Category Archives: Money Management

Why You Should Keep Investing Despite COVID-19

Quick note before today’s post: I make the assumption in here that the American economy will recover over the long term. That prediction cannot be guaranteed, no more than in 2008 or 2016 or any other moment in time. Though I do believe it to be extremely likely.

The past week has been scary for a few different reasons. Most obviously relevant to us here today is the fear many have experienced as they watched the investments in their retirement accounts drop.


Before you panic, there are some things you need to remember — especially if you’re a millennial investor.

Panic is the problem.

The panic around COVID-19 is real. While we don’t yet know if this will be any better or worse than the 1918 influenza outbreak, there is one thing we do know for sure: Panic rarely serves humans well.

This is just as true in the stock market as it is in any other aspect of our lives. If you are saving for retirement, the worst thing you could do right now is panic.

Panic may lead to:

  • Selling off your investments after they’ve just experienced a dramatic loss.
  • Taxes on withdrawals you shouldn’t have made.
  • Loss of future returns your money now cannot earn because you pulled it out of the stock market.

Panic can lead you to exit the stock market altogether until you once again feel confident in it — presumably because it’s doing well again.

That’s called selling low and buying high. It’s the opposite of what you want to do as an investor.

You’ve already accounted for this. It’s a part of the plan.

If, however, you keep a level head and leave your money in your retirement account, continuing to contribute on a regular basis, you’re sticking to the plan.

And the plan has already accounted for this.

When you sat down to figure out how much money you needed to save for retirement every month, you probably picked an annualized rate of return somewhere between 6%-8%. That does not mean you will see a 6%-8% return every year.

Some years it will be dramatically more.

Some years it will be dramatically less.

In fact, some years, you might even experience a loss.

That 6%-8% interest you calculated accounts for the fact that there are going to be dips in the market. Heaven forbid, there will even be recessions.

But over the long term, the American stock market has historically always gone up.

That is what the 6%-8% represents: Over the entirety of your investment career, the stock market is extremely likely to rise, though it might dip and/or rise wildly between any given two days.

Sometimes those runs or dips can last for a sustained period of time.

What we experienced last week was one of those dips.

To be fair, it was a dramatic one. But it’s already been accounted for.

You haven’t lost any money unless you cash out.

You might look at your IRA and see that the number has gone down, but that doesn’t really mean you’ve lost any money.

That just means that if you cashed out today you would lose money.

If you let your investments ride this out and the market recovers as it has every other time in the past, you won’t lose money.

Quite the opposite. Your money will grow.

No one can tell you where you’ll find the floor.

Right now there’s a lot of people thinking:

“Hm, I wonder if this is the lowest the market will go. If it were and I invested right now, my money could only grow.”

If you’re one of those people, I’ve got nothing for you.

No one does.

Because no one can tell you where the floor is, just as no one can definitively tell you the future.

But many stocks are clearly less expensive now than they were seven days ago. If you’re investing for the long-term, it’s not an unattractive time to get started.

Don’t have a retirement account yet? Now’s a good time to open one.

If you’re feeling all cocky because you have zero stock market stress in your life because you don’t have a retirement account, let me take you down a couple notches.

First of all, if you don’t have a retirement because you cannot afford to save due to a low income, let me introduce you to the Roth IRA. It may just solve your problems.

But a lack of retirement accounts or any investments is not something to feel cocky about, even in the worst of times for the stock market.

In fact, when the stock market is doing poorly, you just may want to consider getting in on the game. While you cannot time the market, this is much closer to a successful “buy low, sell high” strategy you’d ideally want to achieve.

How to Open a Retirement Account When You Don’t Get One from Work

Since the Recession last decade, fintech has grown. There are now ways you can get in on the stock market even if your employer doesn’t offer you a retirement account because, ‘benefits? lol what are those even?’

There are ways you can get in on the stock market even if you don’t have an initial investment of thousands of dollars.

Roboadvisors now allow you to save for retirement with crazy small sums, even as little as $1. They allow you to do so outside an employer plan, though you can rollover your employer plans over using roboadvisors, too.

I got a really late start on investing myself. Coming of age during the last Recession, I was terrified of the stock market. I was great at setting aside money, but my cash wouldn’t earn enough interest to keep up with inflation, nonetheless grow.

Roboadvisors made investing an option for me by making the barrier to entry lower once I realized what a fool I was being for being afraid of the stock market. Once I realized how much I had caved to panic.

I currently like Wealthsimple, as they give me good options for socially responsible investing. They’ve also got Halal investment portfolios. Because they’re a roboadvisor, their portfolios run off an algorithm; you don’t need to know anything about investing to get started.

But this is bad.

It might be. We don’t know yet how bad things are going to get. I do not mean to minimize the loss of human life that has already happened and that which is yet to come.

My words do not come with an ignorance of supply chain disruptions, and how food shortages and Machiavellian healthcare policies could disproportionately affect those who have traditionally not had access to the stock market at all.

This could get bad. But so much of the stock market is what we believe it to be.

While I’m disgusted with much of my government at this current moment in time, I fundamentally believe in America and her ability to overcome all types of ill — whether they be physical or political. Her ability to strive for a better tomorrow, even when today is so tragically flawed.

So I’m choosing to invest in both her future and my own. I’ve got a few international mutual funds in the mix, too.

How to Manage Your Finances in 2020

This post is brought to you and contributed by an outside writer.

The start of a new year is always a nice time to take stock of your finances and make plans to improve your financial position through the next 12 months. It doesn’t help that the new year arrives right after the heavy spending associated with the holiday season.

For many, it’s the shock of a depleted bank account that triggers the sobering realization that things must change. 

Little wonder that finance-related goals are some of the most popular new year resolutions in Canada. If you want to have a happier financial ending to 2020 compared to 2019, here are a couple of tips that will help you maintain tight control over your finances.

Regularly Review Your Accounts Versus Your Goals

There’s nothing wrong with setting financial targets at the start of the year. In fact, it’s highly recommended. However, a reason so many people fall off the wagon is they only review and track their goals at the start and end of the year. Remember that a resolution is not an end in itself but a tool for the improvement of your finances.

If you don’t check on your progress on a regular basis, you might be too far off track by the end of the year to hit your targets in time. Treat your 2020 financial goals like a close relative or friend. Visit your bank accounts on a regular basis, monitor your debt, check the growth of your income and keep an eye on your expenses. That way, you can arrest any distraction quickly before it leads you far off course.

Leverage Technology

Saving, investing and tracking your money is difficult. If you think about the sheer number of transactions you initiate every month, it can be a little overwhelming. It would be understandable if you feel it takes too much time to review financial goals biweekly or monthly.

You can take out the stress out of personal finance management if you inject technology into the process. 

Smartphones have made this far easier than was a decade or two ago. Many banks, businesses, service providers and utilities will provide a free app to their customers. You can generate a report of your account, expenditure or income over a specified period. 

There are also more generic apps that can give a broader picture of your transactions. Some of these can accept third-party input in the form of uploaded text documents, spreadsheets, and images. You can see examples of these apps in this list of the best personal finance apps for Canadians.

Set Realistic Savings Goals

One mantra many people live by is to aim for the moon even if they’ll eventually end up among the stars.

This philosophy isn’t, however, advisable when it comes to the management of your personal finances.

Cultivating a habit of saving takes time. You are more likely to get into a healthy savings routine if you set realistic goals that you break down into achievable chunks. 

Your finances are finite; the goals you set should be in the context of your current income as opposed to how much you hope to earn. If your targets are unrealistic, you have a lower chance of attaining them. And when you fall short despite your best efforts, you risk feeling disillusioned. This could see you give up. 

It’s better to set a reasonably attainable goal and then aim higher when you achieve it. Of course, personal finance goes hand in hand with sacrifice. However, you shouldn’t get to a place where your savings are causing a substantial deterioration to your present quality of life. That will discourage you from sticking to the plan.

Pay in Cash

The world is going cashless. From credit cards, debit cards, Internet banking, cash apps, cryptocurrency, checks, and mobile money, there’s an aggressive global push to lower the proportion of transactions where hard cash is exchanged. It’s a good thing for governments, tax authorities, industry regulators, businesses and, to a large extent, customers too. It’s fast, convenient and auditable. 

Still, from a personal finance point of view, cashless transactions can be a major impediment to realizing your financial goals. They make spending easy. You could be walking past a shop window, see something interesting and before you know it, you have incurred an expense you had not planned for. Perhaps you even didn’t have enough cash to pay via debit card, but your sizable credit card limit makes the item affordable to you. 

Start using hard cash to pay whenever possible. Reserve cashless transactions for instances where it’s impractical to pay cash such as large purchases, bank transfers or online shopping.

These tips don’t require too much effort to implement, but they could go a long way in making 2020 a win for your financial wellbeing.

What Happens When You Have Bad Credit

This post is in collaboration with ValuedVoice.

Your credit score is important, though there are some personal finance enthusiasts who try to ignore it.

The biggest reason people try to brush it off is because some of the factors that make your credit score inch up actually encourage you to interact with debt. Whether you’re paying off an installment loan or paying off your credit card in full every month, there are sections of the PF world that want none of it.

But taking on debt isn’t the only time you’ll need a good credit score. In fact, not having one or having a bad one can negatively impact your life in other ways. To be able to ignore that fact is a privilege.

What is bad credit?

You might know you have bad credit. You know you’ve missed payments and have bill collectors blowing up your phone.

But if you have no idea what your credit score is, you’re going to want to check your credit score and full credit report to get started.

There are lots of different types of credit scores. For today, we’ll focus on one of the most common: Your FICO score.

Your FICO score is three numbers that — in most models — falls between 300 and 850.

According to Experian, you can tell if your credit is good or bad by finding it in the following ranges:

  • Exceptional: 800-850
  • Very Good: 740-799
  • Good: 670-739
  • Fair: 580-669
  • Very Poor: 300-579

Bad credit can up your car insurance rates.

According to the Zebra, those with poor credit are charged $635 more per six-month policy terms than those with very good credit.


Because actuarial scientists have figured out that people with poor credit file claims more frequently. Those claims tend to be for higher dollar amounts.

I think there’s a lot behind those numbers. Important stories that aren’t being told. Stories that would make this practice look overly punitive and perhaps predatory.

Utilities require upfront deposits from those with bad credit.

If you have bad credit, your utility provider is likely to require a deposit before turning services on. The worse your credit or overall ability to pay, the bigger that deposit is likely to be.

Again, with punishing people who have trouble paying their bills.

You may be able to get around this down payment requirement if you have a family member in the area with a history of paying their utility bill on time. Some companies will work with you and waive the fee if the family member vouches for you.

Bad credit can make it hard to get an apartment.

If you’re having trouble paying your bills and are trying to downsize so your monthly burden is more manageable, be prepared.

There are punitive measures in place in the housing sector, too.

To rent an apartment, you will often have to disclose your credit score. If your credit score is Fair or Very Poor, you can expect a higher security deposit.

Which I know you can’t afford because those bills aren’t getting paid. That’s the whole reason you’re trying to downsize.

It doesn’t make sense. But it’s unfortunately true. Should you ever find yourself in a situation where your income is stunted, you’ll ideally want your credit score to be as high as possible given your situation.

Bad credit can make it hard to get a job.

Technically, a bad credit score can’t keep you from getting a job.

But a bad credit history can.

If that sounds like splitting hairs, that’s because it is. Your credit score is derived from your credit report, which contains your credit history.

While employers are allowed to check your credit history rather than your score, odds are that a bad score is going to line up with poor credit history, too.

Not all employers do this. However, if your position requires you to handle a lot of money or very expensive items, they technically can. A poor credit score could keep you from landing jobs in money management positions, or even managing a cash drawer. You could also be rejected if you’re applying for a position where you’d be handling other people’s personal data.

You do have to consent before they can pull your credit report.

Bad credit makes it hard to get a non-predatory loan when you need it most.

And of course, bad credit makes it hard to secure an affordable loan. When you have fair credit, you stand a chance of getting approved for a traditional loan at very expensive rates. But nontraditional loans are even more expensive.

People also start looking to nontraditional loans when they have Very Poor credit or otherwise can’t get approved for a traditional loan.

It’s a frustrating situation to be in: Wanting to catch up on your bills but not being able to because the only financing available to you is ridiculous.

If you find yourself in a situation where you have bad credit, you may benefit from increasing your income — preferably to a level where it’s consistent and stable.

That seems like an obvious goal. But make it a finite one. Once you’ve reached a point where you know how you’re going to put the next meal on the table, take a step back and look at how you can improve that credit score now that you’ve got the means.

Justine’s Investing Journey: Real Estate FTW

Please welcome Justine of Live with Plum! She’s here to share her deep real estate expertise. Enjoy!

Hi, everyone!

I am Justine and I am the Founder of Live With Plum, the homebuying guide for the modern women.

I started Live With Plum after going through my own real estate journey and seeing how few resources there were for homebuyers, especially first-time home owners.

Also, as a single millennial woman of color, there weren’t many stories that looked like mine even though we are a substantial and growing segment of homeowners in America.

I had purchased 4 apartments in New York City by age 30 while working full-time and learned quite a few lessons along the way. Today I want to tell you more about my own home buying journey with a focus on my first transaction and the most recent transaction. My thought process has changed quite a bit since I started!

Through my story, I hope you will takeaway some lessons in real estate investing.

First apartment purchase: Gramercy studio

The first apartment I bought was at 25, just after I graduated from business school. I was eager to lay down some roots as I had spent my early 20s traveling extensively.

After weeks of exhaustive research, I finally found a tiny 300 sqft studio in Gramercy.

My thought process for this purchase was more like a primary resident. But I also took note of the investment opportunity.

Over the years, I’ve come to see how most people, when prioritizing the criteria of their search, purchase only with an eye to live but don’t fully consider the investment side of it. I chose my unit because I wanted to live in it and also could see the rental value.

Size: Studio, 300 square feet

Tiny, tiny apartment but because I was living in it, I prioritized the location over the size. This was definitely a starter apartment for one person.

Location: Gramercy

Because this was my primary residence to start, I wanted a neighborhood that had all the conveniences and entertainment nearby. Gramercy fit that bill as an already established neighborhood but was also one of the most expensive neighborhoods on a per square foot basis in NYC.

Building: Cooperative building

Cooperatives are quite unique to NYC and basically means the building has a lot of power over what homeowners can and cannot do. Most cooperatives have strict sublet policies but I managed to find one with liberal policies.

Fourth apartment purchase: South Bronx 3 bedroom

After completing 3 successful transactions, I was ready to take on more risks. I purchased my largest and most recent property in 2019, which was a 3-bedroom apartment in the South Bronx.

Size: 3 bedroom, 1200 square feet

As I progressed on my journey, I started to purchase bigger apartments as I realized that a studio would have limited appreciation potential in the end, just due to the size limits.

Also, living in a larger apartment allowed me to house hack, which basically means that while I live in this apartment, I decided to rent out 2 of the 3 bedrooms to create additional sources of income.

At the end, the rent (market rate) from my 2 tenants covered the mortgage and homeowner association fees for the apartment, so I ended up living for free. I probably will not continue having roommates in the longer term as I get older and want more privacy, but this is a good way of living within your means in an high cost of living city.

Location: South Bronx

Area-wise, I saw that established neighborhoods meant a more limited appreciation potential therefore I started purchasing in rising neighborhoods instead.

Building: Condominium building

While cooperative buildings are cheaper than condo buildings, there was a limited supply of buildings that allowed for subletting. Also, any renovation work done in a cooperative building required a lot more approvals than in a condo building. From an investment perspective, condominiums made a lot more sense for a passive investor.

What I’ve learned as a real estate investor.

Reflecting back on my journey, I am proud of the work I put in. I absolutely believe that a successful investor is the product of experience and the willingness to test things out. My biggest learnings and advice are:

  • Size: Larger apartments and multi-families allow you to house hack, which is a great way to build up equity on a smaller budget.
  • Location: Either pick the worst unit in the best district if you can renovate, or pick an up and coming neighborhood.
  • Building: Look for building policies that align with your intent. If you need to invest, then do a ton of research and diligence on building policies.

Have you invested in real estate? Share your experiences in the comments below!

How to Reach Your Savings Goals in 2020

This post is brought to you and contributed by an outside writer.

Woman with short brown hair holding tiny white Christmas lights up to her face and shoulders, covered in a blue knit sweater.
Photo by Clay Banks

Ready to finally reach those saving goals that you’ve been aiming for over the last few years?

With the new year just around the corner, everyone is thinking about resolutions and strategies that they can use to change their life for the better. However, while it’s always a good idea to eat healthier and get more exercise, one of the best changes you can make to your usual routine is learning how to spend your money better.

After all, what would you do if your car suddenly broke down tomorrow? Would you take out a personal loan, struggle to find credit, or have emergency savings that you can use? Here are a few ways that you can start to turn things around in 2020.

Have a Target

The most important thing you can do when you want to make a change to your finances in 2020, is have a target. Don’t just tell yourself that you want to save more money. Although that technically is a kind of goal, it’s way too vague. You need something more precise if you want to make a real difference this year.

What do you want to be able to celebrate by the time the next new year rolls around? Maybe you want to have enough cash aside so that you can put a down payment on a new home. Maybe you want to go on a family vacation to some far-off, distant land.

There’s no wrong answer.

Track Your Spending

If you want to put more of your cash towards your future, then you also need to know where your money is going now. Think about where your dollars are going each day. Maybe you’re spending a fortune on fuel for a run-down old car, or perhaps you’re constantly paying for subscriptions to television resources that you don’t use.

Tracking your spending will help you to pinpoint the areas that you can cut costs in, so that you can start making a real difference to your finances. You might even find some opportunities to reduce costs that you never thought about before.

Banish High-Interest Debts

When you start looking at where your money is going each month, there’s a good chance that you’ll see some payments to debt companies in the mix. You might have some loans from places like MoneyWorld that you need to manage, or credit card debts. If that’s the case, take a look at the kind of interest rates that you’re paying, and see whether you can reduce the costs by consolidating your loans.

Consolidating your existing debts into something less expensive can be a good way to keep costs low. The less you have to spend on interest, the more you have to put away towards your savings at the end of each month.

Make Saving Automatic

Why not make saving cash in 2020 an easier process? One of the main problems that people have with saving these days, is that they forget to put money into their savings account after they’re finished paying for all their debts and other bills.

However, if you turn saving into an automatic process, then you’re less likely to forget about it. At the end of each month, arrange for an amount of cash to transfer into your savings account. This will mean that you don’t have to remember to make a deposit.

Additionally, if your money is automatically coming out of your current account and into your savings account each month, you’ll be less likely to spend it. As soon as you check your bank statement, the money you would have spent will already be gone.

Use the 24-Hour Rule

Are you a victim of impulse buying? It’s easy to get that way these days. Purchasing things online and offline is easier than ever thanks to things like one-click purchasing. To reduce your risk of buyer’s remorse, go to all your favorite websites online and remove your personal details from them. Once you’ve done that, you’ll have to go and find your credit and debit cards whenever you want to make a purchase.

This will help you to stick to the rules that you set for yourself about how long you need to leave before making a purchase. For instance, most experts recommend giving yourself 24 hours to think about any significant purchase of more than about $20. You can reduce that cap if you need to, as well.