Angel Investing: Why Are Convertible Notes The Better Option For Startups

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What Is Angel Investing?

Angel Investing has an Angel Investor or Private investor or Seed investor or Business angel who is the owner of a huge estate and provides finances to startups in exchange of ownership equity in the company. Oftenly, this angel investor is someone from family or friends. The investor invests the money either at the beginning of startup or helps financially when the company is going through a hard time.

What Is Convertible Note?

Convertible Note is a debt security (lended money) which can be converted into the ownership equity of the company. The process of convertible note is that the money lended, automatically converts into the same amount of stock and that is owned by the angel investor. The main terms that should be considered while defining the value of a convertible note are -i) Discount rate – is the reduction percentage at which the convertible note will convert in the valuation round. ii) Valuation cap – this converts the invested amount into equity at a maximum price. iii) Interest rate – this is the rate that gets issued till the notes are converted into equity or the company has to pay back. iv) Maturity date – this is the day when the company has to repay the investor either with the notes that have been converted to shares or have to pay back the debt money with the interest. The main advantage of convertible note can be that the money receiver won’t have to pay back the money with interest and the valuation of the company can not be conducted when it’s just a mere idea.

Why Is Convertible Note Better For Startups?

Following points might help you know a bit better about convertible note: –

  • Valuation can be delayed:

    Until there are no products, no customers, no sales in the company, the valuation can not be done. Further, the valuation can be shifted from one time to another once the company is doing well in the market.

  • Protects the investors

    It keeps the investors close to the company as the investors will not leave the company until the valuation is done. And permanent investors may help again if the company faces any kind of loss.

  • Low Valuation

    As the amount of debt is more so the company would be able to justify the lower valuation of the company.

  • Closing is quick

As the valuation is delayed so often the investors negotiate the valuation or deal                 document and they agree to the terms and conditions in one go.

  • Lower legal fees

As the convertible note is not as vast as traditional convertible preferred stock                    financing,  so the legal fees of convertible note is less than the other. Where the                  convertible note is of 10 pages, the traditional convertible preferred stock financing is of      100+ pages.

Pros And Cons Of Convertible Note

 Pros

  • Raising a convertible note to the investors leads in increasing the duration of valuation. This results in sharing less stocks from the company.
  • As convertible note is simpler to document from a legal perspective, it is cheap and is easy to close more quickly.
  • The funding of the business is fast and simple. The investors invest right at the beginning and the process is pretty simple too.

Cons

  • The major disadvantage is giving up equity. If you don’t want to give your stocks to your investors, then you should not go for this option. Rather you can choose the SPV for your business.
  • Risk of the startups increases if they are not able to raise the sales or the stocks. If the note matures but does not convert, the company has to pay the debt amount along with the interest. To avoid these situations, every company must have CAP tables to keep the records. Another benefit of this is that sometimes the other investors like to willingly invest after studying the CAP table or spreadsheet.

Startups with high growth phases should go for convertible notes. After the investment      by the angel investor, the company should prepare themselves for valuation so that the      convertibles won’t concern them. In the end the convertible notes are debt and the            company will need rapid growth in order to increase the value for investors. If this              doesn’t happen before the note matures, then the company would have to pay the debt      amount along with interest until and unless the investor pardons you with some extra        time.

FAQ On Convertible Note

Q. What Is Convertible Debt?

Ans. It is a kind of funding to the startups as a loan and instead of paying back the loan, the lender or investor becomes a part of the company.

Q. What Happens If The Note Is Matured And The Valuation Is Low?

Ans. In such a scenario, the company has to give back the debt amount along with the interest.

Q. How Much Is The Interest?

Ans. Before it was 7% – 10%, but now it has come down to 1% – 2%.

Q. Who Can Go For Convertible Debts?

Ans. Startups with a way of growing rapidly can consider this way of funding.

Conclusion

Choosing the right way of funding is the major step for startups. Before making a decision, research well about every kind of funding. Go through their advantages and disadvantages, compare them and whenever in doubt always take help from professionals. Convertible notes are healthy for a startup business, but the company must grow in order to make it beneficial. The main terms of the convertible notes such as – Investment and purpose, Interest, Conversion Events, Exit event, Qualifying round, Maturity, Conversion Price, Valuation Cap, Default events should be kept in mind and you should get a vivid idea about each one. For further knowledge, you can also consult with a lawyer. Also go through some examples of convertible notes to clear every doubt. If you are not sure about the growth of your company, then you probably shouldn’t do this.

Unemployment Trends and The Effects on The Housing Market

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Since the dawn of human civilization, we have wrestled with the implications of unemployment on the individual and society. The strain of this social issue gained particular traction last year following the pandemic and its accompanying ripple effect across different sectors in nations all over the globe.

Unemployment Trends

Today, even as the year 2021 draws to a close, the world is still reeling from the effects of COVID-19. In a world built to accommodate as many people as it can, several months of mandatory lockdowns and social distancing spanning have taken a toll on the job market and consequently other industries.

This article will look closely at unemployment trends and their effects on the housing market.

If you’re searching for answers to the question of how COVID has affected the rental market and more, then stick around to find out.

What’s the state of unemployment today?

While unemployment is something society has always grappled with, its numbers reached record-breaking levels in April 2020. This phenomenon is tied closely to the strict lockdown rules set in early 2020 to check the spread of the Coronavirus. Unfortunately, many of the regulations affected jobs across industries, particularly in the travel sector, and unemployment rates ran up to a staggering 14.8%.

More than a year later, the world has had time to acclimatize, and unemployment rates dropped significantly to 5.2% in August 2021. However, that figure is still more than that of the pre-covid era, with February 2020 standing at 3.5%.

Effects on the Housing Market

As highlighted earlier, the unemployment rates between the pre and post-covid eras are more than quadruple. This sharp increase in the number of adults out of work has profound implications for every sector of humanity.

Let’s take a closer look at how it affects tenants and renters, particularly in the housing market.

#1 Lower housing prices

One of the effects the upward trend of unemployment has on the housing market is that it reduces the cost of owning a home. When unemployment rises, the purchasing power of the average individual drops, and the economy takes a hit.

Consequently, property owners and money lenders reduce their prices, making the cost of debt cheaper. So those who can still afford to buy can purchase a home at a lower price, hauling the real estate industry into a buyers’ market.

Another reason housing prices are dropping is the migration of tenants from large cities to surrounding counties. Now that remote work is gaining more traction, proximity to the office is less of a concern. More people are moving to other locations where housing is cheaper.

#1 Waiving rent

The sharp increase in unemployment indicates that formerly employed people are now left without a job. Many tenants are now struggling to put food on their table, let alone pay rent. An estimated 32% more households are unable to cover their rent.

Although rental relief programs are available to ease the burden, there’s no denying that landlords still have to bear the brunt of it by waiving their rights to collect rent altogether.

#3 Reevaluating repayments

Many landlords are now adopting a reevaluation system as a way to manage their investment options. Some property owners view their rentals as an active means of survival, so waiving their rights to collect rent is out of the question.

Thus, more landlords are open to reducing or reviewing their tenant’s payment schedules so they can also meet up with their bills.

#4 Increase in the Mortgage Arrears Rate

The backlog of rent means many landlords are unable to meet up with their mortgage payments. Many property owners depend on the rent from their tenants to make their loan repayments, and when the chain is severed by unemployment on one end, it affects the other.

Many banks and other non-conventional lenders are acting in kind by waiving or extending their usual late as a means to be more accommodating.

#5 Tsunami of evictions

To protect tenants and their households from being homeless, the C.D.C issued an eviction moratorium which they extended several times. The most recent one lapsed in July 2020, and after the Supreme Court rejected the government’s proposal to extend the ban, millions of Americans now face eviction.

On the flip side, landlords shouldering the debt of millions of dollars in unpaid rent can now evict non-paying tenants in hopes of attracting renters with more financial power.

Conclusion

Several factors influence the rental industry, including unemployment rates and trends. Consequently, amid higher unemployment rates, housing prices go down, landlords and tenants have to reevaluate repayment options, and evictions become inevitable.

Despite all these, savvy real estate investors can still make a decent return, especially those working with management companies that understand the market. Their knowledge helps them quickly adapt to the changes, allowing them to draw in profits or at least mitigate their clients’ losses.

Top Features of a Truly Modern Credit Union

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Credit unions are popular for several reasons. They have a personalized approach with a member-centric model. You are both the customer and owner here. This lets you enjoy lower charges as well as interest rates on loans. You can also enjoy several financial benefits, even with a low credit score. No wonder the US market size of credit unions, measured by revenue, stands at $81.6 billion in 2021. Studies have found that factors that influence this industry are household debt and the rising lifespans.

Credit Union

Credit unions are an excellent low-cost alternative to traditional banks. But you need to tick off a few basic features to get the most out of their potential. For instance, ensure that the institution has adopted innovative practices and the latest technologies. What else is crucial? Take a look.

1. World-Class Customer Service

The 2020 American Customer Service Satisfaction Index for credit unions, conducted by the University of Michigan, stood at 77 on a 100-point scale. Credit unions strive to serve the community for the greater good by rolling out technology solutions and mobile apps. This is why members insist “they’ll never leave their credit unions.” The customer experience benchmarks or key metrics are usually staff courtesy, variety of financial services and branch locations. So, make sure the organization you pick has a member-first approach for the best service and support experience.

2. Impact of Technology

Your credit union should offer electronic signature authentication, online share account application, remote deposit capture, electronic bill payments and electronic loan application. These are the main areas that appeal to potential members. A few 2021 credit union technology trends are cloud computing, machine learning and AI, digital ID solution, analytics and marketing automation. All these help improve operations and support members more accurately and efficiently.

3. Basic Membership Requirements

The credit union you pick should not restrict membership to limited people. It must allow the general public from all walks of life to enjoy the benefits offered. All you should need to do is open an account and start your membership. The customer support team of the top credit union of New Jersey will explain the basic and complex functions. This way all members can democratically operate the not-for-profit organization. You will remain a valued part of the team, rather than just another customer on their database.

4. Works with Less-Than-Impressive Credit Score

An ideal credit score is 750 and above. Banks are usually reluctant to offer loans if you do not have the minimum score. But credit unions wish to make the process easy for you rather than making it another burden. Even if you do not have a good credit score, you are eligible for a loan. So, if you wish to get an auto loan or personal loan with a poor credit score, your credit union should be able to help.

However, you can build a positive record by making regular bill payments, reducing the interest amount and taking small personal loans that you repay regularly. A good credit score can prove useful in other areas, such as renting a home, where landlords check your credit history to determine your ability to pay the rent on time.

An ideal credit union will be committed to human relationships. Make sure the system is user-friendly, cooperative and evolves with time for the best customer experience.

 

How to Manage Risks & Opportunities in Real Estate Investment

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There are many misconceptions when it comes to real estate, but one of the most common ones is that it is 100% free from risk. Many investors put their capital in rental properties and other real estate assets, assuming that losses are scarce and far in between. But that couldn’t be further from the truth.

Real Estate Investment

Like every other business venture, real estate carries with it a unique set of risks that makes learning risk management essential. While it’s vital to learn how to steer clear of pitfalls peculiar to being a landlord, it’s also necessary to be aware of the opportunities.

In this article, we’ll take you through some real estate investment tips that teach you how to manage risks while seeking opportunities.

 #1 Keep close tabs on your property

The first and most obvious way to manage risks for your investments is to keep a close eye on your property. It’s crucial to take precautions against elements such as wind, water, and pests. But burglars can also pose a threat to your tenants by rendering your apartment unsafe. The best thing to do is be proactive by buying insurance against theft, fire, and other damages that might result from external forces.

Securing your property against these dangers could also be an opportunity for you to make more profits. Tenants will be willing to pay more for buildings equipped with security cameras, burglar-proof windows, the latest smoke detectors, and other preventive measures that make them feel safer.

#2 Monitor the market through thorough research

The real estate industry is not static, and the only way to keep up is by doing your research. If you plan to sell your house, you might look at historically strong and weak peak points, what the occupancy rate is like, and so on. On the other hand, buyers will find more interest in current market rates, cap rates, and other relevant information. Even if you’re not actively planning to buy or sell, it’s essential you get some routine update on the market’s appetite so you can protect your investment.

#3 Diversify your investments

As the saying goes, avoid putting all your eggs in one basket. Diversifying your investments has proven to be one of the ways to protect your finances. This is true because forces such as the current reality of the economy, inflation, and other factors can affect the market. Contrary to popular belief, the real estate industry is not immune to these forces, so investors with their fingers in different assets minimize their risk significantly.

Of course, a diversified portfolio doesn’t automatically remove all the risk associated with investing; it only reduces it. For example, you’ll lose less money if one out of three or four of your assets suffers a loss instead of owning a singular asset that takes a hit. It could also work the other way around if one of your investments experiences a surge in profit.

#4 Avoid litigation

Litigation is another risk that comes with investing in real estate. From wrongful evictions to breach of landlord-tenant agreements, there are many ways your tenants could summon you to court. While following up with your obligations as a landlord is one of the best ways to avoid a lawsuit, sometimes these things are out of your hands, such as when you have a problematic tenant. In such scenarios, having insurance is still the best way to protect yourself and your investment.

Familiarizing yourself with national and local real estate laws is another way to protect yourself from litigation; remember that ignorance does not provide absolution from the law. You can always hire a real estate lawyer to oversee your buying and selling of property and ensure the procedure falls within the confines of the law.

#5 Look into fractional ownership

Fractional ownership applies when two or more investors own a specified percentage of a real estate asset. In this way, all co-owners share in the profit of the investment. While this might not sound like a favorable outcome, it also means all investors share in the loss, which could provide a cushion during an under-selling.

Conclusion

Finding a balance between managing risks and utilizing opportunities is key to maximizing your capital and making the most of your investments. No one answer fits all when it comes to your investment because everyone has a different tolerance for risk. It’s in your best opinion to conduct your market research, keep close tabs on your property, avoid litigation and find other opportunities that fit within your comfort zone.

Of course, you could always hire a professional to manage your real estate investment as these tasks can quickly become overwhelming. More so, an experienced real estate manager can offer more professional solutions when tackling risks or assessing apparent opportunities.

Incremental Income Ideas To Generate Real Wealth

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You probably have friends or colleagues who maintain a line of side hustles. They do it so they can bring in a variety of income streams no matter what they are doing with a day job. If you are wondering how you can make money on the side without having to spend every spare moment on it, you are not alone. With incremental income, you can learn how to create financial security using passive methods. Here are a handful of considerations to keep top of mind.

Understanding Passive Income

Passive income is money that you earn without having to work for each individual dollar you get. Although passive income is usually related to time or money you invest, you can continue to make money long past that original investment.

Since the income is not tied to your active labor, you can have multiple passive income streams running simultaneously. Most passive income opportunities require you to put in a little time or more money to keep them going, but it is marginal compared to what you would need to do for an active income job.

Benefits of Earning Passive Income

If the idea of earning passive income seems appealing, that is not surprising. Passive income — or even having multiple streams of income that are a combination of active and passive — offers plenty of benefits.

These include:

  • Financial security
  • Freedom to make choices, such as moving or starting a business
  • A path to retirement

It’s a myth that to retire, you must save every dime you plan to spend. If you have enough income through passive methods to support your lifestyle, you can start living on that income anytime you like.

How to Earn Passive Income

There are a wide variety of passive income streams. Some of them need a lot of money to start, but many of them don’t. You can try these examples or come up with others:

  • Sell your skills: Having a day job is one way to sell your skills, but you can turn your knowledge and experience into passive income, too. Write an e-book series. Create a set of video tutorials and charge people for access. You can even monetize a blog, YouTube or TikTok channel. That way, the work you put in will continue to earn money for you — even if you are not investing in it directly.
  • Rent out your property: One way to start earning passively is to accumulate property that you can use for rental income. If you own a home and decide to move, see if you can afford to get a mortgage while you rent out your old house. You can also do this with your car, spare bedroom, expensive equipment and more. Set availability to your convenience. When you are done with any of your assets, you can sell them to recoup even more of your investment.
  • Start investing: If living on your investments is your goal, start building them as soon as you can. Taking a few extra dollars and putting them into a savings account or a certificate of deposit can help you get into the habit of saving.

When you are ready, try investing a little money into stocks that have good growth potential. As you accumulate experience and funds, you will likely feel more comfortable making choices using larger amounts of money. In time, the returns might be enough to give you more financial freedom — eventually giving you the ability to live on that income.

Building wealth is easier when you look for ways to do it a little at a time. You don’t need to spend a million dollars to become a millionaire, just creativity and the willingness to see it work over time. By starting with a few incremental income ideas, you can begin creating financial security for yourself today.

This infographic was created by Renovo Financial, a real estate lending group

Citi Cash Card – A Simple Cash Rebate Credit Card

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The Citi Custom Cash Card is the ideal credit card for those who need an all-around cash bonus. The Citi card is perfect for cash-back rewards junkies. The Citi card also provides a cash bonus program for those who prefer to earn more points than cashback rewards. The Citi cash card is intended for those who wish to make purchases using their credit cards. The card has earned the prestigious approval from financial institutions such as Bank of America, Chase, and Discover Card. The Citi card can give you cash rebates, store discounts, airline miles, gas rebates, cash back on many purchases, and other cash-back rewards.

Redeeming Rewards Points:

Cash-back cards are great for those who like to shop, but do not want the hassle of redeeming reward points at the end of each month. A cash-back rewards card allows cardholders to receive cash for every cent they spend. Citi offers cash-back cards with varying interest rates. Citi custom cash card holders have the option to choose the best cash-back cards that suit their needs. The Citi custom cash card should provide great value to cardholders and rewards specialists alike because it automatically rewards the top spending group each billing period.

Earn More Points:

The Citi custom cash card allows cardholders to earn more points than normal by charging items purchased using their plastic card. Cardholders earn more points than normal by spending up to a certain limit on their purchases and by referring new customers. Cardholders earn more points than normal when they charge items that are part of a gift, vacation, or rebate plan.

Select Variety of Plans:

The Citi custom cash card allows cardholders to select from a variety of plans including the Gold, Silver, and Blue rewards programs. The Platinum rewards program allows cardholders to redeem rewards points for travel miles, cash back, business expenses, and entertainment in the form of video games, electronics, apparel, and accessories. Cardholders who spend at least twice a month on their Citi cash back card can qualify for an annual 500 cap. The 500 cap helps cardholders save money on interest payments by paying only the interest on the lower monthly balance after the first year.

Reward Categories at Special Rate:

Cardholders who make regular purchases of at least $1000 annually will qualify for the Gold rewards rate program. The Citi cashback card allows cardholders to get a special rate on their cash back when making purchases in the following reward categories: department store products, home appliances, electronics, furniture, and dining room and beverage accessories. The Blue reward categories offer a 0% interest rate on purchases made in the 3 determining departments: travel, entertainment, and dining. Rewards are also available for gasoline purchases, automobile expenses, and business expenses.

Citi provides you with a simple application form so you can start building your Citi cash welcome bonus quickly. You can also find out your eligibility status at any time during the application process. Once you complete the application and agreement, you will be processing and receiving your cash rebate. With the help of Citi, you can enjoy the benefits of earning cash, rewards, and savings.

10 Marketing Skills You Should Have To Become Real Estate Agent Tips by Martin Zialcita

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Real estate is an extremely competitive industry. Real estate agents are pushing constantly to close the next sale, and ensure maximum profits. The greatest worry in a real estate agents mind is how to gain the best deals from their clients. Just like other marketing professionals, real estate agents need particular set of skills. In this post, we look at the top ten skills you must have to become the next successful real estate agent.

Real Estate Agent

#1 Communication Skills

To become a successful real estate agent, you need proper communication skills. This is because communication is the heart of everything you are going to do as a real estate agent. Therefore, we recommend that you develop proper communication skills, so that you can communicate to the property owners effectively, and lead the negotiations such that you will attract maximum profits. Consider that if you are not going to be a good communicator, you will end up losing deals to real estate agents who have well-honed communication skills. Therefore, take time and train yourself how to communicate effectively.

#2 Ability to Understand Social Cues

A real estate agent needs to be able to read body language. Remember that body language could often reveal additional information. For instance, folding of the hands could mean that the customer does not like the deal. In addition, certain facial expressions could express

dissatisfaction. Therefore, if you anticipate becoming a real estate agent, it is important you learn how to interpret various facial expressions and body language in general. While trying to discern the body language, be aware of cultural distinction, and particularly when closing international deals. You can research body language beforehand to avoid behaviors that could be misconstrued.

#3 Integrity

Integrity is an important skill in the real estate business. As a real estate agent, you need the ability to differentiate right from wrong. Therefore, when real estate agents make decisions about

which neighborhoods to promote based on skin color, religion or sex, it is a totally wrong practice. Agents need to have the integrity to tell their clients the truth about values in the marketplace and whatever changes would enhance the perceived property value.

To build a reputation, real estate agents need to provide a great service to every one of their clients. Practicing integrity makes it possible to gain positive reviews and glowing testimonials from the past customers. Therefore, if you are focusing on becoming a real estate agent, consider different ways of improving your integrity levels.

#4 Negotiation skills

Do you have proper negotiation skills? Before registering as a real estate agent, you need to make sure you have proper negotiation skills. Otherwise, you will not make money.  remember that in any real estate deal, the seller wants the highest price for the property, and the buyer wants the lowest price for a property. that does not mean real estate agents will not make money. The truth is that how much you make, depends on your ability to negotiate. Therefore, the agent’s role in the real estate deal is to link the buyer to a seller, with an aim of earning maximum amount as the commission. With proper negotiation skills, the real estate agent can attract maximum profits.

#5 Following Up

One key skill to converting leads into buyers is the ability to follow up, and respond to clients promptly. If you do not follow up, another real estate agent will follow up and close the deal. Therefore, following up is another important skills to have, if you are planning to work as a real estate agent. Remember to treat each lead with honesty and integrity. If you promise to get back to a client within a certain number of days, make sure you share the update as promised the client. The most important thing you need to remember is that you cannot close deals, if you are not good at following up.

#6 Learn To Be Passionate

Passion is what gives the real estate agent a purpose. If you combine your passion as your work, then you will be doing your best in terms of pursuing leads and even throughout the closing process. Becoming passionate about your job motivates oneself and those around you.  Besides, passion drives you into developing a better work environment, and so you can create a more loyal following.

Additional reasons why finding passion is vital include feeling good, attaining success, it becomes difficulty to quit, helps you to attain career growth, and you manage your time much better.

#7 Active Listening Skills

Active listening is a valuable technique that requires the listener to absorb, understand, respond  and retain what is being said. Therefore, when you learn to engage in active listening, you not only understand the message, but also understand their body language. Active listening skill set involves various listening techniques namely:

  • Paying attention
  • Withholding judgment
  • Reflecting what the speaker said
  • Seeking clarification
  • Summarizing
  • Sharing

Therefore, when you have proper listening skills, your customers will want to work with you , appreciate your efforts, and even refer friends and relatives to you.

#8 Problem solving skills

Problem solving is an important skill because it gives you the mechanism for identifying things, figuring out what they are, and determining a course of action to fix the issues. Therefore, as a

real estate agent, you stand a greater chance for meeting your sales goals, satisfying customers and eventually, growing your business tremendously.

#9 Teaching Skills

Clients choose hiring you not only because of your knowledge of the market, but also because you have the ability to educate them and support them throughout the process. Therefore, it is important you learn how you can transfer knowledge effectively, and explain the same concepts repeatedly.

#10 Patience

Patience is an important skill for not only real estate agents, but also other professionals. Consider that sometimes you may be able to sell a property within a day, while under other circumstances it takes months. Therefore, you need to stay calm, but also follow up often.

Conclusion

Are you hoping to venture into real estate? You need the ten skills we have listed here, to achieve success. Therefore, begin learning these skills early enough, and embrace them throughout the career.

Buy Land Now, Build Your Home Later

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Buy Land Now

A land loan is nothing more than what the name suggests… a loan to buy land; nothing more, nothing less. Land loans are a very small portion of the lending market and banks take a higher risk dealing with land loans than with mortgage loans, explains Casey Fleming, a mortgage adviser with C2 Financial Corp in San Jose, California. If a bank or lender has to foreclose on a land loan, there’s no real way of guaranteeing the bank will get its money back.

“Owners of raw land are much more likely to stop making payments and walk away from the property in the event of a financial event in their lives,” Fleming says. “If you own your own home, you’ll do anything you can to save it. With raw land, you can’t use it or generate any income off it.”

Because there is less demand for land than there is for already-constructed homes, vacant property is far more difficult to sell than a lot with a house on it.

“Most people can’t handle buying land and building something on it,” says Fleming. “It involves a lot more time and money than people expect. Even if it’s a fixer-upper, a land loan calculator is a tool that allows borrowers to gain a better grasp of their expected payments.” It doesn’t even take a minute of your time to type in your information. The best part is you do not need to be a financial expert to utilize the program.

On land loans, some lenders need a large down payment and charge higher interest rates. Furthermore, some land loans have much shorter repayment durations than a normal 15-year or 30-year mortgage.

What is a Land Loan Calculator?

A land loan calculator is a tool that helps borrowers understand how lenders determine the sum to repay a loan. You won’t spend a lot of time filling out the form. The best thing about it is you don’t need a math instructor to understand the calculations or to use the tool.

The monthly installments for your land loan are calculated using the land loan calculator. It also calculates total interest based on the purchase price, down payment, interest rate, and number of monthly payments.

If you are interested in buying land, this tool will tell you what to expect prior to having a conversation with one of the loan officers. Educating yourself as much as possible will help you feel in control of the situation and certain that you are selecting the finest financing solution for your needs.

Calculating the Interest on a Land Loan

If land loans are foreign to you, arming yourself with as much information as you can will only benefit you. You may not be familiar with the interest on a loan. The interest is the amount banks or finance companies charge to borrow money from them. This is figured in the total repayment amount. Your neighbor’s interest rate could be different from yours depending on the closing date and credit scores.

If you use a rural home lending co-op, you may take a lower interest rate in connection with the Farm Credit System.

It’s not uncommon for interest rates to go down just as fast as they went up. Often, it depends on supply and demand. One advantage to look for is a long-term fixed-rate loan. This loan can lower the risk of high interest rates over the term of their loans.

The loan officers are loan experts. They also are knowledgeable in the agricultural industry and know the ins and outs of buying land. After approving your loan request,  they will assist you in finding the best way to repay the loan all the while making your dream come true.

How The Internet Has Changed The Way We Use Money

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Money Managed

The era of the online world has changed how people communicate, how we find and receive information, and how we live our lives. Specifically, the internet and technology have changed how people shop and manage their finances. You can look at just about any personal finance blog to see how technology has changed our relationship with money.

If we look back at how money was managed ten, twenty, and surprisingly fifty years ago and look at it in comparison to the way that people manage their finances today, there are some clear conclusions.

For one, people today have substantially more control and access to taking care of their own money. Also, arising financial trends sway the economy, how consumers invest their money and time, and how companies conduct their business.

Keep reading to learn more about the top money trends of the 21st century, including how money, shopping, and banking, have changed over the years thanks to the evolution of technology.

Read More: 5 Money Management Mistakes You Should Avoid

The Evolution Of Personal Finance

Personal finance has seen massive changes over the past century. Technology has allowed consumers to save an enormous amount of money and time since everything is accessible to them through a simple tap of a screen or click of a mouse. It has also bestowed a feeling of power over how to financially plan and save, spend money, and pay for bills.

We can likely expect that finance will probably see consistent changes in the future because of advanced developments and innovative technology, for example, new online services, new software programs, and efficiencies that will make dealing with our finances more convenient, practical, and most importantly, manageable.

Cashless Society

Over time, we, according to the evolution of technology, have moved into a more cashless society. We have seen going to the bank turn into quick trips to the nearest ATM, to the present time where a lot of our transactions can be accomplished using our gadgets. To some degree, the need for physical money has become unimportant, and through the COVID-19 Pandemic, physical money has been strongly discouraged.

This has directly affected how we spend and use money. A quick tap of your card or gadget and you’ve bought your morning espresso, or maybe you even pre-ordered your espresso via an app, so it was waiting for you when you arrived at the cafe.

Before COVID-19, the Reserve Bank of Australia led a study that upheld that physical money is being used less. However, it found that some people prefer using physical cash, especially the elderly, those with limited access to the internet, and those from lower-income households. That said, post COVID-19, it is to be expected that the money trend will intensify, even into those groups that have been, beforehand, resistant to the change as the goal health crisis has been a catalyst for structural changes. As per the RBA, since 2007, physical money has diminished from being used in almost 75 percent of exchanges down to roughly 30 percent in 2019.

Our Spending Habits

We currently no longer have to leave our homes to spend our hard-earned money. Nearly everything is now purchasable online, enabling you to quickly compare prices and have your purchase order show up right at your door.

New payment methods have been created in the ascent of but now pay later (BNPL), testing and switching the customary idea of lay-buy. BNPL alternatives like Zip Pay and After Pay permit you to receive your item immediately and pay it off after some time, either with or without interest-free periods.

The essential advantage here is time efficiency. These technological advancements have had a far-reaching influence and affected the way we value and perceive money.

How We Value Money

When money is in its physical forms, like coins and notes, we often place a higher value on the same amount of money than we would during a card-based or electronic transaction. For instance, you might find it challenging to go through $100 if given to you in notes, as you would be very aware of every cent you spent on that transaction. However, in comparison, you might tap away $100 on your card without even flinching or thinking about it too much.

More so with the younger generations, BNPL additionally adds to the allurement of impulsive buying. Knowing that you can buy something now for $80 but only have to pay $20 upfront. Eventually, it can give you a false sense of the value of the item, and you might find yourself purchasing things you usually wouldn’t purchase or overspending.

There are likewise unique behavioral instincts around money, which can become more challenging to manage in a cashless society depending on your money type. For instance, if you’re someone who spends a lot of money or gambles frequently, you might want to consider using physical money to help you to remember the amount you are spending.

How Employees Can Benefit From a 401(k)

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What Is a 401(k) Plan?

A 401(k) plan stands as a retirement savings scheme, commonly provided by numerous American employers, offering valuable tax benefits for individuals. Its nomenclature is derived from a specific section within the U.S. Internal Revenue Code (IRC).

Under this arrangement, the participating employee consents to allocating a portion of their earnings directly into an investment account, with the potential for the employer to match some or all of this contribution. Within this framework, the employee enjoys the flexibility of selecting from an array of investment choices, typically revolving around mutual funds.

Key Points to Remember:

  • A 401(k) plan is an employer-sponsored retirement account that allows employees to contribute a portion of their income, with the possibility of employer contributions.
  • There exist two fundamental types of 401(k) plans—traditional and Roth—distinguished primarily by their taxation methods.
  • In a traditional 401(k), employee contributions are pre-tax, meaning they reduce taxable income, but eventual withdrawals are subject to taxation.
  • Roth 401(k) contributions are made with post-tax income, with no tax deduction in the contribution year, but withdrawals are tax-free.
  • Employers can contribute to both traditional and Roth 401(k) plans, further enhancing retirement savings opportunities.

If you have been planning for retirement, you would know there are many types of tax-deferred retirement plans. One such popular plan is a 401(k) offered by employers and it is much more than an employee perk. The best thing about this plan is that while it provides greater stability within the business to the employers, it allows the employees to better achieve their long-term financial goals for retirement.

Have a look at some of the benefits a 401(k) can offer you as an employee:

Simple Payroll Deduction

AARP found out that Americans are 15 times more likely to save for retirement if they are given an option to a payroll deduction savings plan. 401(k) is one such plan where the employee contributions are deducted from every individual’s paycheck automatically based on their salary. It is usually a certain percentage of their income, and it gets easily deducted by the company.

Tax-Advantaged Savings

A 401(k) plan offers both pre-tax and after-tax contributions.

  • Pre-tax contributions – There are contributions like traditional (pre-tax) salary deferrals, matching, safe harbor, and profit-sharing contributions that don’t get taxed when they are made. Their amounts, and any earning thereupon, are tax-deferred until distribution.
  • After-tax contributions– Unlike pre-tax contributions, these are taxed when made and tax-free when distributed. These include Roth deferrals and voluntary contributions.

Greater Contribution Limits

You can make higher annual contribution limits with 401(k) plans when compared to IRAs. It allows you to save at a faster rate and plan your retirement before IRA account holders.

Benefit of Compound Interest

Compound interest is a great tool for building wealth. Once your savings are invested, you start to earn interest on it and soon you get more interest on this compounded amount. So, owing to compound interest, your earnings on 401(k) contributions can quickly grow over time and you end up with a substantial amount at the time of retirement.

Dollar-Cost Averaging (DCA)

The regular contributions that are automatically deducted from your salary work on the DCA strategy. From every contribution, you buy a different number of investment shares (fewer when they are expensive and more when they are cheaper). So, it makes it easy for you to participate in the long-term gains of an investment.

Tax Credits

Another advantage of this plan is that it allows low and moderate-income workers to be eligible for a Saver’s Credit. The maximum contribution amount that may qualify for the credit is $2,000.

Ease of Portability

Lastly, if you decide to leave your current employer, you are entitled to an immediate distribution of your 401(k) account. You can also roll this amount to your new employer’s 401(k) plan or a personal IRA.

Saving for your retirement is one of the most important things that you should do during your working years. You can’t expect to work forever and you need a plan to meet your living expenses once you stop earning a paycheck. The above-mentioned 401(k) benefits can make it easy and affordable for you to achieve your retirement goals.