts of the small town of Chiang Rai. The founder invited us to a delicious feast at a local restaurant, and our bill came out to a shocking $0.80 per person, including drinks.

When hunting for the cheapest restaurants in town, look out for general cleanliness to avoid getting sick. If it’s packed with locals, that’s a good sign the food is safe.

Thailand is also full of vendors selling fresh fruit and fruit shakes on the streets. While in Bangkok, we bought $1 coconut shakes and a bag of $0.50 mangoes every day.

Coffee lovers in Bangkok spend an average of $2.20 per cappuccino. The average chicken breast runs $1.10 per pound if you want to cook yourself. But with such cheap and delicious restaurants, it’s often hard to justify the time spent cooking.

That said, not all food in Thailand is cheap. After living in Thailand for a while, many expats start to miss Western food. And Western food in Thailand is pricey — and underwhelming.

Many Western ingredients, like cheese, are hard to come by in Thailand. That means foods like burritos, hamburgers, and pizza are both expensive and taste funny with substituted ingredients.

Transportation

Public transportation in Thailand is so cheap and convenient that owning a car is rarely necessary. Instead, most expats use motorbikes or public transit.

The average cost of a basic scooter rental varies by region, but you can usually pick one up for as little as $60 per month. You can also rent bigger motorcycles, but they cost two to five times as much, depending on the model you choose. In addition to rental fees, you have to factor in gas costs, which average $3.36 per gallon in Thailand.

When renting a motorbike, choose a model with parts made in Thailand. That way, if you crash or scratch the bike, you won’t have to pay outrageous fees to import parts from a different country. Also, record a video showing the condition of the motorbike before you rent it. Otherwise, the rental agency may try to charge you for damages you weren’t responsible for. I learned that the hard way.

You technically need an international driver’s license to ride a scooter or motorbike in Thailand. If you plan to live in the country long-term, it’s worth getting. If you’re just visiting, many tourists rent scooters without it. If the police pull you over, they give you a ticket or try to extort a bribe from you. So sticking to public transit may be best.

If scooters aren’t your forte, there are plenty of other affordable transportation options available. For example, there’s the metro system in Bangkok, moto taxis, and the famous shared red truck taxis (called “songthaews”) in other regions like Chiang Mai.

For example, when we lived in Chiang Mai, a songthaew within the city limits of Chiang Mai cost us roughly $1 per person.

Fares for Bangkok’s BTS and MRT depend on the distance you travel, ranging from $0.50 to $1.70.

If you live in a walkable neighborhood or beach town and take subways or songthaews once per day, you’re looking at $2 per day round trip, or $60 per month in transportation expenses.

On the other extreme, if you live in Bangkok and constantly take taxis across the city — which cost an average of $0.66 per mile, according to Numbeo — your transportation bill could shoot up to a couple hundred dollars.

Entertainment

There’s more to life than food, rent, and transportation. Thailand is famous for its nightlife, and that’s where a lot of people run into trouble.

Based on our experience, beers in most bars and nightclubs only cost $2 to $4. That said, expats and vacationers can quickly find themselves partying a bit too hard and spending even more than they do back home.

Some nightclubs have free entry, but we’ve paid up to a $15 cover. If you’re going out multiple nights per week — which can be tempting in a city that never sleeps — your monthly budget can quickly go off the rails.

If you prefer to entertain yourself with travel and exploration, you’re in luck. Thailand has 1,430 stunning islands, many of which you can access fairly cheaply.

For example, an 11-hour bus ride from Bangkok to Krabi costs less than $20. And if you buy in advance, direct local flights can be just as cheap.

Phone and Internet

In the past, one trade-off of living in Thailand was slow and unreliable Internet speeds. That’s no longer the case. In fact, fast Wi-Fi is one of the reasons expats and digital nomads choose to live in Thailand over other similarly affordable countries.

In Thailand, the average price for a 60-megabits-per-second or faster Internet plan is less than $20 per month.

Prices for cellphone plans vary based on:

  • Provider
  • Length of contract
  • Amount of data
  • Data speeds

Prices also depend on whether you need a data-only plan, a calling plan, or a combination of the two.

For example, with TrueMove H, you can get an unlimited data plan with a couple hundred calling minutes for less than $20 per month.

Note that many “unlimited” data plans only include a certain amount of data at maximum speed. After that, it’s throttled.

Gyms, Spas, and Self-Care

Gyms in Thailand can be surprisingly expensive.

The gym we joined in Chiang Mai cost $30 per month, three times as expensive as Planet Fitness in the U.S. Of course, our gym catered to expats, with air conditioning and well-maintained equipment. You can also find more rustic gyms for as little as $5 per month.

That said, many condos have free gyms on-site. So if it’s important to you, finding one could save you money even if it’s more expensive than another rental.

Thailand’s massage culture is world-renowned and a big part of many expats’ lives. Steeped in Buddhist traditions, Thai massage techniques have been passed down from generation to generation for centuries.

You can find massage parlors on almost every corner. While living and traveling around Thailand, most parlors we saw cost between $5 and $15 for an hour-long massage.

Cost of Health Care in Thailand

Health care in Thailand is incredibly cheap, especially coming from countries with outrageous health care costs like the U.S.

I once needed a procedure that would have cost over $25,000 in America. In Bangkok, I had it done for $1,500, including a one-night stay in a surprisingly luxurious private hospital room.

You can find hospitals with English-speaking staff in all the main tourist hubs. But if you have a complicated situation, Bangkok is the place to go.

Also, just because a hospital is more expensive or internationally recognized doesn’t necessarily mean it has the best doctor for your condition. To find a specialist, I searched for the top surgeons in Bangkok for that discipline. It turns out the best specialist in all of Asia worked out of a small private hospital — a hospital nowhere to be found on the online lists of best Bangkok hospitals for expats.

Many expats living in Thailand on a tourist visa rely on travel insurance or international health insurance for their coverage. These plans range from basic $40-per-month SafetyWing travel insurance to more comprehensive plans that cost hundreds of dollars per month. Whichever plan you choose, your premiums depend on factors like your age, the coverage you need, the country you’re from, and the insurance company you choose.

Expats with a resident visa can also buy local private insurance like Luma Health for coverage in Thailand. These plans are comparable in price to international health insurance plans, and most hospitals can bill them directly. It’s more convenient than a travel insurance policy that requires you to pay out of pocket and submit claims for reimbursement.

Lastly, if you work legally in Thailand and pay Social Security taxes, you receive free government medical insurance. If you’re used to Western standards, set your expectations appropriately. Odds are you won’t be impressed with the treatment you receive under free government insurance in a developing nation.

Thailand Visa Expenses

American tourists on short-term vacations don’t need an entry visa.

But if you plan to stay in Thailand full-time as a retiree, recurring tourist, Thai spouse, student, or business owner, you need a visa.

To keep these visas current, you must pay to renew them regularly.

For example, a single-entry education (ED) visa — which you could use to take Thai language lessons — costs $80, and you must renew it every 90 days.

The fee for a five-year retirement visa is $400. It also requires proof of an income source greater than 65,000 baht (roughly US$2,000) per month. Immigration waves the monthly income requirement if you maintain a balance of at least 800,000 baht (US$24,585) in a Thai bank account.

That said, many countries have introduced digital nomad and remote work visas in the wake of the pandemic. Thailand is in the process of creating its own remote work visa, which would eliminate much of the hassle and expense remote-working expats face.

Income Tax in Thailand

Just because you live abroad doesn’t make you exempt from income taxes. If you live in Thailand for more than 180 days (roughly six months) per year, you’re considered a resident. Residents in Thailand must pay taxes on income earned worldwide. If you are not considered a resident, you must still pay taxes on income earned in Thailand.

Thailand has progressive income tax brackets similar to those in the U.S., ranging from 0% to 35%.

Americans must also file taxes in the U.S., but you can avoid double taxation thanks to the U.S.- Thailand tax treaty, foreign earned income exclusion, and foreign tax credit.


Final Word

In addition to everyday living expenses, you also have to factor in the cost of an intercontinental move and building a healthy emergency fund.

Not only do you have to buy a plane ticket across the globe, but unless you stick to renting expensive furnished spaces, you also need to buy a bed, fridge, furniture, cookware, and decorations.

That said, even though Thailand isn’t quite as cheap as it once was, it’s still one of the best places you can live on $2,000 per month or less.

Source: moneycrashers.com