Three Ways to Play with Money for Prizes that Aren’t the Lottery

lotto-484801_1280

January 9, 2016, was a pretty historic day for America. The largest grand prize in Lottery history—$1.5 billion dollars—was divided between three winners. Of course, millions of others were somewhat disappointed with the results.   If you played for this historic lottery jackpot, your imagination probably went wild with the possibilities of how life would be soooo much better. Win or lose, everyone who bought a ticket gained….gained a moment to dream of what could be! Regardless of “Experts” reminding us how slim the odds of winning, you got to dream without boundaries. Dreaming is not only fun, it’s important. There is no point to life if we are not dreaming for something better. Humans are just built that way. That’s a good thing! Here’s a great tweet from two days before the final Powerball drawing that sums up this sentiment pretty well:     The day after the drawing we all resumed our lives as they are. Here’s the $1.5 Billion Question…did you write down even one of those dreams? No. Why not? What if instead of reducing your dreams to chance you actually decided to take charge! What if you simply decided “there is no better time than now to start towards the life you dreamt of”. Here’s how to get started today:

Three types of Savings

1)    What just happened savings. This is money for emergencies in a savings account.

2)    What do I really want savings. This is money to get what you really desire.

3)    What the hell money. This is lotto ticket (or whatever) money.  

1 & 3 aside, let’s focus on how you might realize your dreams (2)…

 

Three Ways to Play with Money for Prizes that Arent the Lottery

First Way: Mutual Fund Saving money in a mutual fund might not be as sexy as the lottery, but the thrill of watching the price of your lottery ticket multiply is still there, it just takes longer. Even if it seems like it’s “just two dollars,”Powerball tickets add up just like everything else, and if you buy one a day, you’re spending about $50 a month. According to a great article from Money Under 30, here’s what will happen if you put $50 a month into a mutual fund: Screen Shot 2016-01-21 at 5.38.02 PM

 

A $68,000 jackpot doesn’t sound too bad, right?

Second Way: PLS Accounts Are mutual funds not enough of a gamble? Try opening a PLS account, which is just like a normal bank account except that the interest accumulated by all accounts is pooled and randomly awarded to one of the account holders. So, even though you’re in the running for that mouth-watering pot of gold, you’re also saving money for your future. Double fun!

Third Way: The Stock Market First, read this heartbreaking story of a man near retirement age who sank his entire retirement fund of $450,000 into Powerball tickets (without telling his wife). Needless to say, he didn’t win, even though he was able to buy 225,000 tickets. But with the odds at 1 in 292 million for the January 7 drawing, his odds were reduced to 1 in 1,298, which is another way of saying he had a 00.1298 percent chance of winning. If you’re committed to throwing your money away on a wild dream, maybe you should try the stock market. According to Market Watch, there’s a 66.1 percent chance the market will rise in 2016. Even if you’re buying stock by throwing a dart at a copy of the Wall Street Journal, your odds are a hell of a lot better of making money. And, even if the stock’s value drops you still own the shares purchased. Eventually it will rebound unlike the possibility of resurrecting that losing lotto ticket.

 

At the end of the day DREAM! Plan methodically but, Dream fearlessly! Let us help. For financial advice, turn to Earn It Use It–we’re here to help you make your dreams come true. list-800759_1280

New Year’s Resolution: Make a Financial Plan

new-years-day-1054594_1920

New Year’s is a strange holiday. New Year’s Eve is the biggest party night of the year, with sequins, champagne, fireworks, and Great Gatsby-style excess. You stay up all night drinking, dancing, and counting down the clock, and then the next morning you make New Year’s resolutions to give up sugar, quit smoking, keep a diary, or the ever-popular “save money.” And if you’re like most people, you’ll probably remember that party longer than you will your resolution.

Only 8% of the people who make resolutions keep them. And after “lose weight” and “get organized,” “spend less and save more” is the third most popular resolution, meaning that there are a lot of people out there setting financial goals right now that they aren’t going to achieve. Don’t be one of them!

How can you be among that 8%? Take action, try something new, and don’t give up! And if your New Year’s resolution has anything to do with your finances, the first step you need to take to succeed is creating a financial plan.

Don’t know the first thing about financial planning? That’s where we come in! The Earn It Use It e-book series will give you all the tools you need to learn how to manage your money, save and invest effectively, and understand all the financial concepts that seem so intimidating at first. Each lesson will take you under an hour. Sit down with our e-books this January and create a plan in the span of an afternoon that will make your money in 2016—and the rest of your life—work as hard as possible for you.

Earn It Use It has currently released two e-books you can complete in 59 minutes, one on profitable investing and one on how to plan for your financial freedom. If you’re not sure Earn It Use It is for you, check out the book previews or download our free introductory e-book—you’ll see how easy and accessible we’ve made financial planning!

Happy New Year, and we hope you’ll be among this year’s 8%!

How (And Where) to Open Your First IRA

writing-828911_1920

In our last post we discussed how opening a Roth IRA is the best way to save for financial independence if you don’t have a 401(k) through your employment. But how do you actually open one? 

Most millennials understand how to open a bank account but don’t quite know how to buy shares in the stock market. If this describes you, then you definitely have enough knowledge to open an IRA because the process is kind of halfway between the two. 

So Where Do You Go?

Like a bank account, you can just walk into pretty much any bank and ask to open an IRA. But you can also walk into what’s called a brokerage firm (or find one online). These are financial institutions that are kind of like riskier banks—simply put, you bring them your money, they invest it on your behalf in stock and/or bonds, and hopefully the market is strong and your money grows a lot more quickly than it would in the bank.

Risk Versus Reward

So here’s the thing: as in all investments, the more you risk, the more you stand to gain—or lose. Opening an IRA with a bank is “safer” than going with a brokerage firm because banks offer Certificates of Deposit (CDs) that are protected by the FDIC for up to $250,000 if the bank fails. If you’re worried about the economy collapsing, make sure you’re getting a CD from a bank for your IRA.

If you’re not worried about a financial apocalypse, though—and you really shouldn’t be—you’re better off investing with a brokerage firm when you’re young. After you’re in your forties or fifties it would be wise to move your investments to something safer, but now is the time to take risks that will pay off.

Of course, a Roth IRA isn’t like gambling on the stock market. Even though your money is invested in the market, it’s invested in a number of different stable stocks to prevent any kind of all-or-nothing crash. To be even safer, you can invest in mutual fund families—a type of brokerage—that give you less control over your exact investment choices but an even more stable and diversified portfolio.

What You Need

Not much! Like we just said, opening your IRA is almost as easy as opening a bank account—that is, after you’ve made your decision as to whether you’ll go with a brokerage, mutual fund family, or bank, and which company particular sounds like the best fit. After you know where you’re going, all you need is:

  • Social Security Number
  • Bank Account Information
  • Employment Information
  • The minimum initial deposit amount (this can be anywhere from nothing to thousands of dollars, so pick something that works with your budget)

A Roth IRA might be the cornerstone of your future. Sit down and make a financial plan with the help of our easy and quick e-books to learn more about how to manage your retirement, savings, and investments—for more about IRAs, we recommend either our 59 Minute Retirement Plan or our 59 Minutes to Profitable Investing.