Millennials are consistently seen as reluctant investors. Some are a decade into their career, but they’re still relatively risk-averse, which many analysts believe is largely the result of the fact they grew up or came into adulthood in the midst of the Great Recession. Millennials have seen one of the worst financial environments in history, which has understandably made them gun-shy when it comes to investing, particularly in the stock market.
To combat that sense of hesitation, fintech companies have been creating platforms and technology that speak specifically to Millennials, and many of these companies have been quite successful in the process.
One of the biggest fintech trends leading the way not just for Millennials but investors in a range of age brackets is robo-investing. The premise behind robo-investing is one that Millennials tend to embrace because it’s seen as easy, inexpensive, and it gives the ability to create a set-it-and-forget strategy that requires minimal effort.
Robo-investing is also a viable alternative to the old way of doing things, which was to work with a financial advisor. Financial advisors, however, have been lumped in with many others in the financial services industry, such as bankers and lenders, and they’re not necessarily viewed in the most positive light by Millennials. Robo-investing platforms like Betterment give them the opportunity to skip the financial advisor, while still getting similar advantages, such as diversification and tax efficiency.
In the past, most investors would use services such as YAHOO! Finance to do their research and to track stocks, but there has been a new wave of trading software popping up that’s more comprehensive than ever before. Options such as Stocks to Trade, which was introduced by Millennial investment professional Timothy Sykes, is designed not just for the Wall Street elite, but is instead for real people.
These trading software platforms include some of the most varied data points available, and they give users the opportunity to see everything they could need or want to know about all of the big markets in one location.
Budgeting and Spending
When looking for strategies to invest, it’s just important to decide how you’ll allocate your assets. It’s also important to look at your investment capabilities versus your income and spending needs. That’s why budgeting apps and banking services are also an essential component of many Millennials financial and investment strategies.
Just one of the many examples is called Simple, which is essentially branchless banking where everything can be done on a mobile phone.
This helps investors and would-be investors because it has features to create specific, personalized goals, such as putting aside a certain amount of money each week to invest. It also includes a feature called “Safe-to-Spend” which lets users see how much they can spontaneously spend without sabotaging their budget and existing goals.
Finally, another big way fintech is changing the investing landscape not just for Millennials but for everyone? Peer-to-peer lending.
Peer-to-peer lending offers the opportunity for people to bypass the traditional bank environment for personal and business loans, and it gives investors the chance to look outside the stock market for investing opportunities. There is a high level of risk, particularly when it comes to investing in certain borrowers, but Millennials seem to like the concept because the potential returns are much higher than they would be with something like a high-yield savings account, and as long as funds are spread out over many loans, the level risk isn’t incredibly high.
Fintech is changing the way Millennials invest and shifting how they view the concept itself, creating not just new opportunities for investors, but new possibilities in technology as well.
One of the biggest questions many people have when it comes to their money and their life is whether a robo-advisor or an in-person financial advisor is right for them.
Each has advantages, but also disadvantages.
There’s no one right answer that’s going to work for everyone in this situation, as with most circumstances involving money, but the following are some criteria and guidelines that can help you determine what’s right for you and your financial needs.
One of the primary reasons many people opt to work with a robo-advisor as opposed to a traditional financial advisor is because of the costs. A conventional investment advisor or wealth manager may charge fees ranging anywhere from 1% to 3% of the value of the portfolio, while a robo-advisor platform generally charges much less.
In fact, according to Investor Junkie, robo-advisor fees may be as low as 0.15% per year. This can have a significant impact on the overall performance of your portfolio.
Objective, Unbiased Advice
Another benefit of opting for a robo-advisor as opposed to a financial advisor? There is often the fear in the financial services industry that advisors aren’t necessarily operating in the best interest of their clients, but are instead working to make themselves money. Some financial advisors work on a fee-based schedule, and what this means is that they often have ties to certain investment vehicles or products, which they’ll recommend above others to make a commission.
Robo-advisors are going to be able to offer a sense of objectivity, although also important to note is the fact that many financial advisors are independent and fee-only, meaning they are objective and offer unbiased advice.
While there are advantages to working with a robo-advisor, there are perks of a conventional financial advisor as well. Financial professionals must usually undergo rigorous training and interview processes when they begin working, meaning they’re good at what they do, highly knowledgeable and able to provide guidance for complex situations that a robo-advisor wouldn’t be able to.
If you are a high-net-worth advisor, are facing a transition in your life, or a business owner, for example, a robo-advisor might not be the best option for your needs.
Investors tend to vary pretty significantly in how they like to approach the management of their assets. There are plenty of investors that enjoy a set-it-and-forget strategy, meaning they can easily turn their money over to a robo-investor and take a hands-off approach.
If you’re on the other side of the spectrum, however, and you enjoy having some level of control over your investments, a robo-advisor probably won’t work well for you.
There’s also a personal element of investing to consider. Do you like the human interaction of working with a financial advisor, or is this something you view as an inconvenience or unnecessary?
The above are just a few of the many considerations to keep in mind as you decide between a technology-driven robo-investing platform or working with a financial professional.
Most of us were raised to believe that bankruptcy only happened to deadbeats and the financially irresponsible. We were raised to believe that bankruptcy was always someone’s fault and that it could easily be avoided. We were also taught that bankruptcy would ruin our financial prospects for most of our lives. The stereotypes we were raised to believe were wrong.
Changes have been made to bankruptcy laws that have made the process easier and something every filer should be able to overcome. In fact, the experts at San Diego bankruptcy firm, Doan Law, say bankruptcy can even improve your FICO score in most cases.
So how does bankruptcy happen?
Today one of the most common impetuses behind filing for bankruptcy is medical bills. People go through an emergency health issue and the resulting bills are too much for them. Even if the hospital is willing to work out a payment plan, the bills are often so large that there is no hope of paying them off within the patient’s lifetime.
It’s true that there are fewer medical-related bankruptcy cases filed these days. The Affordable Care Act (known colloquially as Obamacare) has made healthcare much more affordable for many. It has not, however, completely wiped medical bankruptcies out.
Other Insurance Issues
By now most of you have likely seen the insurance commercial where the agent says that unicorn stampedes are covered by the homeowner’s policy but, unfortunately, flooding is not. Accidents and emergencies that cause significant damage to a person’s home or transportation are another significant source of bankruptcy claims. This is because home and automobile insurance policies are not as strictly regulated as medical insurance companies are now.
These can happen to the best of us and, often, in spite of our better efforts. Consider the following example:
You recently got divorced and you weren’t awarded spousal support or alimony (or, worse, you have to pay it to someone else). It’s not a huge deal. With some downsizing and strict budgeting, you’re sure you can make it work. But life turns out to be slightly more expensive on your own than you had anticipated. People keep wanting you to go out to dinner or take part in other admission-required events. You find yourself pulling out your credit card more than you want to.
Before long, your card is maxed out and your utility bills are due but you can’t pay them because you were pressured into chipping in a bunch of money for a coworker’s baby shower gift. So you opt for a short term loan. The high interest is alarming, but your bank doesn’t offer loans in the small amount you need so you go with what you can get.
Then, when the loan comes due, the interest is more than you thought it would be and you wind up having to take out another payday loan to pay off the first. And then you need to open up a new line of credit to continue paying your utilities and monthly expenses while you use your salary to pay off your payday loans and your rent. And it just keeps snowballing from there.
Then you get downsized and the financial tightrope you’ve been walking gives way. Sure you could go through debt consolidation but that takes forever and you really need the fresh start--especially since most employers run credit checks as well as background checks on potential recruits these days. Bankruptcy is your only option.
This feels like one of those “that will never happen to me” kind of situations but for many it is all too familiar. Some aren’t able to simply move home or in with roommates. Some don’t have family and friends who would be willing to help bail them out.
Another Common Scenario
You made the leap into freelancing! Good for you! You track your earnings and, in spite of your best intentions, everything you earn gets paid right back out toward your rent, utilities and other necessities. And then tax time comes and you find yourself thousands of dollars in debt to your state and the federal government, so you take out a loan to pay that off. The added expense puts more pressure on you to take on more work but that is slow going (this isn’t your fault, all freelancers experience ebbs and flows). You rely on your credit too much to make ends meet and soon your credit has been exhausted and your score is tanked. You can’t get a new loan. You can’t break your current lease. What do you do?
Bankruptcy can happen to anybody at any time. It no longer carries the stigma it used to. Don’t be afraid to use this option if you need to. Better a fresh start than a lifetime of running from collectors, right?
I left Tesco happy the other day knowing that on my next shop I had a voucher for 4p through their price match promise. Though I wasn't happy, I chuckled to myself thinking about how I would spend it and questioned why Tesco had even gone to the effort?
The annoying part wasn't simply the amount, it was the way the whole process worked. Tesco had done the hard work of calculating the saving, why not simply deduct it from my total spend? If I was to buy a pack of Pringles on offer with 50% off I wouldn’t expect to see the saving on a voucher.
Instead they insist on using the 4p to make me return to Tesco on a future occasion. This you could argue is fine and a perfectly valid way to build customer loyalty however instead of simply deducting the 4p from my shopping balance on my next visit or adding it to my Club Card rewards total, I’m reliant on remembering to show the voucher at checkout.
The Club Card is a complex computer system yet it can’t automatically deduct a voucher from my shopping total when scanning my club card on checkout? You could argue that its down to my own stupidity for forgetting to use the vouchers but the point is that all of the elements to the system are already in place and Tesco is simply making the user jump through unnecessary hoops, most likely knowing that they won’t bother with that 4p voucher.
The user experience problems aren't just down to price match rewards, a range of other offers and money off vouchers have to be printed rather than being automatically deducted.
With all the struggles Tesco is going through recently it seems like such a simple change to improve the Club Card experience with users, lets hope when Morrison’s launches its loyalty scheme in the coming months that it doesn’t make the same mistakes.
With interest rates at 0.5% and most highstreet ISAs giving a similar return I've been struggling to find somewhere to save my money.
Zopa's philosophy remains unchanged, you move money into your online Zopa account, set the rates you wish to lend at and Zopa lends your money to people that need it.
When setting your rates Zopa gives you guidelines as to the market rates, these change frequently and I tend to set mine on the high end of the recommended rates. This means my money is lent our slowly however the return rates are higher.
I lend out a maximum of £10 per person hence my maximum exposure per loan is limited. Zopa has a number of markets and you can choose the rates you lend to each one (if at all) A* being the best market and B being the riskier, obviously the rates for the riskier markets are higher.
Through your loan book you can see the usernames of who you lend money to and the reasons, most are for DIY, cars or to consolidate existing debts however you do get some more entertaining ones.
If you need access to your money quickly Zopa has a rapid return facility however you lose a percentage of your earnings by using this.
My difficulty with Zopa came in trying to calculate the percent rate of return over a period of time. Therefore just over a year ago I took the decision not to add anything further into my account.
Over a year long period I could then calculate the years earning as a percent to then compare with other investments.
As a result in this time I had one unpaid load (ie bad debt), once taking this into account and the 1% Zopa fee my return was 5.56%.
Compared to high street ISA's and similar this is a good return.
About two months ago I sold my first website on Flippa.com, a site dedicated to buying and selling websites and domains. Launched earlier this year by a team from the internet resources site Sitepoint the marketplace is like Ebay for buying and selling websites.
The site I sold was www.ipodhistory.com, I originally bought the site from the Digital Point Forums about 18months earlier for $180 (£90 at the time), it was my most expensive site I had bought and was a relatively big gamble. Over the following year and a half I invested in search engine optimisation, added new content and grew a community. In this time I tripled the traffic and advertising revenue.
I listed the site on Flippa and immediately received interest and a number of offers. After around two weeks the site sold for $2000 (£1300). I was paid through PayPal and the transaction went very quickly and smoothly.
You can list sites on Flippa either with an auction style listing or where people submit private bids for a site. Flippa charge a listing fee with various optional extras (about $28 for my site) plus a final value fee of 5% (with a cap of $498).
It's sad to see the iPod History site go from my portfolio but I'm more than happy with the return on investment.
2009 has been a tough year for Bloggers to make money compared to 2008 but there have been opportunities and ad networks have matured to become better accepted by marketers. Gone are the large amounts of money for private ad sales in favor of link exchange agreements and PPC amounts have tumbled.
Here is how some of my sites have fared over the past year for monetization.
Sponsored reviews have fared well in 2009 with advertisers keen to show their products in a natural way to consumers and search engines. They are often criticized for degrading the quality of a blogs content but I've found a sponsored review mixed in between a number of good quality posts to perform well. Strict new rules for Bloggers in the US may mean some good opportunities for non-US blogs in 2010.
Pay Per Click (PPC)
It's been a rough year for Pay Per Click marketing, the amount made per click in 2009 has plummeted on a number of my sites, hopefully 2010 will see the PPC market performing much better.
Google Adsense - Has been a reliable income throughout the year though relies heavily on people clicking high value ads. Adsense performed well on my iPodHistory site before I sold it however has failed to do well on 12stix or ImAFish.
Clicksor - Has replaced Adsense on a couple of sites where they are not suitable for Adsense or have been banned. The amount per click is fairly poor even compared to Adsense.
Monthly ads are where you are paid a set amount per month for an advert though these often base prices on Google Page Rank and Alexa ranking. There are a number of key players:
TNX - Has been a consistent payer throughout the year but relies on paying a small amount for a lot of adverts.
LinkLift - Recently out of beta, LinkLift is one of the newer players but has shown good growth throughout the year.
Linkworth - Advertising revenue has dried up significantly from Linkworth over the past year.
Text-Link-Ads - TLA has paid consistently low amounts all year.
Teliad - Has paid consistently for higher Page Ranked pages.
Private Ad Sales
This time last year there was a lot of money for private ad sales however this has declined significantly. Companies are now turning to link exchange programs rather than paying directly for ads. Even the better paying gambling sites have been cutting back on their advertising budget.
Hopefully we are over the worst in 2009 with the slump in the advertising market. There are plenty of opportunities out there for Blog monetization but Bloggers need to work that extra bit harder to attract the advertisers.
Advertising revenue has been sliding in recent months but has been offset by the weakening dollar. It might be time now to start working on a strategy for increasing advertising through the recession.
The service is simple to install with a small PHP script to embed into your sites template. From there everything is automated. A cost in TNX points is given per page based on page rank but you can still earn from pages without a page rank.
TNX is good for:
- If you have a site with a lot of pages - such as a blog with posts, category pages, monthly archives and pages.
- If you have a site with a good page rank or have page rank on internal pages.
- If you do not want to worry about selling advertising, approving adverts or adding/removing adverts manually from your website.
Payment can be made at any time to your PayPal account.
Payments for the Christmas period should now have been sent out - how well did you do? I was surprised how easy it was to make money without having to do anything! Did you know if you get your friends to sign up through EI42 and they each get their friends to join and purchase through EI42 you can make over £100/month!
Your store should look just like mine below (but with your username)
Now is the perfect time to start recruiting people - then let your friends do all the hard work while you watch their purchases make you cash back!
It's easy to promote your EI42 store:
- Email the address to your friends.
- Add it to your email signature.
- Send it to your friends on Facebook or Myspace.
- Add it as a shared link on social networking sites such as Facebook or del.icio.us
- Add it to your forum signatures.
- Send it to your contacts in Instant Messenger programs such as MSN and AIM.
Good luck and happy earning!
With Christmas coming up now is the perfect time to start pushing your EI42 store. Top retailers such as Amazon, Play.com, HMV, Comet, Dixons, Orange, Toys 'R' Us and Marks and Spencers allow yourself and your friends to earn cashback through EI42.
With the average Cash Back around 5% on a Christmas shop of £1000 you will be saving £50! Now imagine your friends spending that and you earning cash back on their purchases!
If you have signed up already your EI42 shop URL will look like mine below. Now is a perfect time to be emailing it to your friends and family, adding it to social networking sites such as Facebook and Myspace, adding it to your email or forum signature and telling people in the pub!
Happy Christmas shopping and I hope you earn plenty through yours and your friends cash back!