(BPT) - As a volatile market sends ripples through the global economy, many investors are worried about how events overseas will impact their portfolio. In addition, concerns about political instability in much of the world have contributed to a heightened sense of worry and stress among investors. However, while the risks in traditional markets are real, 2016 is full of opportunities for the investor who is willing to think a little differently.
In the face of these uncertainties, the standard advice is for investors to diversify their portfolio. Many have been doing this by taking money out of their dividend-paying stocks and corporate bonds and investing in marketplace lending.
Marketplace lending platforms, sometimes called peer-to-peer (P2P) lenders, are online marketplaces that connect credit-worthy borrowers with individuals seeking investment opportunities. This gives individual investors low-cost access to high-yield consumer loans - an attractive new asset class that was previously only accessible to large institutions.
As an alternative investment strategy, investing in marketplace loans has helped investors diversify their portfolio.
Early investors discovered five secrets that are still the keys to understanding why more people are choosing to diversify their portfolios through marketplace lending. They are:
(BPT) - Grants from individuals and families are the lifeblood of American charities. They accounted for 72 percent of the more than $350 billion in total giving in 2014, according to Giving USA. For their generosity, donors receive both tax benefits and the satisfaction of supporting causes that are important to them.
Charitable giving helps people feel connected to their communities and brings families together through their most deeply held values. Keeping track of giving, however, can be a challenge-- not to mention navigating the tax code. Donors who value convenience, giving power and tax benefits are increasingly turning to charitable accounts, known as a donor-advised funds.
How donor-advised fund accounts work
Contributions to donor-advised funds, which are registered public charities, are treated the same as donations to other public charities and generate an immediate tax deduction. Donors can then take time to make thoughtful giving decisions and grant funds to the charities of their choice over time. In financially challenging years, donor-advised funds can also effectively serve as a savings account for giving, as earlier deposits can be used to sustain annual donations.
Management and processing of contributions, grants and tax filings are handled by the donor-advised fund provider, and donors are able to access details about their accounts at any time. Some providers sponsored by financial services companies also enable donors to view and manage charitable accounts next to their other investment or bank accounts online. This convenience and flexibility helps to facilitate and encourage giving and might explain why donor-advised funds have become one of the fastest-growing charitable giving vehicles according to the Chronicle of Philanthropy.
Advantages of donor-advised fund accounts
Another possible reason for this growth is that donor-advised funds support tax-smart financial planning. Cash contributions to donor-advised funds are deductible up to 50 percent of adjusted gross income. Appreciated securities and other assets are deductible up to 30 percent of adjusted gross income. Appreciated assets that have been held for more than a year may be deducted at their full market value, generally with no capital gains tax obligation. This enables donors to give more than they otherwise would to their charities of choice. Common contributions to donor-advised funds include publicly-traded stock or funds, IPO shares, restricted stock, real estate, interests in private businesses, private equity, venture capital and hedge funds (all accepted on a case-by-case basis).
Many large donor-advised funds have significant experience accepting such contributions, providing a valuable service to charities. Of course, a donor's ability to claim itemized deductions is subject to a variety of limitations that depend on the donor's specific tax situation.
"It is a no brainer for our clients to give appreciated securities instead of cash to charity," says Chris Wheaton, an investment advisor at Litman Gregory Asset Management in the San Francisco Bay Area. "They are typically able to deduct such assets at fair market value and also receive the extra tax benefit of avoiding paying capital gains tax on the sale of the securities." This can increase a donor's level of charitable giving in the short term or allow a donor to maintain their desired level of giving for longer.
Another way donor-advised funds help people increase their giving is through the potential tax-free investment growth of accounts over time. Donors may invest their accounts in a range of pre-selected investment pools and, in some cases may also select a Registered Investment Adviser to actively manage them. At Schwab Charitable, one of the nation's largest donor-advised funds, cumulative investment growth has made $1 billion in additional funds available for charitable giving between the organization's inception in 1999 through June 30, 2015.
The chance to make more of an impact is what really draws people to donor-advised funds, says Kim Laughton, president of Schwab Charitable. "Whether driven by thoughtful planning, smart tax management, or sheer convenience, over 65 percent of our donors tell us they give more as a result of their donor-advised fund account. We are very proud to be facilitating and encouraging greater levels of giving."
To learn more about donor-advised fund accounts, visit www.schwabcharitable.org.
(BPT) - Every year in April, Earth Day encourages people around the world to think about how they can better support the environment. While this is a great reminder to live sustainably, the lessons surrounding Earth Day shouldn't be limited to just one day. In fact, world leaders and A-list celebrities alike are raising awareness about climate change all year round.
While you're probably familiar with common ways to help the environment, you could be doing so much more. Not only should you become more aware of how your daily habits affect climate change, but you can take action at the click of a button to be part of the solution and community of supporters.
Here are some simple things you can do to celebrate the earth year-round and make a lasting impact:
1. Find alternative transportation
Instead of hopping into your car every time you need to get somewhere, think about other ways you could get around. If possible, try riding your bike to work once a week or taking public transportation. See if anyone in your office lives near you. Could you start a carpool? There are so many options available to avoid using fossil fuels that emit carbon.
2. Support a project that verifiably reduces carbon right from your phone or tablet
"Everybody should have the chance to be a part of the solution," says Marisa de Belloy, COO of Cool Effect, an online community that allows individuals to create a tangible impact on climate change. While you'd probably love to get out and plant a tree or install solar panels on your roof, those might not fit into your busy lifestyle. "Even if you are already doing everything you can, you are still emitting harmful CO2 into the atmosphere. Cool Effect provides consistent funding to the highest-quality carbon reducing projects around the world. With projects like Methane Capture in Colorado and biogas in India, you'll know exactly where your contributions go and who they benefit."
3. Maintain an energy efficient home
From energy-efficient appliances to small changes in lighting, there are plenty of options for reducing the amount of energy you use in your home. For example, you can reduce drafts and energy use while improving comfort simply by updating your weather stripping and caulking. You can also help the planet by switching to compact fluorescent lightbulbs. If you've already done your part to make your own home more energy efficient, you can support efforts like this cookstove project in Uganda that is reducing carbon emissions by 58 percent per household by installing smarter appliances that burn less charcoal and wood. Efficiency at home is helpful, but the ripple effect across the globe is even better.
4. Buy local and reduce waste
Shipping burns fuel which releases carbon pollution. You can do your part to minimize this by buying locally as much as possible. Purchase foods that are both in season and grown close to where you live. Head to your local farmers market and you might be surprised at the delicious fresh foods you can find. Additionally, do your best not to waste food. When food gets tossed, it sits in landfills, producing methane while transporting waste creates more carbon pollution.
Don't limit your climate change fight to just one day. You can take action with any or all of these projects and be a part of a greater solution. To learn more, visit cooleffect.org.
From arranging services to dispersing personal possessions to taking care of yourself, it's easy to find yourself in over your head following the loss of a parent or loved one. Here are some common steps to consider when putting their affairs to rest.
3 Ways to Begin Settling a Loved One’s Affairs
(Family Features) Following the loss of a parent, the list of to-dos can feel overwhelming. Not only are you adjusting to life without a loved one, you may be facing a seemingly insurmountable list of tasks. From arranging services to dispersing personal possessions to taking care of yourself, it’s easy to find yourself in over your head.
Especially if the passing was sudden or you didn’t have the chance to discuss the loved one’s final wishes, you may find yourself wondering where to begin. Although the specific details will vary from one family to the next, there are some common steps to consider once the memorial services are over and your attention must turn to putting their affairs to rest.
Learn more about the real estate resources available following a loved one’s death at homevestors.com.
Photo courtesy of Getty Images
(BPT) - Many consumers are trying to be wiser with their credit cards. They avoid splurging on gifts during the holiday season. They don't apply for a store credit card every time they're offered 10 percent off their purchase. Yet hidden charges and overlooked terms and conditions might be covertly padding some consumer credit card balances.
Annual fees are rising. On average, Americans paid more than $17 for these fees last year, up 70 percent from $10 in 2010, according to CardHub.com. Average maximum late fees also have risen to more than $35 over the same period.
"Many people are using credit responsibly - they're working hard to keep balances down, but they may be undermining that effort over time by overlooking the fine print," says Mikel Van Cleve, USAA personal finance advice director.
When evaluating cards for unnecessary fees, he says to first make sure it doesn't charge a fee for something you do often.
"For example, USAA Bank recently eliminated foreign transaction fees on all of our credit cards. If you frequently travel abroad, a card with no foreign transaction fees could provide significant savings," Van Cleve says.
In addition to foreign transaction fees, Van Cleve also recommends keeping an eye on sneaky fee fine print:
Changes in APR. Many cards offer an attractive "introductory" interest rate but may hike the rate up significantly after the promotion expires. If you plan on keeping a balance on the card, make sure you look for a card with a low A PR after the introductory rate expires.
Penalties on late payments. Credit cards often have a penalty APR when you pay late. Check out the terms of your account to ensure you aren't getting an interest rate hike due to a late payment.
Balance transfer fees. Credit cards usually come with a fee to move a balance from another card. Make sure you know the cost of transferring the balance. Often people move a balance to another card with a lower interest only to learn that they've lost the savings to a balance transfer fee.
Reward terms. Understand the terms of your credit card so you don't lose points or cash rewards because of a late payment or expiration date. It's also smart to know what incentives and special offers are available with your card. Focused on airline miles? See if booking hotel rooms and rental cars with your card earns you more miles, for instance.
Hidden costs for cash advances. Some cards have higher interest rates for cash advances than regular purchases. Before withdrawing cash, make sure you know the true cost of getting that extra cash.
This kind of fine print is commonplace, so it's important to understand what fees are on your card and how your spending habits impact the additional fees you can pay. Choose your cards wisely, and you should be able to find a card that fits your needs without paying a fortune in fees.
(BPT) - The average tax refund in 2015 was approximately $2,800 according to the IRS, and similar refunds are expected in 2016. For those getting a refund, there are many options to consider in deciding what to do with this unexpected income. The big question is what is the smartest option?
While you may want to splurge with your refund, careful management for the majority of the funds is a smart financial move. A tax refund or any unexpected income can be used to help reach your financial goals without impacting your current standard of living.
Massachusetts Mutual Life Insurance Company (MassMutual) suggests three things to consider for this year's tax refund:
1. Pay down debt. Take a look at your current debt. Find out which have the highest interest rates and consider paying those down first to help prevent interest from continuing to add up. Another common strategy is to pay off your smallest debt first, then work your way up to the larger ones.
2. Build an emergency fund. Consider using at least a portion of your tax refund to give your emergency fund a boost. Make a goal to stash away three to six months' worth of expenses in cash in an emergency fund you can easily access if you need to, such as a savings account, and use your refund to work toward that goal.
3. Pay the future forward. The positive news is that Americans are living longer. The challenge is that their health may change with aging, and people are now faced with saving for a retirement period of up to 30 years. So if you haven't started to save or want to boost your retirement savings, consider putting your refund in a retirement savings plan. You may also consider taking a portion of your refund for higher education - whether for yourself, a child or grandchild. Or, if you haven't considered life insurance or disability income insurance yet or need to revisit your plans, now's a good time to talk to a financial professional.
A tax refund is money you've worked hard for, and it is OK to do something fun with it. Just make sure you consider committing at least a portion toward your short-term and long-term financial needs and goals.
To learn more about establishing healthy financial goals or to locate a financial professional near you, visit massmutual.com.
(BPT) - We are bombarded with messages about the importance of making healthy choices every single day. While the latest exercise and nutrition trends can be complex and often contradictory, we all know the basics: eat right, stay active. Still, it can be difficult to make healthy choices in the moment.
The stakes of our choices are high. Poor eating habits, overconsumption of unhealthy calories and lack of physical activity can directly contribute to chronic diseases, such as obesity, type 2 diabetes, cardiovascular disease and cancer. And yet, knowing the basics for staying healthy and the possible consequences of unhealthy habits, why do we choose cupcakes over carrots or skip the gym in favor of "just one more" Netflix episode on the couch?
It turns out there is science behind this phenomenon. Behavioral economics and evidence tell us that when making decisions, people are biased toward the present rather than the future. Immediate rewards and benefits often override the potential long-term consequences of our behaviors, such as weight gain or future health problems. The satisfaction of the candy bar today can outweigh the possible effects of an unhealthy diet down the road.
While we can turn to trainers, nutrition experts and medical professionals for valuable advice and resources on how to be healthy, new motivation is coming from an unlikely source: a financial services company. John Hancock has teamed up with Vitality, the leader in global wellness programs, to offer life insurance that rewards policyholders for their healthy habits. Think of the program as a safe driver discount for a life insurance policy - the more healthy activities policyholders complete, the more savings and rewards they earn.
Plus, to offset those naturally human unhealthy impulses, John Hancock adds an extra nudge to help consumers make healthy choices today. By taking small steps with long-term health benefits - such as heading to the gym or getting an annual check-up - policyholders can earn immediate rewards in the form of Starbucks or REI gift cards, hotel and travel discounts, plus up to 15 percent off annual premiums. They'll even get a free Fitbit to help track their progress. And in its second year, the program has added a HealthyFood component. This new feature means policyholders can earn up to $600/year in savings on grocery bills by purchasing healthy foods.
This added benefit is especially helpful given that healthy foods often cost more than less healthy choices. One 2013 BMJ Open study found that on average, healthier diets cost about $1.50 more per day, per person, than less nutritious diets, a number that can add up and lead well-intentioned people to settle for unhealthy purchases at the grocery store.
In addition to rewards and savings, the program helps cut through the cluttered health and nutrition landscape. Individuals can find more than 15,000 qualifying foods at more than 16,000 participating grocery store locations. And with access to nutritional information and guidance from the Friedman School of Nutrition Science and Policy at Tufts University, as well as smartphone apps, online resources and even a user-friendly shopping list tool, it's easy for policyholders to make healthy choices.
Why would a life insurance company want to promote healthy eating? "There is strong evidence that a nutritious diet is one of the most critical components to living a long and healthy life. By providing a life insurance solution that rewards people for making healthy food choices every day - and make it affordable to do - we believe we can help improve and protect the quality of their lives," says Mike Doughty, president and general manager of John Hancock Insurance.
To learn more about John Hancock life insurance with Vitality, visit www.jhrewardslife.com.
(BPT) - "All gave some. Some gave all." You likely hear that phrase around Memorial Day every year, but do you know its origin? Or what Memorial Day is supposed to mean to the veterans who gave some, the survivors of those who gave all, and the Americans who enjoy continued freedom because of those sacrifices?
Americans, it seems, do understand the importance of Memorial Day. A 2015 poll by Rasmussen Reports found 52 percent of those polled viewed Memorial Day as one of the nation's most important holidays, while 42 percent saw it as at least somewhat important.
When Americans first began observing the day in the late 1860s, they were pausing to remember the more than half a million Americans who had died in the then-recently ended Civil War. Today, Memorial Day observances not only remember the sacrifice of the deceased who gave all, but also the thousands of living veterans, many of whom are wounded in body, mind or both.
"Amid the celebrations marking the unofficial start of the summer season, it can be difficult to find meaningful ways to observe Memorial Day," says Jeff Roy, chairman of the board of the Purple Heart Foundation, a non-profit organization that provides counseling, support and advocacy for Purple Heart recipients, and raises funds for programs that support veterans and their families. "But Americans truly do want to express their gratitude to veterans for their many sacrifices. Fortunately, there are many ways they can help make a difference for veterans."
Here are some meaningful ways you can show your support for veterans this Memorial Day:
* Help provide a service dog to a veteran with physical disabilities or PTSD. The National Education for Assistance Dog Services (NEADS) provides service dogs for free to qualifying veterans. You can help by making an online donation, sponsor a "doggie dorm" for service dogs in training, raise a puppy who will become a service dog, or become a volunteer. Visit the organization's website at www.neads.org to learn more.
* Donate to the Purple Heart Foundation's scholarship program, which provides financial support to Purple Heart recipients and their families for college-related expenses like tuition, books, and room and board.
* Instead of spending the day indulging in your own cookout, contact the local veterans' home or veterans' hospital and volunteer there for the day. Or, you can simply take an hour or two to visit with the residents there and thank them for their service.
* Visit the local cemetery and place flags or flowers on the graves of veterans. Contact the cemetery
first for their visiting guidelines and to learn where the veterans section is located - many cemeteries have special sections set aside for veterans.
* Help ensure veterans make the most of the services available to them. Donate to the Purple Heart Foundation's National Service Officers Program, which helps pay to place service officers in Veterans Administration facilities across the country. These officers are specially trained to help veterans access the many benefits, programs and services available to them.
* If your community sponsors a Memorial Day parade, attending is a great way to show your appreciation and support for veterans - but you can do even more. Prior to the event, contact the parade organizers and find out what veterans groups will be marching in the parade. Offer to donate water, snacks or anything else the veterans may need to make their walk easier and more enjoyable.
* Pick up the phone and call the veterans in your life - almost everyone knows at least one person who has served in the military. Perhaps your grandfather served in World War II, the Korean War or Vietnam. You may know someone who has recently returned from serving in the Global War on Terror. Take some time to let those people know you're thinking of them, and appreciate their service.
* Observe the National Moment of Remembrance at 3 p.m. on Memorial Day, Monday, May 30. Established by Congress, the one-minute observance is an chance for all Americans to pause in the middle of their summer celebrations to remember the sacrifices of the nation's veterans.
From simple and small to noble and industrious, it's possible to find many meaningful ways to honor all who gave some and the some who gave all. And as for that now-famous phrase - it was first uttered by Howard William Osterkamp of Dent, Ohio, a Korean War veteran and recipient of the Purple Heart.
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