Real Estate Investing for Beginners

By Eddie V. — Published March 08, 2018

Buying and investing in the real estate market is quite a complex endeavor when compared to the stocks and bonds market. It is also not as simple a notion as finding a new home. Real estate has risen in popularity over the recent years as a solid investment option. A lot of changes have taken place in the market place that have made it more complicated than simple ownership of property. Read on further to know more about real estates as an investment tool.

Rental properties and real estate trading groups
Similar to the age-old practice of land ownership, a person buys a property and rents it out. The owner then collects a monthly rent from the tenants. Apart from the mortgage, loan payments, and property taxes, the landlord is also responsible for the maintenance of the property. Hence, landlords charge enough rent in order to make up for these expenditures. One may also choose to charge extra and earn a monthly profit. However, a safe long-term practice is to not do so as when the loans and mortgages are paid for, the maximum portion of the rent then turns to profit. The value of properties fluctuates according to infrastructural developments and market conditions. The owner of a property might discover that the net value of his/her premises is much higher than the original price. The landlord can then choose to sell the house for a net profit. Consequently, the value of a house can also decrease, but as long as there is a strong source of rent, making a long-term profit will not be too difficult.

While this may sound like a safe and stable investment option, there are certain risks involved. Having an unstable tenant might result in property damages, non-payment of rents or inconvenience to the neighbors. Due to locational disadvantages, one might find no tenant at all. The property then sucks in capital instead of generating it. Picking the right kind of property in areas with low vacancy rates is the key to acquiring a proper rentable house. Owning a property requires a lot of personal time and investment as compared to owning a stock or a bond. Many real estate traders choose to invest in the interiors of the property, thus raising its value and appreciation. It can then be sold or rented out at a higher price.

Real estate trading groups operate in a fashion similar to mutual funds. If you want to avoid the regular hassle of being a landlord, then this option might be for you. This is how it works. A group or a company buys or builds a set of apartments or properties. It then provides a counter for investors to buy the properties through them. The mutual investors thus enter into a group. One can own single or multiple properties from the options available. It is the company that manages the premises, advertises for vacancies, and interviews tenants. In exchange for these services, the company charges a monthly percentage of the rent.

Providing leverage
Most mortgages require a 25% percent down payment. This results in the complete ownership of the properties at a fraction of the price. The routine payment of mortgage ensures the full payment of the property. However, investors and landlords can choose to take out a second mortgage on their current property and make payments for other properties. They can then wait for an opportunity to sell them at a profit or give them out to tenants.

Some parting advice…
One never owns a real estate in one’s original name. To mitigate risk, one makes use of legal bodies like limited liability companies and limited partnerships. This way, any incipient lawsuits on your current property do not bleed into your personal assets. The real estate market is vast and diverse. There are several options to explore and play around with one’s property. Options like REITs and property-flipping have not been considered here as they are not recommended options for beginners. One must carefully assess one’s sources of capital and analyze potential risks before making any kind of investments in properties.

10 Best Tax Software

By Eddie V. — Published March 15, 2018

Getting a professional to prepare your tax returns can be significantly heavy on your pocket, especially if your tax situation is complicated. That said, here are our top 10 tax software that will help address all your tax concerns at a fraction of the costs!

The undeniable leader in the world of tax preparation software, TurboTax by Intuit is your ultimate 'go to' option for hassle-free tax preparation. It not only provides an incredibly simple user interface but also is capable of importing multiple employer Tax Ids. The software also has an ‘expense finder’ tool that allows self-employed individuals to file Schedule C.

The hi-tech TaxSlayer mobile app allows users to click pictures of their W-2 instead of having to manually punch in all the details themselves. The Self Employed and Premium versions of the software also offer an additional audit assistance to prepare your business for an audit.

H&R Block
The H&R Block is a user-friendly tax preparation software that asks relevant questions and deciphers them perfectly to offer you efficient tax advice. In addition to its premium version, the H&R Block also offers a free version that is known as More Zero.

The TaxAct software is best known for its convenient user interface, excellent navigation, and help tools that enable the users to create their tax return with great accuracy and ease. A relatively inexpensive option as compared to H&R Block and TurboTax, the TaxAct also offers a price lock guarantee to ensure that you always pay the same amount regardless of how long you take to file your return.

Liberty Tax
If preparing your own tax returns is not something you are new to, then the Liberty Tax software is the most convenient tax preparation option for you. The software is more driven towards the needs of more experienced tax filers.

Credit Karma
One of the relatively new additions to the list, the Credit Karma was launched in 2016 and offers easy and free of cost filing of both state as well as federal tax returns. Apart from handling your regular 1040A and 1040EZ returns, the Credit Karma is also great at managing more complicated tax issues as well.


Another high-ranking tax preparation software that has made thousands of lives easy in the United States is the FreeTaxUSA that enables the users to e-file their federal tax returns for absolutely no charges! However, if you wish to file your state taxes or need support for the same, you might have to pay some additional fees.

Jackson Hewitt Premium
A more budget-friendly alternative to the Turbo Tax and H&R Block, Jackson Hewitt Premium is an exceptionally efficient and comprehensive software that not only answers all your little and large queries but also provides you with an accurate tax return on the basis of the information you input.

A clean-cut and modern user interface renders the eSMartTax tax preparation software convenient to navigate and use. The software is entirely owned by Liberty Tax and also offers brick and mortar offices where you can interact with real agents and get the required help and support for your tax filing.

IRS Free File
Administered wholly by a non-profit collaboration of tax preparation service providers, the IRS Free File is a software tool available on the IRS official website that, in turn, help you to zero in on the best tax preparation software for your individual needs. However, if you earn less than $54,000 a year and/or are permanently disabled, you can get your tax filing done by The Volunteer Income Tax Assistance program of the IRS free of cost!

How to Pay for College Fees – 4 Useful Tips

By Keren P. — Published March 15, 2018

Education has become expensive today, and no more can students opt out of getting into college because the competition out there is more intense than it ever was. On one hand, there are the growing costs and expenses youngsters have to consider when deciding to go to college, and on the other, limited sources of income. That does not mean that it is impossible to go to college. You just have to look in the right place to tap into the available– often hidden– resources that you can take advantage of.

1. Student scholarships
Students scholarships are definitely the best option available to students. Today, it is almost as if there is a scholarship available for everybody– as long as you know where and how to look for it! What makes scholarships such an amazing option is the fact that here there is no onus on the student to repay anything– which otherwise can prove to be quite taxing for students who have taken loans to complete their higher education. However, getting a scholarship may not always be easy– you need to focus intensely on making the cut to avail the scholarship. This means that no last-minute work will do and you will have to start working hard on looking for what scholarships you can make use of and get qualified for them.

2. Make use of the Free Application for Federal Student Aid (FAFSA)
Similar to scholarships, students can also make use of the Grant Money that the Federal government provides for students trying to pursue higher studies. Check out whether you qualify for these grants, and submit an application. In addition, you can also check out if your own state provides grants for higher education. Do a little research on government grants and you are sure to hit upon something that will help you see you through your college.

3. Loans
Although the idea of taking a loan may seem scary, it still is a viable option that you cannot ignore, and many, many students apply for loans each year. There are two kinds of loans that you can try applying for- federal loans and private loans.

Federal loans, needless to say, are lent by the federal government and are definitely a safer bet to rely on compared to loans given by private agencies. For one, there is always the guarantee that you are relying on the government rather than on an unknown agency. There is better borrower protection when you have taken a loan from the federal government, and can even rely on their options for loan waivers if at all you are not able to repay the loan for genuine reasons.

Federal loans have a limit, however, which is why you may have to take private loans as well. Try to avoid taking private loans as much as possible, and keep to relying on yourself or on the federal government as far as you can.

4. Start saving-up
There are a lot of jobs out there you can do to increase your savings. Think of something you are good at, and look around if you can make money out of it. Remember, anything can sell if you know how to sell it right. Even something as simple as knowing how to bake muffins can prove to be a great additional source of income. Of course, you need to be smart with your savings – you definitely need to cut down on unnecessary expenditures and habits if you want your savings to actually be significant enough. It takes a long time to earn what you would spend in the fraction of a second.

What is a 401k Account?

By Eddie V. — Published March 14, 2018

A 401(k) plan is a savings plan for your retirement, legally offered by your employer. A portion of your paycheck is taken out and transferred to your 401(k) account, before the deduction of taxes.

The plan is named after the section of the Internal Revenue Code that governs it, that is, subsection 401(k). It came into prominence around the 1980s, when employers realized that running pension funs was getting way too expensive. Pensions funds were paid by employers to employees after retirement on a regular basis, but this soon proved to be extremely expensive, and therefore, 401(k) plans were introduced.

If you have a 401(k) plan, you do not have to pay income taxes on the amount that is transferred to your 401(k) account for that particular year. This amount should fall under the legal contribution limit and is known as a salary deferral contribution. You defer a portion of your salary into your 401(k) plan and save it for your retirement.

Whatever amount is inside the account, it increases tax-deferred, which means that as the money grows with investment income, no taxes will be due on the gains every year. Instead, you will be required to pay tax at the time of withdrawal of the money, when you retire.

However, if you withdraw your money before your retirement age, you will have to pay a penalty of 10 percent, including your income taxes. This is done by employers to ensure that their employees do not leave them way too early.

Types of 401(k) contributions
There are three different types of contributions that employers make to your 401(k) account. These are always pre-tax, meaning that they can be taxed only when you withdraw them at retirement.

Here are the three types of 401(k) contributions made by employers.

• Matching
A matching contribution is where your employer puts in money to your plan that will match your own contribution. This means that employer contributions are made only if the employee himself or herself contributes. A matching contribution of 3 percent is usually the most common. For example, if you make $50,000 a year, you put in 3 percent of it, which is $1,500 into your plan. Your employer also puts in another $1,500 to match your contribution.

• Profit sharing
A profit sharing 401(k) contribution is where your employer contributes a set amount of dollars to your plan, if the company receives a profit. Although many companies follow various formulas to determine the amount of contribution employees can get, the most common is that each employee with a 401(k) plan will receive a contribution proportionate to his or her pay.

• Non-elective
A non-elective contribution is where an employer contributes a set percentage to each employee’s 401(k) account. Even if an employee does not contribute his or her own money to the plan, the employer will still make the set percentage contribution. For example, the company may contribute a set 3 percent of pay to all eligible employees’ 401(k) plans every year.

Designated Roth 401(k) plan
Apart from the traditional 401(k) plan, there is also another type, known as Roth 401(k) plan. However, fewer companies provide this type of plan.

Established back in 2006, the main differences between a traditional 401(k) plan and a Roth 401(k) plan lie in tax implications, and accessibility of funds. While funds in a traditional 401(k) plan are taxed at the time of withdrawal, Roth 401(k) contributions are made only after tax deductions. This means that you won’t have to pay any taxes when you withdraw at the time of retirement.

Another difference is that while funds in traditional 401(k) plans cannot be accessed before retirement, and a penalty has to be paid if you do so, Roth 401(k) funds can be easily accessed any time as long as you have had the account for 5 years or more.

What is an Hourly Employee?

By Clark K. — Published March 14, 2018

An hourly employee refers to a person who is paid for the number of hours he or she works, unlike a salaried employee who is paid a fixed amount that does not take into account the number of hours the employee has worked. Hourly employees are required to be paid a minimum wage. The amount set as minimum wage varies from state to state and an employer cannot pay the employee any less than that.

Minimum wages and overtime pay
Often, there is a federal minimum wage that is imposed by the federal government and a state minimum wage that is set by the state. An employer is required to pay the higher of the two.
In certain states, local governments have also set minimum wages that are far higher than either the state or federal minimum wages. In 2017, laws were passed against this system.

According to the law, an hourly employee is paid for a standard number of hours they work on a weekly basis. As per the federal law, it totals up to forty hours a week. If an hourly employee works for more than forty hours a week, it is considered to be overtime and he or she is eligible for extra pay. State laws regulate the payments for overtime although employers can be generous with the pay if they so wish.

In most cases, salaried employees are not eligible for overtime pay, although, in some cases, even salaried employees receive a consideration. This happens when the average weekly pay earned by a salaried employee is much less than the amount that is set by the Department of Labor.

Unlike salaried employees, hourly employees do not work on a contractual basis. They can be hired or terminated at any time with no consequences for the employer.

Number of hours worked and benefits
Hourly employees are required to record the number of hours they work through a simple system that either uses a time card or a time sheet. The wages are handed out based on the number of hours that have been recorded by the system.

Hourly employees are different from part-time employees. The two terms are often mistakenly thought to be one and the same. Part-time employees, like salaried employees, have fixed working hours and pay. Some of them are entitled to certain benefits as well. The payment received by a part-time employee is quite different from the payment received by hourly employees.

In most cases, hourly employees are those who work in entry-level jobs or even manual labor. Examples of hourly employees include waiters at restaurants, ancillary staff, house help, and so on.

In certain cases, hourly employees are entitled to certain benefits such as paid sick leaves and holiday exemptions. This depends strictly on company policies. An hourly employee who works in a company becomes eligible for the benefits that a full-time employee is entitled if the total number of hours worked is more than what is normally put in by a salaried employee. Federal laws dictate that an hourly employee who works at least 130 hours on a monthly basis are entitled to such benefits.

Hourly employees contribute a large fraction of the country's workforce and their labor is invaluable. But, often, hourly employees are taken advantage of and a number of such employees are not paid in full or on time. As a result, the people in this segment become demotivated and unwilling to take up work. It is important to motivate hourly employees and make sure that they receive the benefits they are entitled to. They contribute in a large way to everyday labor and they are an important part of the country's workforce.