Today I thought I would talk about something a little different than the usual because it is a good chance that many of you readers are like me and still are attending college and looking for possible job opportunities after school is all finished. So because we are a financial blog… you guessed it these are all going to be different financial jobs that may or may not require certain amounts of schooling, different degrees and varying levels of experience.
The information I am using for these positions regarding salaries, education levels, and some of the general duties listed has come from the United States Department of Labor’s website and the correlated links for each of these positions is under the position for your convince to gain a more detailed description for each position.
Bank Teller: Are the people who work at the front of the banks normally who take customer deposits and make the transactions. Other duties may include issuing traveler checks, collecting payments, balancing the cash drawers, etc…
Required Education: High school diploma or equivalent
Loan Officer: Also often work in banks and other financial institutions to speak with potential loan borrowers. Their duties include working with the borrowers to help acquire loans for personal needs and evaluate what amount they qualify for, and recommendations on how to get loans for real estate, vehicles, and business’s, etc…
Required Education: Bachelor’s degree, or several years of bank experience
Accountant and Auditors: Most work from the office, although some are able to work from office in their home. Accountants and Auditors are there to ensure that businesses and individuals keep accurate financial statements that comply with regulations and laws. They work with companies to find ways of reducing company costs and improve profits.
Required Education: Bachelor’s Degree in accounting or similar field
Personal Financial Advisor: Mainly work for financial and insurance companies or often may be self-employed. Duties are to meet with clients in person and come up with a detailed plan that covers clients financial goals, educate clients and answer investment questions, help plan for unplanned circumstances.
Budget Analysts: They are the people who help public and private companies organize and manage their finances. The duties they perform include creating and discussing how to stick to a budget with organizations, estimate future financial needs, inform program managers of status of the funds, etc…
Financial Analyst: They primarily work in offices in large financial institutions but frequently travel to their client’s location. Their main duties are to recommend to individuals or business where to invest their portfolios, study economic trends, prepare and present reports, etc…
Required Education: Bachelor’s Degree (MBA in finance)
Here are just 6 of the many jobs that you can look into if you are interested in a financial job. I would encourage you all to go and look for more if you are interested this is good information. This website has been very helpful for my own use as well as it has many different positions in and out of the financial field. Just remember while looking it is always a good thing to first figure what your interests are and then research from there.
The Dow Jones Industrial Average (DJIA) has averaged around a 10% return in the past 100 years.
Lots of people are terrified when it comes to investing in the stock market. Interestingly enough, the market has averaged about 10% over the past 100 years. This includes two world wars, numerous recessions, hyperinflation in the 1970’s, the September 11th terrorist attacks, and the housing collapse of 2008.
A study in Ray Levitre’s Book, “20 Retirement Decisions You Need to Make Right Now” shows that in the past 20 years, the average investor had a return of only 1.87% a year (1989 – 2008). Why is this happening if the market is averaging almost ten times that amount? Below are the ten most common mistakes investors make that drastically lower their returns.
Excessive Buying and Selling – Investors that trade frequently more often than not will underperform the market compared to those that simply leave their investments alone.
Information Overload – Studies have shown that investors who are regularly checking how their investments are doing will more likely panic when they go down vs. those who check their investments every few years. This leads to excessive buying and selling mentioned above.
Market Timing – Many investors find it exciting to guess when the market is going to go up and down. Unfortunately for them, this is nearly impossible to do. If an investor was to only miss the 10 best days in the S&P 500 Index fund from 1984 to 2008, they would have returned only 4.10% compared to 7.06%.
Chasing Returns – Many investors are famous for purchasing last year’s winners. More often than not, last year’s winners will be this year’s busts so be careful.
Believing Persuasive Advertising – In our technology era, companies will do almost anything to get your business, even if they don’t have the best options. Do your research and find which investments are truly best.
Poor Diversification – Not diversifying properly will raise the risk of losing one’s money. For example, if an investor had $100,000 Lehman Brothers stock in 2008, their portfolio would have only been worth $820 after all was said and done. Ouch.
Lack of Patience – Most funds and equities are held for an average of three years. Remember, investing is a long-term process, so do not panic if you are not doing well. Look at the big picture.
Not Understanding the Downside – Some investors believe their portfolios will go up, and only up. They are in for a rude awakening when the market moves into a recession. After this happens, the investor will tend to sell their stocks and re-enter the market once it’s “safe” again. This will have dire rate of return consequences.
Focusing on Minimal Portions of Portfolio – Some investors will be spooked when a small portion of their portfolio is drastically getting beaten. Because of this, they will sell all of their assets and move to more conservative options (even though the rest of their portfolio is doing quite well). Once again, look at the big picture.
Lack of Investment Strategy – If you do not know where you want to go, can you really get there? Create a great investment strategy to make sure you are as successful as possible.
The Personal Money Management Center is honored to announce that two lucky students can buy several chicken dinners with their winnings from our 12-Week Money Challenge! That’s right, $234 worth of chicken…or…you know, they could, like, keep saving it or something. Right?! Either way, we matched 3 to 1 their savings during our 12 week challenge leaving them three times as rich!
Our goal was to help students realize that frequent small savings easily add up. The best way to tackle a large savings goal is just to commit to a little at a time. So don’t worry if saving up 5-10% of your income for an emergency savings seems overwhelming. Start slow with a set amount transferred to your account every paycheck automatically. Before you know it, you’ll have a substantial amount of money stashed away for emergency expenses. Luckily for these two winners, they received a nice boost in their balance from us!
What’s that? You didn’t know we were giving away free money? Sorry about that, better luck next year! So keep your eyes open for opportunities to grow your savings. Better yet, sign up for our newsletter to stay up to date on all of our contests and events. You can do that here: http://personal-money-management.utah.edu/forms/newsletter-list.php
Your credit score can affect many parts of your financial life. And while the large majority of consumers have basic knowledge about credit scores, there are a few knowledge gaps according to the Consumer Federation of America’s latest survey findings:
Only 42 percent know that a credit score measures the risk of not repaying a loan rather than factors such as knowledge of, or attitude to, consumer credit.
Only half of consumers (50%) understand the three instances when lenders who use generic credit scores are required to inform borrowers of the credit score used in the lending decision – after application for a mortgage loan, whenever an application for a consumer or mortgage loan is rejected, and whenever the best terms, including lowest interest rate available, are not offered on a consumer or mortgage loan.
To encourage more individuals to increase their credit score knowledge and complete the quiz at CreditScoreQuiz.org, Vantage Score and Consumer Federation of America (CFA) are offering those who complete the quiz the opportunity to enter a drawing for a $500 gift card. The 20 –question interactive quiz allows consumers to test their knowledge of credit scores and receive the correct responses with explanations. The quiz is available in both English and Spanish.
CreditScoreQuiz.org is an informational tool developed by the Consumer Federation of America (CFA) and VantageScore Solutions. The two organizations developed the credit score quiz and website to increase consumer knowledge about credit scores and how to improve them. Since 2011, they have asked the Opinion Research Corporation to administer this quiz annually to a representative sample of 1,000 adult Americans. The quiz results indicate that many Americans could improve their credit score knowledge and ability to manage their scores. They encourage individuals to take this quiz and urge teachers and other educators to utilize it in their financial education programs.
If you are like me, a poor college student that doesn’t have school payed for, you would be interested in what I have to say. Yes there are grants that are given out every year but if you don’t qualify it can be frustrating, trust me! Let me give you scholarship websites that are great for matching money to you.
All of these websites let you add in personal information so that you can be matched to the scholarships you qualify for. Also most of these websites have filters, if you want scholarship applications that don’t require an essay you can filter that!
There are many scholarships out there that support diversity, unlucky for me I don’t qualify for a lot of those.
There are also a lot of scholarships that are picked based purely on a random drawing, they are the most simple to apply for but you don’t really get to sell yourself!
If you have spare time, go ahead and apply for as many scholarships as you can using these easy websites!
So what is a 401(k), IRA or Roth? All of these numbers, letters and words can be scary and overwhelming. Basically, these are all just different types of requirement accounts. We will break down each account to help you decide which account is best for you.
A 401(k) is a basic retirement savings account that many employers offer. This account is a “defined contribution pension” where you invest towards your own retirement instead of your company providing a pension. Typically the way this works is you decide how much of your salary you will put into this account each year and the money in the account is invested. This contribution also reduces your income that is taxed so that you owe fewer taxes now. The catch to this type of plan is that you will pay tax on this money in retirement when you begin taking payments from this account. With this type of account, you are deferring your taxes until you retire. At age 70½ or the year after you retire, you will have to begin collecting payments from this account. Some jobs will offer a “match” where you can contribute a percentage of your salary, and your company will match some portion of that percentage.
With this solution your retirement may be so far ahead in the future that it is impossible to predict what your tax bracket will be, at what age you will retire, or if your state will even tax income.
You cannot take the money out before you turn 59 ½ or you will have to pay a 10% penalty on top of regular income taxes on this money.
You will have less money in retirement (compared to investing in a Roth) if you are in a low income tax bracket now and are in a higher tax bracket at retirement.
The Bright side
You and your spouse can each contribute up to $17,500 to this type of account in addition to contributing to other retirement accounts like a Roth.
It is portable. You can switch jobs and roll it over into another account and take it with you. This contrasts a company defined benefit pension that pays you money based on how long you work at a company.
This is a great option to save for retirement if you cannot afford to both contribute to a retirement account and pay the taxes on your full current income. By contributing, you basically put off paying your taxes until you take the money out at retirement.
If you plan to retire before you turn 70 ½ and have little income, you will likely be in low tax bracket which makes this option attractive especially if you are currently in a high tax bracket.
If your company offers a match, you are getting free money to retire on! Even though you will pay taxes later, the money that your company contributes will cover your taxes and you will still have some of their money left over. If your company offers a match, take advantage of the full match before contributing to a Roth.
An IRA is a retirement option that your employer may offer or that you can open at most financial institutions. A traditional IRA is very similar to a 401(k). When you contribute to an IRA you get a break on taxes now and then pay taxes when you pull the money out. You will then pay taxes on every dollar you take out, which will include all of the growth and compounded interest from the account.
Unlike a 401(k), IRA’s have a maximum contribution limit of $5,500 per person. This is the maximum you can contribute to any type of IRA. If you have any combination of a Roth, a Simple IRA (where your employer matches your IRA) or a traditional IRA, the sum of all of these account contributions cannot exceed $5,500 per year.
If you are married and make over $191,000 or are single and make over $129,000, you cannot contribute to this type of account.
You have to start taking payments out of your account (called distributions) starting at age 70 ½ which means if you are still working, your taxes could be really high if you are in a high tax bracket.
To withdraw money penalty-free, you have to be age 59 ½ and that your first contribution be five years before the distribution begins.
The Bright side
If your employer doesn’t offer a 401(k) then you can still save for retirement by opening an IRA and you can do so at bank, credit union, or investment firm.
You can save for retirement even if you can only afford to contribute a small amount each month. This is because you get a tax break now which helps you save more money (like a 401k)
A Roth IRA is a retirement account that you hold with your employer or on your own. The difference between a Roth IRA and any other type of retirement account is the way that this account is taxed. You are not given any tax break now and you will still pay your full income tax on any money that you earn and contribute. This account has already paid its taxes once and will never be taxed again. That means that all of your growth and the magic of compound interest will be yours forever.
Similar to the traditional IRA, there is a maximum contribution limit of $5,500 per person. This is the maximum you can contribute to any type of IRA.
With a long term projection of how much money you will earn in Roth IRA versus a 401k or IRA that your company matches, the IRA/401(k) with a match wins out.
To withdraw money penalty-free, you have to be age 59 ½ and that your first contribution be five years before the distribution begins.
The Bright side
Roth IRA’s do not have a minimum distribution requirement. This means at no point in your lifetime will you be forced to take money out of your investments. This is because the government has already taken their share and has no further interest in the account.
If you are age 50 or older, catch up rules apply allowing you to contribute extra money to your IRA.
Money can be withdrawn penalty-free to cover first time home buyers costs and other qualified expenses (not that we recommend this).
So how do you decide?
Consider all of the options. If your employer matches in any of these accounts, take the full match first. If you have money left over, consider a Roth but use your current tax bracket and future predicted tax bracket to really think about it. I used my current income and tax bracket with my future predicted tax bracket and plugged it into this calculator. You can see my results.
For me, the calculator says I would be better off with a traditional IRA. The difference between the two was only $1,500 which is less than a 2% gap. I am fortunate to make enough money with my spouse that I am in a pretty high tax bracket and I also qualify for good tax breaks that this calculator doesn’t factor in. In the long run, 2% isn’t a big enough deal to pull you hair out over. For my retirement, I’ve decided to hedge my bets and put 50% into a Roth and 50% into a 401(k), making sure that I take advantage of my entire 401(k) match. I am young and I can afford to start off risky/aggressive with the funds I choose and a target date fund is a good way to go because it becomes more conservative as you age. I can always change the proportions I contribute to each account and my investing strategy. Hopefully this will help you navigate the confusing world of retirement planning and help you make an informed decision on saving for your future.
Having a credit card has become quite the norm now days. I mean how often do you see people actually paying with cash anymore? Okay maybe sometimes but most often we always see and even ourselves use a card to pay for things. Many people have different views and opinions about credit cards, which I am sure you have all heard about. But credit cards have now basically become a necessity for anyone trying to rebuild a credit score or for someone who is trying to start building credit. Here are a few rules and reminder to keep in mind while using yours:
Credit cards are just like borrowing a loan. Remember that when using your credit card. Think of it like you are borrowing some money from a bank and you are going to have to pay them back and they most likely are going to tack on a little bit of interest.
Keep track of how much you spend each time you use the card. Not keeping track of each purchase can push you over your own personal budget. Most of us tend to think that because money does not come directly out of our checking accounts we spend more than we have.
Save your receipts or view the transaction history from your account. It is not impossible for an extra charge or random late fee to show up on your credit card. Keeping your receipts shows the real transaction that occurred. It is a good habit to add up amounts on receipts and then check them with your monthly credit card bill.
Check your card status monthly to make sure you have not been a victim of fraud or credit card theft. It is a problem that is unfortunately becoming much more common. They also have other ways you can protect this from happening like getting your picture on your card for example.
Don’t share your card or account information with anyone. You don’t know what they will buy and if they will be sure to pay the bill back on time. Credit cards affect your credit score and you wouldn’t want to have it damaged because of the time you let your friend borrow your card.
If possible when paying your credit card bill try to pay more than the minimum amount due. This way you are going to be saving yourself some money by paying less interest because you will finish paying off your amount sooner than if you pay minimum amount.
Be sure that you pay your bill on time, and in full when possible. If you don’t, you’ll have to pay back finance charges and it could damage your credit score.
Destroy old and expired cards. Don’t hang on to the ones that you can no longer use either cut them up or use a shredder to get rid of the card.