Posts by SmartAsset Team
Investing for Beginners
What Is a Cash Dividend and How Does It Work?
A cash dividend is a payment that a corporation makes to its shareholders, typically drawn from the company’s earnings or profits. These distributions, paid on a per-share basis, give investors a tangible return on their investment. Cash dividends can be a reliable income source, appealing to investors seeking steady financial gains from their stock holdings.… read more…
Financial Planning
13 Important Benefits of Saving Money
Saving money is a fundamental financial strategy that offers numerous advantages, contributing to both short-term stability and long-term security. The benefits of saving money extend beyond the obvious ability to handle emergencies, encompassing opportunities for investment, debt reduction and financial independence. A robust savings account offers peace of mind and prepares individuals for unforeseen expenses,… read more…
How to Invest
How to Find Lost Savings Bonds
If you’re wondering how to find lost savings bonds, you’re not alone. Luckily, reclaiming them can be relatively straightforward if you know where to look. Finding lost savings bonds may require you to use the Treasury Hunt tool, contact the U.S. Department of the Treasury or potentially hire a professional to help. Rediscovering these hidden… read more…
Mortgage Basics
How to Calculate Your Housing Expense Ratio
Your housing expense ratio, which compares your housing costs to your gross monthly income, tells you what portion of your earnings goes toward housing expenses. Understanding this ratio can help you decide whether your housing costs are within a manageable range and make informed choices about your financial health. To determine your housing expense ratio,… read more…
Investing for Beginners
Gross Expense Ratio vs. Net Expense Ratio
There are two key metrics when considering the costs associated with mutual funds and exchange-traded funds (ETFs): the gross expense ratio and the net expense ratio. The gross expense ratio includes all fees and expenses incurred by the fund, such as management fees, administrative costs and operational expenses. While the net expense ratio reflects the… read more…
Financial Planning
9 Techniques for Saving Money Long-Term
Saving money long-term requires a combination of discipline, strategy and practical money-saving techniques like setting clear financial goals, creating a detailed budget and prioritizing expenses to minimize unnecessary spending. Additionally, automated savings plans, investing in low-risk assets and taking advantage of tax-advantaged accounts can significantly enhance one’s ability to save effectively. Adopting these money-saving techniques… read more…
Tax Credits & Deductions
What Is the 2024 Federal Solar Tax Credit?
The Federal Solar Tax Credit, also known as the Investment Tax Credit (ITC), provides an up to 30% tax credit for the costs of adopting solar energy in the United States. The credit applies to new solar photovoltaic (PV) systems and expansions of existing ones, reducing the overall installation cost by nearly a third. This… read more…
Savings Accounts
CDs vs. High-Yield Savings Accounts: Which Should I Get?
Certificates of deposit (CDs) and high-yield savings accounts are two popular options for savers looking to earn more interest on their money. Both offer higher returns compared to traditional savings accounts, but they come with different features and benefits. Understanding the distinctions between these two financial products can help you decide which one fits your… read more…
Other
How to Open a 529 College Savings Account
A 529 college savings account is a powerful tool for families looking to save for future educational expenses. These state-sponsored accounts offer tax benefits and flexible investment options to help make saving for college more manageable. By understanding how to open and manage a 529 account, you can take proactive steps toward securing your child’s… read more…
Social Security
Can I Collect My Spouse’s Social Security Before They Retire?
Yes, you can collect your spouse’s Social Security benefits before they retire — but there are specific conditions and limitations to consider. The primary requirement is that your spouse must be eligible for retirement benefits and have filed for them. If you are at least 62 years old, you may qualify for spousal benefits, which… read more…
Portfolio Management
What Does It Mean If an Investment Portfolio Is Balanced?
Creating a balanced portfolio is a key investment strategy that aims to manage risk and optimize returns. By incorporating a diverse mix of assets such as stocks, bonds and sometimes alternative investments, a balanced portfolio helps spread risk across multiple asset classes. This approach not only minimizes the impact of market volatility but can help… read more…
Investing for Beginners
How Do You Cash in Savings Bonds?
Cashing in savings bonds is a straightforward process that can be done at most financial institutions or, if you have electronic savings bonds, even online. This article will break down the basic steps to process your request and get the funds deposited into your account. But, if you want hands-on advice about how bonds could… read more…
Investing for Beginners
How Preferred Stock Dividends Are Taxed
Preferred stock dividends are taxed differently than other investment income. Generally, these dividends are classified as either qualified or non-qualified. Qualified dividends are taxed at the lower capital gains rates, which can range from 0% to 20%, depending on the investor’s income bracket. Non-qualified dividends, on the other hand, are taxed at ordinary income tax… read more…
Real Estate Investing
8 Types of Commercial Real Estate Investments
Commercial real estate offers many investment opportunities, from office buildings to retail spaces, industrial properties and multifamily apartments, as well as specialized properties like hotels. Each investment has specific benefits and drawbacks, so knowing the differences can help you make informed decisions. If you’re interested in investing in commercial real estate, a financial advisor can… read more…
Real Estate
What Is the Buy-and-Hold Real Estate Investing Strategy?
The buy-and-hold real estate strategy is a long-term investment approach that buys properties and retains them for an extended period, thereby generating consistent rental income and benefiting from property value appreciation over time. By maintaining ownership, investors can leverage tax advantages, build equity and create a stable, passive income stream. If you’re interested in real… read more…
Portfolio Management
How to Diversify Your Retirement Investment Portfolio
Creating a diversified retirement portfolio can spread your investments across different asset classes with the goal of reducing risk and enhancing returns. A mix of stocks, bonds, real estate and other assets could allow you to better withstand market fluctuations and stabilize your financial future. Here’s what you need to know. A financial advisor can… read more…
Real Estate
Real Estate Syndications vs. REITs for Investors
For investors seeking exposure to real estate, understanding the differences between real estate syndications and real estate investment trusts (REITs) is key. Real estate syndications involve pooling funds from multiple investors to purchase properties, offering direct ownership stakes. In contrast, REITs are companies that own, operate or finance income-generating real estate, allowing investors to buy… read more…
Real Estate
How to Use Cost Segregation to Defer Taxes on Real Estate
Cost segregation in real estate is a strategic tax planning tool that can allow investors to accelerate depreciation deductions and thereby defer taxes. This strategy is typically used for properties that produce taxable income and not those that operate a loss. By identifying and reclassifying personal property assets like fixtures and fittings from real property,… read more…
Mortgage Basics
Can You Deduct Mortgage Interest on Rental Properties?
Owning rental properties offers various tax benefits, including the ability to deduct mortgage interest on those properties. This deduction allows landlords to potentially reduce their taxable rental income by the amount of interest paid on the mortgage, potentially leading to significant tax savings. To qualify, the property must be rented out or available for rent,… read more…
Personal Finance
How to Build a 5-Year Financial Plan
While short term in duration, building a five-year financial plan gives you a structured approach from which you can manage your finances in pursuit of your chosen life goals. Whether it’s aiming to buy a house, saving for higher education, or building an emergency fund, a five-year financial plan can help you make financial decisions… read more…
Personal Finance
How to Build a 10-Year Financial Plan
Creating a 10-year financial plan requires a long-term view. Planning a decade into the future could encompass goals like buying a house or sending a child to college, but such a length of time will also be key to your lifelong financial health and stability. It will not only impact your retirement, but can also… read more…
Financial Planning
Financial Planning for Newly Married Couples
Starting a new life together brings excitement and new responsibilities, making financial planning for newly married couples an essential step. This phase is the perfect opportunity to align your financial goals, create a budget and establish a solid foundation for your future. From merging finances to planning for major milestones, understanding the basics of financial… read more…
Career
Financial Management: Definition, Examples and Purpose
Financial management involves planning, organizing and controlling an organization’s financial activities. Effective financial management helps businesses achieve their goals, optimize profits and maintain sustainability. Financial management professionals engage in budgeting, forecasting, investment analysis and financial reporting – each serving the purpose of guiding a company’s financial decisions and strategies. Through comprehensive financial management, businesses can… read more…
Pensions & Other Retirement Accounts
My Dad Passed Away. How Can I Access His Retirement Funds?
When faced with the death of a parent, many find themselves asking whether they can claim their parent’s retirement funds. Accessing your father’s retirement funds can depend on various factors such as the type of retirement account he held and whether you are a named beneficiary. Typically, accounts like IRAs or 401(k)s allow for beneficiary… read more…
Investing
What Is the Formula for Variable Expense Ratio?
The variable expense ratio is a financial metric that helps businesses understand the relationship between their variable costs and sales revenue. By dividing total variable expenses by total sales, this ratio reveals the proportion of revenue consumed by costs that fluctuate with production levels or sales volume. This insight helps companies make informed decisions about… read more…