Cryptocurrencies Are Becoming More Mainstream

There comes a moment in the life of every new technology when a light turns on and the mainstream finally accepts it. This moment may have finally come for cryptocurrencies with the opening of the LedgerX clearing and trading platform.

LedgerX received approval last July from the Commodity Futures Trading Commission and offers a variety of cryptocurrency derivatives. About twenty institutional investors — an assortment of hedge funds, investment banks, and other financial entities — have been participating at the exchange, trading bitcoin forward contracts and options.

So far, trading at LedgerX has been light, with only 176 trades executing during the week of October 16-20, with a notational value of around a million dollars. But this still gives cryptocurrency supporters hope that one day soon financial institutions will be trading bitcoins and other cryptocurrencies in large numbers, both for their own accounts and for their customers.

Why? Because LedgerX opens the possibility that cryptocurrency trading will become more liquid and stable. Trading of cryptocurrencies by financial institutions have been held back by the lack of a clearing mechanism, as well as by liquidity problems at the unregulated exchanges, caused by their unorthodox settlement, security, and compliance policies. LedgerX solves all these issues.

Even more encouraging, LedgerX isn’t the only platform out there or on the horizon. Four other companies are either offering or will be offering institutional trading of cryptocurrencies, including Coinbase, DRW, BitGo, and the Cboe Options Exchange. Cboe will even offer index trading, eliminating the need to buy actual cryptocurrency.

These companies and their platforms will make it easier for financial institutions to trade cryptocurrencies, which could lead to more passive investment in them, and higher and more stable prices. They can also attract investors seeking to gain from the volatilities of the market.

A good gauge of how accepted cryptocurrencies are in the mainstream is the GBTC, which is an open-end unit investment trust that owns only bitcoins. Before October, this year it had been trading at a premium of 60 to 120 percent above the value of the currency it holds, which represents the value of owning a regulated financial product with traditional clearing and settlement policies. This month, though, the premium has plummeted to 25%. A zero premium is well within sight, and would signify true acceptance of cryptocurrencies by the mainstream financial community.

As trading increases in the coming months at LedgerX and at other platforms, we’ll see if cryptocurrencies fulfill their promise of mainstream acceptance. But cryptocurrency believers should feel good about their chances.

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The Best Tax Moves To Make Before The New Year

As 2017 comes down to its final few months, it’s time for adults to start thinking about how they need to file their taxes come April. There are lots of small ways you can take advantage of the tax system and save the most money possible if you’re vigilant and make plans now that will come to fruition once you begin to file your earnings and expenses.

Here are some of the best ways you can ensure a nice little windfall of cash come federal refund time.

To itemize or not to itemize?

By and large, taxpayers choose not to itemize and to take the standard deduction for all their tax-deductible activities, and by and large, that’s a good option to take for the sake of time and tedium. However, under certain circumstances, you may be better off itemizing. For example, if you’ve taken out a mortgage three or so years ago, you may have finished paying off the interest on the loan and begun paying on the house itself – that transition is a huge deduction opportunity.

If you choose to itemize, go all in: Going through the pain of itemizing all your tax deductions means that you know exactly what you have to do to max them all out. Move up any major medical procedures so that they count towards your deduction where you can. Make all the charitable contributions you intended to make sooner rather than later. Try to do any major home renovations to make your house more energy efficient before Christmas. As it’s feasible, take advantage of all the hard work you’ve done and hit those deductions hard.

Wait On Bonuses

We all love that big check at the end of a year from a company to thank employees for a job well done. However, for the sake of your taxes, it may be smarter to ask your HR department to hang onto those bonuses until after New Year’s Day. This will make the biggest difference if you’re right on the precipice of a tax bracket jump and a hefty bonus will put you over the edge.

Withdraw Your RMD

The federal government will slap you with a mighty penalty tax of up to 50% if you fail to take the appropriate deductions from your IRA or 401K after you’ve retired. If you’re over seventy years old, it’s imperative that you take the required minimum withdrawal prior to the new year, whether you actually need the money or not.

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You Only Need $5 to Start Investing with These Apps

You Only Need $5 to Start Investing with These Apps

Investing can be a difficult subject for many to understand. The thought of risking hundreds of dollars is unappealing to most. However, for the uneducated and those unwilling to risk it all, there are a number of apps that exist specifically to cater to you. Read on to find out how you can start investing with as little as $5.

Acorns

The first app, and one of the easiest to grasp, is Acorns. This app is great for those who want to take more of a “set it and forget it” approach, or those who would rather someone else decide what they should invest in. After taking a short survey about your needs and wants, Acorns suggests one of five portfolios for you to invest your money in. The choice is ultimately left up to you, and you can switch at any time, but this app is meant for a more hands-off clientele.

One key feature to point out is the recurring investment (which you can set to your own amount and time-frame). Another, and one that sets them apart, is round-ups. With round-ups, you hook up your bank account and any debit/credit cards you have and Acorns will round each purchase you make up to the next dollar and invest the difference. This is an easy way to invest small amounts of money without thinking about it. The third main feature is found money, where companies will invest a small amount of money in your portfolio when you use them. Some large retailers, such as Walmart, partake, but there are often caveats to the purchase.

Also, with 0 fees for students and people under 25, Acorns is an easy choice for the Millennial population, which makes up most of its user-base.

Robinhood

Robinhood is an app for people who would like to learn more about the stock market, or who have more free time and money on their hands. Although you can start your account with $5, Robinhood works by allowing its users to trade in the stock market – a feature that involves paying full price for stocks. However, with easy to use charts, a customizable list of stocks you want to watch, and instant buying power, Robinhood remains one of the top investment apps for first-time buyers.

Some key components to point out are: instant buying power once you initiate a money transfer, a news section to keep you up-to-date on all the latest news regarding your stocks, and a referral program that gives you (and the person you referred) one free stock for using your referral link.

Betterment

Betterment works similarly to Acorns in that it is less time-consuming to work with. Betterment uses a computer algorithm to determine the best stocks to invest in, and does all the work for you behind-the-scenes. The upside to this app over Acorns is that there are no set portfolios, so there is a better chance of outperforming other investment avenues, but the downside is it is not customizable like Robinhood.

Investing in the digital age is easier than it once was, and we have many companies to thank for that. Although financial concerns have caused many to hold tightly to their funds, investing a few dollars using one of these apps can lead to great returns. Nothing in the stock market is certain, but what is certain is you can begin to invest with just a few swipes and taps.

The Lesser-Known Financial Tips For Startups

THE LESSER-KNOWN FINANCIAL TIPS FOR STARTUPS

Startups, as new businesses, frequently end up having to spend a lot of money on various things, many of which aren’t worth the money.

Because entrepreneurs who are building startups are often newer to business ownership, there are a few financial blunders they may fall prey to along the way. Based off of my experience, here are the lesser-known financial tips that every entrepreneur should be mindful of:

Avoid (most) lawyers.

Startups more often than not require legal assistance, but this is at a pretty basic level. Law agencies and lawyers might offer packages that cater to a startup, but that’s not necessary for a business that’s just trying to get off the ground. Rather, hire legal service as and when required, as opposed to contracting law agencies in advance.  

Don’t overpay on tickets.

One way for a startup to get the word out about their business is to attend various conferences and events. Yet, tickets for these events are frequently not worth what you’ll get out of them. Instead, you can just as easily – and much more cheaply – take advice from people in your network or learn from videos.  

Coworking isn’t always the best option.

Coworking spaces are one of those tropes of the modern-age startup, and indeed, they can help many startups save money. Yet the people sharing your space can shape the culture of your startup for better or worse. Getting your own workplace allows you to establish a dedicated working culture, where developers can focus on their work. 

Save on accounting.

A startup that is just starting up isn’t big enough to hire accounting and finance services. When you have thirty people working for you, that, then, become a much different conversation, but until then you can handle such issues on your own.  

Keep a limited advertising budget.

Marketing and advertising are essential for a startup to build a brand and spread the word. At the onset, because your finances will be more strapped, make sure to spend wisely on what is necessary. Write out a set budget for marketing to ensure you aren’t overspending. As you grow, you can begin to spend more money on advertising efforts.

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What To Do And What Not To Do When Consolidating Credit Card Debt

WHAT TO DO AND WHAT NOT TO DO WHEN CONSOLIDATING CREDIT CARD DEBT

Countless Americans struggle with credit card debt on a regular basis. Trying to get out from under that debt can be an overwhelming process.

Many people try to consolidate their outstanding debt under one bill, lower their overall interest rates, and simplify the process of repayment. Yet, this often comes with plenty of perils to consider, so it’s important that you know what you should and shouldn’t do.

With that in mind, here are some dos and don’ts of consolidating your credit card debt:

Do…

…set up a balance transfer credit cards. One extremely easy way to refinance your credit card debt is by opening a new balance transfer credit card and moving your balances to it. These 0% interest cards give you time to focus on paying down your credit card balance by deferring your interest. The interest savings typically cover the cost of upfront fees, while the process will supercharge your ability to pay back debts. However, there are limits; for example, you can only consolidate as much debt on your balance transfer card as your new line of credit will allow.

look into debt consolidation laws. Taking out a separate consolidation loan can be a good way to consolidate your credit card debt, but only if you can get a lower interest rate than what’s part of your card’s terms. You should also know what type of payment plan you’ll be entering with this new loan. As long as you’re lowering your interest rates and know about any and all costs involved, then it can be a good alternative to opening a balance transfer credit card.

work on a repayment plan. After you decide how to consolidate your credit card debt, start working on a repayment plan. Decide how much you can afford on a monthly basis and estimate how long it will take before your loan is fully paid off. You want to find a good balance between saving and paying off the debt; you may hate debt, and want to get it out of the way as soon as possible, but you also want to keep saving up money for potential emergencies.

Don’t…

…make new purchases on your balance transfer card. When you’re transferring all of your balances onto a new card, focus first and foremost on repaying your debt. Don’t charge new purchases to this card. If you continue to make new purchases instead of paying your debt, then you can’t put a dent in the principal balance you had planned to get rid of.

take out home equity loans. While you look for ways to consolidate credit card debt, you may come across offers for home equity loans, which have you put up your home as collateral. It goes without saying that these are extremely risky, so don’t take one of these out to pay down your outstanding credit card debt.

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Why Building Lasting Partnerships Is Good For Your Business

WHY BUILDING LASTING PARTNERSHIPS IS GOOD FOR YOUR BUSINESS

When people think of business relationships, they often think of competition. After all, if your company is making as much revenue as it can, it’s costing other company’s money. Or, you might think of contracted services, like hiring another company to distribute your product.

But there are other types of partnerships that businesses can engage in. Business development is a term that describes the formation of these relationships. It can sometimes refer to sales relationships, including contracted services and the sales of raw materials or component parts. But more frequently, it describes the formation of mutually beneficial business relationships between businesses in related, but not competing, areas.

How do you form these types of business partnerships?

Mutual Benefits

Think of what types of businesses it would benefit you to partner with. Sometimes, there is an obvious answer. For example, if you run a pet grooming business, forging a partnership with a pet store makes sense and could drive a lot of customers to your business. Other times, it may take more brainstorming. Think about where your product or service is sold, who it benefits, and what else the people who purchase it might need.

Once you’ve come up with some possibilities, reverse it and think of how your potential partners would benefit from doing business with you. The best partnerships are the ones in which everyone wins.

No Regrets

Don’t make too many partnerships, as that can complicate the priorities of your business. If there are many possibilities, really consider which ones will be the most beneficial to make. But that said, don’t enter into any exclusive partnerships. Even if you only intend to partner with one other company, you don’t know what the future needs of your company will be, and you don’t want to agree to something you’ll regret in the future.

And on that note, make sure that you have an exit strategy if a partnership doesn’t work out. Talk to potential partners about how to create a mutually useful and fair exit strategy, in case of a future conflict of company values, or simply a change in what your company needs.

Avoid Competing

A good partner’s business will often overlap with yours. Be wary of that overlap, and be careful not to overstep your bounds. If you run a pet grooming business, you might sell dog toys on the side. But if you decide to partner with a pet store for extra customers, it might be wise to discontinue this, or sell only a limited stock, or buy the toys through the store’s supplier. Discuss areas of potential competition with potential partners to see if you can come up with a mutually amenable agreement.

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Why Portfolio Diversification Matters

WHY PORTFOLIO DIVERSIFICATION MATTERS

No matter your level of expertise in the financial industry, there is one key rule to trading stocks that everyone ought to follow: portfolio diversification. This is the act of investing in a broad range of stocks, bonds, real estate, and other financial instruments in order to reduce the volatility of one’s portfolio. In other words, it ensures that you did not place all of your proverbial eggs into one basket.

With that in mind, let us delve deeper into the importance of portfolio diversification:

It lowers your overall risk.

There is no such thing as a risk-free investment. However, by investing in stocks, bonds, and even short-term vehicles from a variety of companies and industries, you would be less likely to lose everything in the event of a market downturn or even crash.

It aids you in reaching your financial goals.

While diversifying your portfolio does not guarantee increased returns, it does safeguard your finances in the event of a stock market disaster. Therefore, if you begin your long-term investment ventures early enough, your assets may be stable and matured enough to aid you in times of trouble during retirement.

It takes time.

This particular quality may be viewed as a blessing and a curse. After all, investing is not a means to make a fortune overnight. Instead, it requires patience, thoughtfulness, and perhaps a bit of risk-taking. However, your level of comfort with taking risks – also known as your risk tolerance – is dependent on your time horizon, or the point by which you want to achieve your financial goals.

If your ultimate goal is to maintain a stable enough portfolio to aid your children in paying for college tuition, it is best to not take as many risks as you would if you were saving for your retirement.

How can I diversify my portfolio?

As previously mentioned, one can achieve portfolio diversification by spreading their investments across a broad range of stocks, bonds, real estate assets, and even short-term instruments.

In order to determine the best vehicles to invest in, as well as how many you should acquire, it would be wise of you to find and meet with a financial planner if you do not have one already. Otherwise, you may run the risk of over-investing, under-investing, or not evenly distributing your investments.

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Take Control Of Your Finances Again With These Personal Finance Apps

We can all attest to the fact that we lead very proactive lives; our free time is eaten up by events and activities that arise in both our professional and personal lives. Despite our busy schedules, our smartphones have made it easy for us to have access to anything we could possibly need: our personal contacts, access to work emails, news and weather updates, etc.

Now, thanks to a variety of unique apps, we have the capability to do almost everything through our smartphones, including tracking and managing our finances. Whatever your money goals are, there is an app that can help you achieve them. You can manage money directly from your bank accounts, budget your money through a third-party app, or invest your money in stocks.

Because these apps lend themselves as useful tools intended to simplify your life, they are becoming quite popular for avid smartphone users, which means that more finance apps are introduced every single day. Don’t waste your time comparing finance apps against one another. Here is a list of the best personal finance apps available for download now to suit your specific needs:

For Managing Your Money

If you have been on the search for an app that will help you budget your money, you have most likely heard a lot of praise and support backing Mint. One of the best features of Mint is that it is free for all US and Canada residents, so you won’t have to pay money in order to manage your money. Mint tracks all of your transactions, allows you to create a budget (and alerts you when you are getting close to surpassing your monthly budget), and also notifies you when your bills are due so late fees are no longer a lingering worry in your mind.

For Getting Out Of Debt

If you struggle with budgeting your money, often living beyond your means, You Need A Budget is the app for you. Through this app, you are not allowed to create an “ideal” budget but, instead, are forced to create a budget based off of your actual income. This app requires a small monthly or annual fee, but users have access to services and support, like live online classes where you can interact with an instructor.

For Tracking Your Expenses

If you are already responsible and organized with your finances but you are exhausted with constantly having to manually track your expenses, try using Wally. Gone are the days of having to record your expenses on paper. With Wally, users can photograph receipts and have the information inputted automatically – the app can even use your geo-location to track exactly where you spent your money too.

Getting your finances back on track is as easy as downloading one of these apps onto your smartphone!

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Practice Investing Your Money With Stock Market Simulators

Investing money can be an exciting experience for individuals who are looking for another way to make a profit. While the unpredictability of investing can be thrilling, it can be equally as risky, often resulting in a loss of substantial amounts of money.

They say that practice makes perfect, so why should you go into investing your money blindly? While it’s advantageous to consult with and have a financial advisor in your court, you may also want to do a bit of practicing on your own so that you have a better understanding of how the stock market works. Thanks to virtual stock exchange technology, there is now a way that you can practice investing money without using a single cent from your own pockets. Stock market simulators are becoming increasingly popular amongst timid and amateur investors – and for good reason. See what the hype is all about:

What are stock market simulators?

There are a variety of stock market simulators available to the public, most offering the same capabilities. On average, users are given $100,000 in fake money that is theirs to utilize as they please. The stocks available through these simulators are the same ones that would be accessible in the real-life stock market. In order to give the most accurate depiction of the stock market and investing process, these simulators are created to mirror situations that could influence the way your money performs. For example, a majority of simulators even charge specific fees to show future investors where some of their money will be dedicated to before their investment even begins to grow, so that, if they want to invest a certain amount in stocks, they may need to factor in additional costs.

Are stock market simulators different than the real-life stock market in any way?

While stock market simulators are astonishingly accurate to the real thing, there are certain components that are impossible to factor in. For example, because you are investing with fake money, your level of risk will not be fully represented, which could be a significant contributor in your stock market performance. Also, taxation issues, live stock prices, and the push for diversification will also not be represented accurately in the simulated version of the stock market.

Where can I start?

There are a variety of stock market simulators available to the public. Investopedia’s Stock Market Game is straightforward and easy-to-use, making it a great resource for practicing making investments. Wall Street Survivor is another tool to look into. They offer the same benefits outlined above, while also offering articles and videos for users to peruse in order to increase their knowledge and understanding of how the stock market works to encourage a higher success rate.

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Financial Goals: How Much You Should Be Saving Every Month

When it comes to saving money, not many understand what the best practices are. They question how much they should work towards saving, as well as how much they would need to put away every month in order to meet those goals.

While it’s important to actively save, you need to, first, be aware of what your financial goals are. The overall practices for saving may be similar, but no person’s finances or life situations are the same, so what works for someone may not be the best strategy for you, and vice versa.

That being said, being mindful of these strategies is a great starting point for anyone looking to have more control over their financial future.

A Breakdown Of Financial Goals

As you are doing your research, be mindful that the financial goals of others may not help you reach your own financial goals. There are typically three different ways you can view your goals: short-term, long-term, and far-future.

Short-Term Goals

When planning for your financial future, your short-term goals are just as crucial as your long-term goals. You may not be able to predict expenses that may affect you in the next year or two, but it’s important that you have an emergency fund available to pull from when you need to. These short-term finances can cover areas like taxes, vacations, and unpredicted bills.

Long-Term Goals

When you save for your long-term goals, you are saving for major expenses that may arise within ten years. This could be money used to cover the down payment on your first – or new – home, as well as any significant renovations that need to be done. These finances could even be used to cover expensive vehicle repairs or even buying a new car.

Far-Future Goals

This is money that you should not plan to utilize within the next ten to fifteen years. Some choose to put their money into a savings account that will help their children pay for their tuition after they enroll into college. But this category should mostly be viewed as your support system for life after retirement.

Once you have determined your financial goals, you can better plan out how you will implement practices to save for each of those goals. The rule of thumb that most people follow is planning to save at least 20 percent of your income every month. 15 percent of that should be dedicated to your financial future, while the rest can be invested into your short-term fund.

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