If you have a company 401K, then you probably invest into a mutual fund versus investing in individual stocks. But do you really know what it is? Let’s cover some mutual fund basics. A mutual fund is an investment company that pools the money from several different people (investors like you) and then buys into stocks, bonds, money market accounts, or other assets, like commodities. Shares of this company are then offered for sale. Mutual funds therefore have to be managed by a fund manager, who collects all this money and makes sure to buy and sell all the right stocks, bonds, etc.

One thing I learned recently when studying mutual fund basics is that these funds can make money for you in three different ways: dividend payments (from the stocks owned within), capital gains (when stocks are sold within the fund), and increased net asset value (NAV). When I typically think about mutual funds, I just think in terms of increased NAV. I forget that some stocks pay dividends, and that managers are constantly selling winning stocks to lock in gains. I guess because these gains and dividends remain in the fund, you don’t really think about it.

Mutual Fund Basics

Why Invest in Mutual Funds

There are several reasons to like mutual funds. Mutual funds allow the beginning investor to own a diverse set of stocks, bonds, etc. without having to use large amounts of money to buy into each asset class or stock. Instant asset allocation. For instance, with the American Funds Mutual Fund (AMRMX), you can pay $250 and get several shares. In each share of this fund, you’ll be buying into U.S. stocks, fixed income, cash, and international stocks. And within your stock purchase, you’ll own pieces of Merck, AT&T, Microsoft, IBM, and many, many others.

To get this kind of diversity with your own money, you’d need a heck of a lot more than $250 (the fund minimum). And you’d need a lot of time on your hands. Mutual funds don’t just sit around on the same mix of investments. They are constantly moving in and out of different stocks and bonds to try to maintain a good performance and to hold true to the fund’s original goals. So with a mutual fund, you get a full time professional manager to handle all of this. The trade off with mutual funds is, of course, that you have to pay this professional to manage all this for you. James Dunton has been managing the AMRMX fund for 39 years. I’m sure he’s paid well for his services.

Risk Involved with Mutual Funds

The risks involved with mutual funds are the same with any other security investment. The investment can lose value. There is also the risk of too many expenses. Mutual funds are often heavily managed. Therefore they come with a cost. When these costs are too high, and your investment return is too low, you could be losing money.

Different Types of Mutual Funds

The three main types of funds are money market funds, bond funds, and stock funds. Money market mutual funds generally try to preserve value. This is considered the safe haven in most portfolios. Although, as we’ve discussed before, they are not FDIC insured like a money market account. Bond funds are more risky fund, and they aim for a low return. Stock funds are the most popular and diverse mutual fund category. They come in all shapes and sizes. Four common examples of stock funds are: growth funds, income funds (dividend stocks), index funds, and sector funds. Another hybrid type of mutual fund is the target-date fund, which invests in cash, bonds, and stock, getting more conservative as I age. I currently use the Vanguard 2040 fund. What type of stock funds do you own in your 401K?

Mutual Fund Expenses

The fees break down into two basic categories: shareholder fees and annual fund operation expenses. The former are usually charged when you buy or sell. The latter are charged on an annual basis just for holding the funds. When funds are described as no-load, they are referring to the shareholder fees. When you compare “expense ratio” know that they are referring to total annual fund operation expenses. Fund companies don’t make it easy to locate the expenses and fees associated with funds, so be prepared to research this before buying into a fund.

How to Invest in Mutual Funds

Mutual funds can be purchased at a mutual fund company directly like at Vanguard or Fidelity. They can also be purchased at a stock broker, a bank, or even with a CFP.

Mutual Fund Basics is a post from: PT Money: Personal Finance by PT.

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Chase continues to be hard at working in trying to obtain new credit card customers and they’ve now launched a 25,000 bonus point offer on their Chase Sapphire Preferred Card.  If you turn the 25,000 bonus points in for cash, you can get a $250 statement credit but if you use them to redeem a flight through Ultimate Rewards, you can get a ticket worth up to $312.50.  Not to worry if your flight is more expensive … you can simply pay the difference.  The catch, if you want to call it that, is that the new cardholder must spend at least $3,000 within the first three months.

The reason you can get a more expensive plane ticket is the Chase Sapphire Preferred Card offers a 25% increase in points when you redeem them through their Ultimate Rewards platform.  Plus, cardholders will also receive a 7% dividend at the end of the year, meaning you’ll receive even more points!  Every dollar spent is worth one rewards point.

The Chase Sapphire Preferred Card’s $85 annual fee is waived for the first year and the coolest feature of this card is the 24/7 live operator support you’ll receive.  No pushing buttons to connect to a human being, the number you are provided on the back of your Chase Sapphire Preferred Card leads straight to a customer service representative.

So if you’re looking to make a big purchase in the next few months or find yourself putting most of your daily purchases on one credit card AND have the excellent credit required to obtain this card and limited time bonus offer, consider the Chase Sapphire Preferred Card.

Chase Sapphire Preferred Card $250 Cash Bonus is a post from: PT Money: Personal Finance by PT.

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How much money will you need in retirement? That’s the ultimate retirement question, right? Who knows. There are so many moving parts when it comes to retirement expectations: life expectancy, out-of-pocket medical expenses, inflation rates, investment return, taxes, etc. How could anyone possibly predict any of these things correctly?

It certainly makes you want to just throw your hands up and say “forget about it”. But we all know that’s a bad move. Not just because it will make you sound like Donnie Brasco. But because one thing is for certain: you will retire. Or you will at least get to a point where you can no longer work and provide for yourself. And at this point you’ll need to bridge the gap financially until you die.

What Will Retirement Be Like?

The question then becomes, what do you want your standard of living to be like during that period? Last week we discussed social security and how it is supposed to replace about 30%-40% of your income in retirement. Could you live off of 30% of your current income? I suspect that most of us could, but don’t want to. That leaves only one solution: making an attempt at your own retirement savings.

So when you’re playing around with your favorite retirement calculator, thinking about what you’ll need in retirement, I’d encourage you to use long life expectancies, high inflation rates, etc. Be overly-conservative in your approach. There’s no harm in expecting you’ll need more. Overestimating and then underachieving is better that underestimating and achieving.

Photo by pedrosimoes7.

Should You Overestimate Your Retirement Needs? is a post from: PT Money: Personal Finance by PT.

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Today, with the real estate industry trying to recover from the shambles it was in a year or so ago, it’s no surprise that the mortgage short sale is more the norm than the anomaly. For those who are in the dark, this process is a face-saving measure for homeowners who owe more in terms of mortgage than their home is now worth, who are unable to meet mortgage payments on their home, and in danger of foreclosure.

When you choose to short sell your home, your lender is in essence forgiving a part of your loan; a buyer who is willing to pay the amount the lender sets is found, and your home goes from your hands to theirs.

The mortgage short sale is a win-win situation for all concerned – the buyer gets a home at a reduced price; the lender, while losing out on some money, gains because they are spared going through the long, drawn-out and expensive process of foreclosure and then having to find a buyer for the home; and you as the seller are saved the embarrassment and humiliation that comes with having your home foreclosed.

Short sales are not for everyone, so whether you’re a seller or buyer, here are a few points you need to know before becoming involved in one.

Mortgage Short Sale Tips for Sellers

Too Many For Sale Signs?

• Ensure that you qualify for a short sale first.
• Talk to a real estate lawyer so you understand what you’re in for.
• You can begin a short sale even before you’re in default if the current value of your home is less than the amount you owe.
• Remember that a short sale can be initiated even a few minutes before your home is up for a foreclosure auction.
• Check if you should do a short sale through a preliminary net sheet – this estimated closing statement tells you whether a short sale is a good idea or not by taking into account the unpaid loan balance, outstanding payments, late fees, cost of the sale, real estate commissions, and other costs. If you as a seller are left with some cash at the end of the calculations, then it’s not wise to sell.
• If you have a second mortgage on your home, you cannot sell short without dealing with it first – if the lender is the same, maybe the short sale proceeds can be distributed over both mortgages; if it’s a different lender, you could buy out your loan without paying any interest you owe if the lender is agreeable (most of them agree to avoid a total loss), or if cash is a problem, you could ask them to release the loan after signing a note for the repayment of a percentage of the loan. Either way, the second mortgage has to be addressed before you do a short sale.
• Lenders may not allow you to do a short sale if you’ve neglected paying your mortgage to finance other assets or if you’ve spent money indiscriminately.
• You will have to provide a detailed copy of your list of assets and liabilities and your bank statements.
• Any large withdrawal in cash is likely to be questioned by your lender to check if you’re scamming them into a short sale for any reason.
• Your debt forgiveness is taxable, so you may incur tax on the amount you owe your lender but are not paying because of the short sale. So talk to your accountant or a real estate lawyer to work out the amount of tax you owe and if it’s worth it.
• Your credit report will be affected if you go through a short sale – while it’s not as bad as a foreclosure record, it will show a pre-foreclosure that has been redeemed.
• Remember that a short sale can only go through if you have a buyer willing to take your house off the market. The buyer and the lender must agree on all terms and be in agreement for your short sale to be completed without a hitch.
• And finally, your lender can pursue you for the amount that you still technically owe them if it is allowed by state law. So before you sell short, get a written agreement from them that your debt is forgiven and that you don’t have to pay back the amount you owe on your mortgage.

For more seller tips, check out this video from the Dave Ramsey show…

Mortgage Short Sale Tips for Buyers

• Ensure that you go through a trusted real estate agent so that you don’t get scammed or cheated.
• Never pay the seller outside of closing – not only is it illegal, you also set yourself up for additional tax liabilities by doing so.
• Ensure that there are no liabilities on the home; a second mortgage that is outstanding and hasn’t been dealt with should be taken care of by the seller before you close the sale.
• Before you decide to buy, check public records to find out who owns the title to the home, whether a foreclosure notice has been filed, and how much the seller owes to the bank. This helps you decide how much to offer and how high a price you should pay.
• If you need financing, be sure to check current mortgage rates and find a solid lender.
• You may have negotiated terms with the seller; even so, unless the lender too is in complete agreement, problems may keep coming up during the sale. In a short sale, the lender takes over the role of the seller, so they are responsible for agent commissions and other costs associated with the seller in a real estate deal. The lender may refuse to pay your pre-decided agent commission, in which case you may have to pay the difference out of your pocket. They may also refuse to pay for termite inspections, home insurance, minor repairs and other buyer credits. So be prepared for further negotiation to get all these included in the terms of sale.
• Don’t buy a home without having it inspected first for pests and other maintenance faults.
• And finally, remember that while a short sale could close in as little as 30 days or less, the majority of these transactions take months, even up to six, to close. So if you’re really interested in the home, do your homework and be prepared to wait it out.

This guest post is contributed by Omar Adams, he writes on the topic of online accounting degree. He welcomes your comments at his email id: omaradams47@gmail.com.
Photo by TheTruthAbout…

Mortgage Short Sale: Tips for Buying and Selling is a post from: PT Money: Personal Finance by PT.

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Inflation 101

Inflation is the general rise in the price of goods and services over time. Basically, when the price of the sandwich you buy for lunch rises, the dollar that you use to buy it is worth less. So, over time, the nature of inflation is to reduce the value of the exchange currency. This explains why you could by a can of coke for $.25 when I was a kid. But now they cost $.75. Inflation is measured by watching the change in an index, like the Consumer Price Index (CPI).

Effects of Inflation

Historically, the inflation rate has been around 3%. We had a high period of inflation in the 1970s here in the US, with annual inflation rates for some years more than 10%. High inflation is obviously not preferred because salaries can’t keep up, at least in the short-term. And, people who have money saved get hurt because their savings can now buy less. On the flip side, inflation can be good if you’re holding debt.

Most economists would prefer a low level of inflation vs no inflation though. From what I understand they like this slow increase in prices to keep recession at bay, and to have enough speed going to be able to press the brakes if needed without sending things in reverse.

Is High Inflation Coming?

We are currently experiencing very low levels of price inflation. The CPI hasn’t been increasing by much at all. In fact, some economists are starting to predict deflation. This seems confusing to me though since we’ve done a lot of money printing in the last 2 years. Thus, high inflation, or even hyperinflation is a concern for many in the long-term. Confusing.

TIPS: Hedge Against Inflation

There are several ways to attempt to protect yourself against high-inflation. Dave Ramsey recommends real estate bought for cash. Some recommend commodities like Gold. And there is another way that’s I’ve never discussed here.

One of these ways is to invest in Treasury Inflation-Protected Securities (TIPS). TIPS are bonds backed by the government, which have a fixed return, and are adjusted for inflation using the Consumer Price Index. If you are concerned about future inflation it might be wise to consider them for your retirement portfolio.

Carnivals: Stocks, Boomer and Seniors, Frugality, Debt Reduction,  Money Stories, Personal Finance

What is Inflation and Can You Avoid It? is a post from: PT Money: Personal Finance by PT.

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That’s exactly what William and Cynthia Foust of Mount, North Carolina had to say about their automated savings. According to a recent Money magazine profile, they’ve been able to save over $800,000 for their retirement. Granted they saved at a rate of 35% of their income, which is no small feat.

But a bigger feat these days seems to be remaining consistent with your savings. Life just gets in the way. One month you have excess funds and the end of the month and you can dump some money into savings. The next month, you fall short and have to reach into savings to help you out.

That’s why I love automated savings. As long as you stay at the same job, there’s nothing to get you off track. You set it up once, and you forget about it. Notice that the Fousts didn’t just do it with 401Ks though. They also used the Roth IRA, an online broker, and an online savings account to supplement their effort. Great move. They are my saving heroes.

Keep in mind if you decide to do this, you need a little more discipline to make the automation work. Instead of a direct deposit (like your 401K), you’ll likely need to set up an automated withdrawal from your checking account. Start small and set the transfers to occur the day or two after your paycheck arrives. Once you get comfortable with the move you can increase your contributions.

To see more inspiring money profiles, visit my list of Millionaires in the Making.

We Never See the Money, So We Don’t Miss It is a post from: PT Money: Personal Finance by PT.

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I can’t believe I’m trying to tackle the subject of social security right now. It’s super complex in it’s history, very controversial by nature, and the future of it’s solvency and makeup are unknown.

But, regardless of all of that, you and I both pay into the Social Security system. So it’s worth it to look close enough to at least provide an estimate of how much of your money you’ll be getting back, right?

Social Security 101

• When people use the term social security they are actually referring to the social insurance program, the Federal Old-Age, Survivors, and Disability Insurance program established by the Social Security Act of 1935.
• Social Security is collected through FICA payroll taxes, which is 7.65% of your earnings up to $106,800.
• The current normal retirement age for full Social Security benefits is 67.
• The average monthly benefit for current retirees is around $1,100 a month.
• Social Security is the single biggest expenditure of the federal government.

From my understanding, Social Security started out as a social program to help those with the most dire needs in our country. Now it seems that social security has become the retirement program for just about everyone. Check out this chart from a recent Social Security survey put on by the University of New Hampshire Survey Center.

Who Needs Social Security?

That’s crazy. Almost 50% say they are at least very likely to need Social Security in retirement. What about 401Ks, IRAs, etc. Is all this just lost on everyone? Maybe I’m misinterpreting what “need” means in this survey. But I don’t think I’m misinterpreting the fact that Social Security has grown to be more than it’s original intention.

How Much Are You Estimated to Get?

If you want to know how much you can expect in retirement from Social Security, visit the SSA’s estimator page.

Social Security Benefit Estimator

They also have a life expectancy calculator there. Puts me at 86 when I finally croak. You should also be receiving an annual statement from the SSA. You’ll be able to tell from that statement what you can expect in retirement.

But all this depends on the future solvency of Social Security. Will they continue cost of living increases (no increases for the last 2 years)? Will they start paying only a % of your benefit? Will they have to change the normal retirement date?

The Future of Social Security?

You hear a lot of hype about how Social Security is failing, or that it won’t be around by the time I retire. What’s the truth? Well, by the above chart I’d say that American’s won’t let it fail. When you have that many people depending on it, it’s going to remain a priority.

I just don’t see Social Security ever going away. It’s a ponzi scheme of sorts in that the earnings of the currently employed are needed to pay to those receiving the benefits. That being the case, everyone who has paid in at least 10 years of Social Security feels like they deserve to get those funds returned to them as benefits. So, once you work for 10 years, there’s no way in heck you’d say drop the whole thing. You put your money into the system, therefore, you don’t want it canceled.

The Trustees Report

Enough of my ramblings. What do the actuaries say? The Social Security trustees put out an annual report opining on the future of social security. They are required to do this just like any other investment house. Here’s what they said in their 2009 report.

“Under the long-range intermediate assumptions, annual cost will begin to exceed tax income in 2016 for the combined OASDI Trust Funds. The com­bined funds are then projected to become exhausted and thus unable to pay scheduled benefits in full on a timely basis in 2037. The separate DI Trust Fund, however, is projected to become exhausted in 2020.

For the combined OASDI Trust Funds to remain solvent throughout the 75-year projection period, the combined payroll tax rate could be increased dur­ing the period in a manner equivalent to an immediate and permanent increase of 2.01 percentage points, benefits could be reduced during the period in a manner equivalent to an immediate and permanent reduction of 13.3 percent, general revenue transfers equivalent to $5.3 trillion in present value could be made during the period, or some combination of approaches could be adopted. Significantly larger changes would be required to maintain solvency beyond 75 years.”

Side note: Where is the 2010 report? The 2010 trustees report has been severely delayed. That doesn’t sound good.

Can You Count on It?

If you go by the 2009 report, it looks like if you are retiring in less than 27 years (age 40 or older) you will receive your full benefit. Of course, I can’t imagine the 2010 report being better than 2009, so we’ll have to see if that holds up.

But let’s say you do get your full benefit. Is the future equivalent of $1,100 a month going to be enough for you in retirement? If that’s all you have at that time, then you’ll likely still be poor. Studies show that 12% of those on Social Security still live below the poverty line. Not a dream retirement for sure.

The moral of the story is that there a lot of moving parts here, but most of us can probably count on the future equivalent of at least $1,100 in retirement from Uncle Sam.

My advice is to play it ultra-conservative and forget about Social Security. Don’t count on it. If you get it, great. If not, no worries because you have your retirement set using your 401K and your IRA.

What’s your take on Social Security? How big of a roll do you think it will play in your retirement?

Can You Count on Social Security? is a post from: PT Money: Personal Finance by PT.

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Small Business Credit Cards have always been a great way for start-up businesses to obtain the capital they need to open the doors of their dreams. When the economy took a tumble in 2008, some of the first products to be removed from the market were these very same small business credit cards that had helped so many for so long.

Advanta was the most well known small business credit card provider and not only did they stop allowing new customers access to credit cards but they close their doors entirely because their debt was just too much. Today, there are still a handful of issuers looking to lend a hand to small businesses and while the offers are not as lucrative as they once were, small business credit cards are a great start for any new business.

PT’s Pick For The Best Small Business Credit Card

Ink Cash(SM) Business Card – The Ink Cash(SM) Business Card from Chase is the best business card you can find online, bar none. The card comes with an excellent cash back offer of 1% on all purchases and 3% on all fuel, home improvement, dining and office supply purchases and the amount of cash back you can earn each year is unlimited. Plus, if you shop online through Chase Rewards Plus, you can earn up to 10% cash back.

In addition great cash back offer, the Ink Cash(SM) Business Card comes with an intro APR of 0% on purchases and balance transfers for six months. There is no annual fee and no fee for adding more cardholders to the account. Excellent credit is needed to obtain the Ink Cash(SM) Business Card and with an APR of 11.24% variable, this card scores a top mark in every single category.

Capital One® Venture for Business(SM) – A close second for best small business credit card, the Capital One® Venture for Business(SM) is designed for business that need to travel. 10,000 bonus points can be earned after your first $1,000 in purchases within the first three months and another 5,000 bonus points for signing up at least one additional employee to use your card. Double miles are earned on ALL purchases with no tiers or restrictions to meet. Because it’s a Capital One Card, the Capital One® Venture For Business(SM) does not charge any foreign transaction fees, allowing you to use your card internationally for free. The first year’s annual fee is free but $59 thereafter and the purchase APR is 13.9& variable.

Ink(SM) with Ultimate Rewards(SM) – The Chase Ink with Ultimate Rewards is a great travel rewards card designed for small business owners with excellent credit. Every purchase earns 1 rewards point and all travel purchases made through the Chase online booking tool earns 2 rewards points. The card comes with an intro APR offer of 0% on purchases and balance transfers for the first six billing cycles and a purchase APR of 11.24%* thereafter. No annual fee is included in the Chase Ink(SM) with Ultimate Rewards(SM) and additional cards can be given at no cost.

Starwood Preferred Guest® Business Credit Card from American Express OPEN – As a consumer card, the Starwood Preferred Guest® Credit Card is one of the best travel rewards credit cards around. As a business card, the Starwood Preferred Guest® Business Credit Card from American Express OPEN is just as strong. The card includes 10,000 bonus Starpoints after your first purchase, one Starpoint for every dollar spent and 2 Starpoints for every $1 spent at Starwood hotels. The card carries no annual fee for the first year and $45 thereafter and has a purchase APR of 15.24%.

Capital One® Business Platinum with No Hassle Cash(SM) – The easiest cash back credit card to understand, the Capital One® Business Platinum with No Hassle Cash(SM) earns cardholders 1% cash back on all purchases. All additional employee cards carry no additional fee, and the card itself carries no annual fee. The Capital One® Business Platinum with No Hassle Cash(SM) also includes a 0% APR on purchases and balance transfers until April of 2011 and because it’s a Capital One card, there is no foreign transaction fee. After the introductory offer, the card has an APR as low as 14.99% variable.

Ink(SM) Bold with Ultimate Rewards(SM) – Unlike the other cards on this list, the Ink(SM) Bold with Ultimate Rewards(SM) is a charge card, not a credit card. This means that when the statement in the mail comes, the entire balance is due. If you’re business spends a lot, you can earn 47,500 bonus points every year! 7,500 for your first $25,000 spent, 15,000 for your next $25,000 spent and another 25,000 for your next $50,000 spent. Yes that means you have to spend $100,000 a year to obtain these points but most businesses can find ways to do that. With another 5,000 bonus points given after your first purchase and no annual fee for the first year ($95 thereafter), the Ink(SM) Bold with Ultimate Rewards(SM) is the ultimate small business charge card.

True Earnings® Business Card from Costco and American Express – This card offers a great tiered cash back offer and if you spend in the right places, the cash back you earn might make this the best card on our list. 4% cash back on annual gasoline purchases (up to $6,000), 3% on restaurants, 2% on travel and 1% on everything else (including at Costco) is the breakdown you’ll find on the True Earnings® Business Card from Costco and American Express and if you pay your Costco membership each year, the card carries no annual fee. One last bonus you’ll find is a 0% intro APR offer for six months on purchases and a regular APR offer of 15.24%.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are authors alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

The Best Small Business Credit Cards is a post from: PT Money: Personal Finance by PT.

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Goldline Investigation

I’m sure you saw today that Goldline is being investigated for fraud. If you’ve turned on the TV or tuned into conservative talk radio over the past few years, you’ve no doubt seen or heard the pitch from Goldline: add Gold or other precious metals to your portfolio to provide a hedge against future inflation caused in part by bailouts and run-away government spending. Not a bad pitch. Fear sells.

It’s been suggested that Goldline uses bait and switch type sales tactics and has a huge profit margin on certain coins that they sell. Basically, people call up Goldline to buy bullion and Canadian gold coins, and the sales rep pushes other high margin products on them. We’ll have to wait and see if they were actually being fraudulent in their methods. I personally think the investigation has more to do with politics than anything. Goldline is just like any other business. Concerned with turning a profit.

Either way, the happenings at Goldline, good or bad, should have no effect on your decision to buy gold. Other than to encourage you to price shop when buying coins.

Different Ways to Buy Gold

There are actually several different ways to buy gold, not just the bullion and coins that Goldline sells. I hesitate to say “invest” in gold because it is a commodity, and has no internal growth potential. It’s a store of value. And investing in gold is really just speculation. And on the surface, from my limited point of view, it looks to be an awful time to be speculating in gold. Look at this bubble:

30 Years of Gold

But what do I know? Some are still suggesting gold is a good buy. Anyway, if you want to buy gold, here’s some different methods:

• Gold Bullion and Coins
• Gold Jewelry
• Gold Exchange Traded Funds (ETFs)
• Gold Mining Company Stocks, Mutual Funds, and ETFs

Each of these investment types have their positives and negatives. I encourage you to do your own research and fully understand the investment product you’re getting into. And as always, as with any single investment, keep your gold holdings to only a small percentage of your entire portfolio.

Interesting fact: all the gold mined in the world could fit into just one 20 meter cube. That could probably fit in most suburban home backyards.

Do you own gold? Why or why not?

Done with Goldline? There’s More Than One Way to Buy Into Gold is a post from: PT Money: Personal Finance by PT.

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I had someone ask me the other day if I knew of “ways to make money for free”. Huh? What does that even mean? Let’s assume it means this: is there a way to make money without expending energy (i.e. doing work), spending some time on it, or giving up something of value (e.g. stuff, privacy)? I’m going to have to say no to this one. If there was something like that, I think we’d all know about it. But let’s look a bit closer. Looking through my 52 ways to make extra money, I’d say there are a couple of items that actually come close.

This can be yours for the price of...nothing?

The Incomplete “Make Money for Free” List

I’ve racked my brain and scoured my list of money making ideas for a few that don’t require much time, energy, or loss in value on your part.

Cash Back Shopping (e.g.Ebates) – Assuming you are already going to spend the money, using Ebates to get a cash kick back on the transaction is pretty labor and time free. All you have to do is sign up once with Ebates and remember to use them when you shop. So, while it’s not totally free, it’s close.

Cash Back Credit Cards – Along those same lines is the cash back credit card. You have to spend money to get the cash back. But again, assuming you are a human and need to spend money on food, gas, and other living expenses, you’ll freely earn cash just by using your card.

Bank Account Sign Up Bonuses – Some banks will pay you a cash bonus just for opening up a savings account or online checking account. The only problem with this “free” money is that you have to go through the process of opening up an account. This usually involves giving up your private information and having your credit file checked. Also, the bonuses usually don’t kick in till some time has passed, or some virtual hoops are jumped though.

Credit Card Sign Up Bonuses – Similarly, the credit card companies will give you cash back bonuses just for signing up with the card. See my free stuff page for a complete list. Some do come with spending requirements though.

“Already Headed That Way” Labor – Finally, I think that some “close-to-free” money can be had if you take advantage of the time and place you naturally find yourself. An idea that I recently ran across was this guy in Central Park who brought his cell phone charger along and then offered to charge others for a tip.

Can you think of any other ideas that come close to being a free way to make money?

What’s Easiest to Give Up?

Since giving something up likely cannot be avoided. You should just think about what’s easiest to give up. When trying to bring in a little extra money, whether for savings or debt reduction, it’s key to think about what you’d be giving up to get the money. Which of these things “costs” you less to give up:

• time,
• labor,
• or value?

The one that costs less to give up should be the one you focus on. For instance, if you’re a college student, single person, or married with no kids, you likely have tons of free time on your hands. I know because I was once you. You should likely focus your money making efforts on using all that free time. Time is easy for you to give up.

Likewise, if you have a bunch of “stuff” lying around your house that you don’t use anymore, then consider using your stuff to help you make extra money. If you’re already running pretty lean in that department, then use a different method.

What’s your take? Are there any ways to make money for free?

Is it Possible to Make Money by Doing Nothing? is a post from: PT Money: Personal Finance by PT.

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