Mike Brassfield - The Penny Hoarder

Call them the geographically blessed.

For the lucky 12 million Americans who live directly in the path of the upcoming total solar eclipse, Aug. 21 will bring a once-in-a-lifetime astronomical show.

If you’re one of them, your home is a potential gold mine. Got a spare room? Rent it out. The opportunities to cash in are simply out of this world. But you have to hop to it, because time is running out.

Tens of millions of people will be travelling and renting rooms in the solar eclipse path. They’ll flood hotels, campgrounds and Airbnbs listings. All for a rare taste of moonshadow.

Airbnb, the popular home-sharing listing platform, is seeing a huge spike in the number of people listing their spare rooms and entire homes on the eve of the eclipse.

You could be one of them. It’s not too late, if you follow our instructions.

Darkness in the Middle of the Day

First, let’s back up and get our facts straight.

As you’ve no doubt heard by now, a total solar eclipse happens when the moon passes directly between the Earth and the sun, blocking all solar light.

They’re super rare. This will be the first one on the U.S. mainland in nearly 40 years.

On Aug. 21, the solar eclipse path will cut a diagonal 60- or 70-mile-wide swath across the country from Oregon to South Carolina over an hour and a half.

NASA has a useful video here, illustrating what will happen. Here’s another video showing the path in greater detail.

Everyone in North America will be able to see a partial solar eclipse. But those in the path of the total eclipse will experience total darkness for two long and amazing minutes.

Precious Real Estate for a Three-Day Weekend

Thousands of people who have a little real estate along the path of the eclipse are cashing in, with some parking spots going for upwards of $100. In Oregon, 30 campsites were recently auctioned off for a total of $60,000, or $2,000 per campsite.

“More than 40,000 guest arrivals have turned to Airbnb to book homes along the path of totality, and there’s still time to book,” Airbnb recently said. “From Oregon to South Carolina, we have nearly 3,800 homes available along the path of totality.”

Some of the most expensive Airbnb listings near the start of the eclipse in Madras, Oregon, have been priced at up to $3,000 per night. Someone’s spare room in a small town in Oregon was going for $500 a night.

A couple more points:

  • The Aug. 21 eclipse happens mid-morning on a Monday, so many eclipse travelers are making a three-day weekend of it.

Aside from the 12 million Americans who live in the path of the total eclipse, another 75 million people live within 200 miles of it, according to U.S Census data.

Even if you just live near the total eclipse, and not directly in its path, you could still try to cash in. The biggest crowds are expected in South Carolina, Tennessee, Missouri and Oregon, based on driving models.

Here’s What You Need to Do

Clearly, time is running out. But you can still do this.

Sign up here to be an Airbnb host. This doesn’t cost anything. Airbnb takes a 3% cut of what you earn when you list your home or spare room.

Once you create an account, Airbnb has tools to guide you through the process.

You’ll write a listing for your property, with an appealing but honest description of the place. Upload a few photos of it.

Then, you’ll set a price. Airbnb has tools for that, too. To get an idea of what other Airbnb hosts in your area are charging, Google “eclipse” and “Airbnb,” plus the name of your city.

A few other tips:

  • Be a good host, and make sure your place is stocked with the toiletries you’d expect at a hotel — toilet paper, soap and towels.
  • Be personable. A lot of travelers turn to Airbnb for the personal touch they won’t find at commercial properties.
  • Airbnb handles payments, so you don’t have to deal with money directly.
  • Hosting laws vary from city to city. Understand the rules and regulations applicable to your city and listing.
  • Airbnb offers a “host guarantee” that covers damage to your property.

The Sky Snapped Over the Sun Like a Lens Cover’

The total eclipse will pass over or near Salem, Oregon; Idaho Falls, Idaho; Casper, Wyoming; Omaha, Nebraska; Kansas City; St. Louis; Nashville; and Columbia and Charleston, S.C.

I’m told it’s amazing.

Here’s what author Annie Dillard had to say about it in her classic essay, “Total Eclipse.”

I had seen a partial eclipse in 1970. A partial eclipse is very interesting. It bears almost no relation to a total eclipse. Seeing a partial eclipse bears the same relation to seeing a total eclipse as kissing a man does to marrying him, or as flying in an airplane does to falling out of an airplane. Although the one experience precedes the other, it in no way prepares you for it.”

And then:

“At once this disk of sky slid over the sun like a lid. The sky snapped over the sun like a lens cover. The hatch in the brain slammed. Abruptly it was dark night, on the land and in the sky. In the night sky was a tiny ring of light. The hole where the sun belongs is very small. A thin ring of light marked its place.”

Act now, time is running out.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s thinking it’s time for a road trip.

 

It’s an unhappy fact of life: Sooner or later, the economy’s going to take another dive.

Sorry, but another recession is bound to happen in the next few years. And when it does, your future self is going to thank you for thinking ahead and getting ready for it.

Oh, wait, you haven’t done that? You’re totally unprepared for the next recession?

Well, don’t feel bad. Two-thirds of Americans are in the same boat, according to a new GOBankingRates survey. It found that most Americans’ finances are woefully unprepared to withstand another recession.

In the last U.S. recession, millions of Americans lost their homes, jobs or businesses. With that in mind, we’re here with six steps you can take to protect yourself from a recession and mitigate the damage it can cause you.

Recessions: Like a Bad Penny, They Keep Coming Back

Like we said, economic downturns are simply a fact of life.

Technically, a recession is when the economy declines for at least six months in a row. That typically leads to serious job losses. Our most recent downturn was called the Great Recession because it was the worst one since the Great Depression.

The Great Recession ended in 2009 -- eight years ago.

Historical data shows the U.S. averages a recession every six to seven years.

So we’re probably due for another one in the next few years. Nobody knows when.

And it doesn’t matter who’s in the White House. None of this is intended to be a political statement of any kind. The fact is, these same truths would apply whether Donald Trump or Barack Obama or Hillary Clinton were president.

Here’s how to prepare for a recession:

1. Start Hoarding Your Pennies

Could you live off your savings for six months? For a year? Don’t feel bad -- I know I couldn’t.

Start socking away a little cash to give yourself a financial cushion, an emergency fund in case you get laid off. Once you have an emergency fund goal in mind, figure out how much of each paycheck you’ll need to set aside to reach your goal in three months, six months, a year.

Stash and Acorns are two popular apps that offer easy, automatic ways to start saving and investing. They’re really useful for tricking your brain into saving more. You’ll invest without even realizing you’re doing it.

Stash sets up automatic stock market investments for you. It lets you invest as little as $5 into a set of simple portfolios reflecting your goals and your tolerance for risk. You can set it up to pull a specific sum of money from your bank account at regular intervals.

Once you connect the Acorns app to a debit or credit card, it rounds up your purchases to the nearest dollar and funnels your digital change into an investment account. You can have it automatically round up all your purchases, or only the transactions you choose.

2. Get a Side Gig

Losing your job would be a painful blow to your bank account unless you’re able to find new employment quickly.

That’s why it’s best to diversify your income if possible. The simplest way to do that is by starting a side gig.

You can hustle up extra money driving with Uber or Lyft on your own schedule.

Thanks to the growing gig economy, there are other ways to scratch up some extra cash nowadays. Craigslist is an easy place to sell your services under the “Gigs” section. And if you don’t trust Craigslist, check out TaskRabbit or Fiverr -- to name just a few.

3. Pay Down Your Debts

Here’s why credit card balances are the devil: If you don’t pay off your balance every month, interest charges will keep eating away at your income.

Paying off your credit cards now will free up money in the future -- money that will get you through hard times.

The average interest rate on credit cards these days is nearly 13%, or 16% for travel rewards cards. Instead of burning your money paying interest, take out a debt consolidation loan at a lower interest rate. An easy place to start is Even Financial, which can help you borrow up to $35,000.

If you have student loans, consider refinancing them through an online marketplace like Credible, where you can shop around for the best interest rates. That way, you can be confident the lower interest rate is worth the refinancing cost.

4. Adjust Your 401(k) or Your Investment Portfolio

When the last recession caused the stock market to plunge, Americans’ retirement savings took a beating. The nation’s 401(k)s and IRAs lost nearly $2.5 trillion in the last half of 2008 alone.

Take a look at your own 401(k) account. Are you too heavily invested in stocks? Consider your age, too. If you’re nearing retirement, put more of those funds into bonds.

Just don’t get carried away with that strategy. Before making any changes to your 401(k), keep in mind how many years you have until retirement. If you have decades of working ahead of you, keep your retirement funds in stocks so you don’t miss out on the market’s long-term growth.

To get more out of your 401(k) account, consider using an online robo-advisor like Blooom to help manage it for you.

5. Be a Superhero at Work

If a recession forces your employer to cut back, how can you position yourself to keep your job?

Non-essential employees get laid off first, so focus on making yourself indispensable. Don’t sleep on opportunities to acquire new skills or more responsibility.

6. Stay in the Hunt

Do you like your current job? Cool.

Just don’t get lulled into complacency. Be ready to look for a new job if you have to. Start with this:

  • Update your resume and your LinkedIn page.
  • Keep networking. Start networking before you need a job.

The upshot of all this: No one wants to see an economic downturn, but it’s inevitable that another one will come along. If you take these steps, you might be able to sail through the next recession in style.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s still recovering from the last recession.

I know we’re all supposed to be worried about robots taking our jobs, right?

Before you know it, machines will replace truck drivers and fast food workers and accountants, and maybe they’ve got their beady little robot eyes on your job, too.

Bummer.

But in the meantime, you may as well let the robot revolution work for you.

In that spirit, programmers at the San Francisco startup Trim have launched a useful new creation. It’s a bot that negotiates with cable TV giant Comcast for you.

The bot, a computer program designed to chat and interact with humans, will negotiate with Comcast customer service reps via online chat in an effort to lower your cable bill.

So you have this bot to do your haggling for you, while you sit back and don’t lift a finger. Truly this is a great time to be alive.

For me, this free tool is especially useful because, personally, dealing with customer service reps is one of my least favorite things. It’s right up there with dental work, engine trouble and overdraft statements.

Comcast: Like a Movie Supervillain, Only More Evil

And what better company than Comcast to sic your attack robot on? (Writer adopts Arnold Schwarzenegger accent: “Comcast, you are terminated.”)

C’mon, Comcast is probably America’s least favorite company.

With cable TV and internet customers in 40 states, Comcast is the largest media company in the world. Notorious for lousy service, it ranks near the bottom of the American Consumer Satisfaction Index. It’s the only company to win Consumerist’s “Worst Company in America” title twice.

So don’t feel bad when you unleash your cool new haggle-bot on Comcast.

Here’s How Trim Works

Comcast subscribers can communicate with the company by phone, email or Twitter, or also by online chat.

Trim noticed that when Comcast customer service employees chatting online with dissatisfied customers, they always stick to a simple, pre-written script of questions and answers, said Trim CEO Thomas Smyth. Trim figured it could build a chat robot capable of conversing with that limited script.

To use the bot, download Trim's Chrome web browser extension, then follow the instructions.

Powered by machine learning algorithms, the bot will negotiate with Comcast customer service reps using a series of canned arguments and responses.

The goal is to lower your monthly bill -- or at least get you a one-time statement credit.

“My grandmother was overpaying by $35 a month for Comcast, because they had raised her rate a little bit each year for the past decade,” Smyth told Fortune magazine. “I negotiated my grandmother's bill (saving her $420 per year) and wondered if there was a way to do that automatically.”

After making the bot available to the public in November 2016, Trim reported a 70% success rate at lowering customers' bills, with an average savings of $10 per month. Trim doesn’t take a cut from the savings, either.

Here’s Why Trim Does a Few Different Things

Here at The Penny Hoarder, we have long considered Trim to be a smart way to save money.

The app has previously been best known for helping its users get rid of unwanted subscriptions -- you know, subscriptions that you signed up for, put on a recurring payment and then forgot about. Right now, you might be paying Netflix, Spotify, Audible or Planet Fitness every month without even realizing it.

Once you sign up and connect your bank account and phone number, Trim analyzes your transaction history for recurring payments. When it finds one, the app sends you a text and cancels any subscriptions you don’t want to keep.

Trim says it’s building an online, artificial-intelligence assistant to help its customers with their finances. It says the subscription-cancellation service was just the beginning, and that the Comcast chat bot is a next step.

“We started with the easy stuff,” Trim says. “Need to cancel an old subscription? Trim started doing that way back in 2015. We built more nifty features that save you money, like automatic Comcast bill negotiation and price protection for your Amazon purchases.”

“Now we’re starting to work on the hard stuff.”

And so the robot revolution begins.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He doesn’t trust most robots, but chat bots are okay.

Like everyone else, David Edwards has a cell phone. And like everyone else, cell phone bills were bleeding him dry.

“I was with Verizon for many years. I got tired of paying $185 a month for three lines, and I didn’t even have a smartphone,” said Edwards, a 55-year-old marine science technician who lives in Tampa Bay, Florida.

Then his 27-year-old son told him about Twigby. Edwards made the switch and started saving a ton on his phone bill.

Now, he’s paying $24 a month for his single line. He can hardly believe it.

“So far, so good,” Edwards says, wrapping up his third month with Twigby. “I’m really happy with it.”

What is Twigby, exactly?

It’s a discount wireless carrier that’s making a splash in the incredibly competitive world of low-cost, no-contract cell phone service.

If you’re a company intent on surviving in that ultra-competitive business environment, your product has to be affordable -- really, really affordable. That’s job one.

“We keep the prices as low as possible,” says Twigby representative Chris Alarcon. “Price point is a big thing that we’re always monitoring.”

Beyond the Big Four

In the United States, just about every John and Jane with a cell phone uses one of the “Big Four” wireless carriers.

Verizon, T-Mobile, AT&T and Sprint have more than 412 million wireless subscribers collectively. These are big-time, mega-corporations with Super Bowl ads, celebrity spokespeople, storefront locations, and vast networks of cellular towers sprawling across this great land.

Then there’s everyone else -- a slew of independent providers, all competing for a small corner of the cell phone market.

“Maybe 95% of people are with one of the big carriers, and 5% are okay with more budget-friendly brands,” Alarcon says. “We’re in a hyper-competitive industry, with a lot of companies fighting over that 5% of the American population.”

And that brings us back to David Edwards, a guy who grew weary of paying through the nose to use his cell phone.

Making the Break from the Big Carriers

Like many other customers looking to leave the Big Four behind, Edwards had nagging questions about signing on with a discount carrier: Will my phone even work? Will I be dropping calls? Is this a legit business? How’s the coverage? Will customer service be there when I need it?

Edwards had tried a number of different discount wireless providers before, with mixed results. It didn’t always work out

He’s awfully pleased with Twigby, though

[caption id="attachment_58751" align="alignnone" width="1200"] Edwards' bill with Twigby is $24 for a single line compared to the $185 monthly bill he previously paid for Verizon. Tina Russell/The Penny Hoarder[/caption]

“The pricing structure is good. I’ve never had an issue with coverage,” Edwards says. “The customer support is simple to use. I’ve used it online a couple of times. Almost immediately someone was online with me, so I didn’t have to wait and wait and wait.”

Spoken like a man who’s previously had to wait for ages for customer service to get back to him.

When it comes to pricing, here’s the lowdown on what Edwards pays: It’s $21 per month (before tax) for unlimited minutes, unlimited texting, and 500 megabytes of data. That’s for one phone.

Last month Edwards paid $25 (before tax) because he ended up using more than 500MB of data. So he got bumped up to Twigby’s 1-gigabyte plan, which is $4 extra.

“If you go over, you can choose to have it automatically bump you up to the next level,” he explains. “You only pay for what you use. That’s very attractive.”

For more info, here’s Twigby’s pricing structure for voice minutes and data.

With Twigby, Edwards is paying $24 a month for one smartphone.

Just to be clear, back when he was with Verizon, he was paying $185 a month for three lines -- a smartphone for his son, and flip phones for Edwards and his mother.

At different times in the past, he had cell phone service through Verizon or Sprint. He also tried discount carriers like Page Plus Cellular and then RingPlus, which went out of business earlier this year.

“RingPlus was pretty horrible,” he recalls with a rueful chuckle.

His phone, a Motorola Moto G5 Plus Android smartphone, works fine on Twigby’s network. Twigby sells a large assortment of phones (17 at our press time). You can also use this online tool to see if your current phone is compatible with Twigby’s service.

Customer Service a Key Selling Point

Twigby launched in late 2015 and has been gaining momentum ever since, company officials say.

It’s an MVNO, a Mobile Virtual Network Operator. There are dozens of these companies that buy connection wholesale from the big wireless carriers and resell it to customers.

WhistleOut, a website that compares wireless plans, explains how this business model works: “Essentially, all of the MVNOs buy service in bulk at wholesale prices, then resell that same service on to us. But because they have lower overheads, smaller advertising budgets and many don’t stock handsets, they can offer the same products as the big networks but at much cheaper rates.”

Twigby is on Sprint’s cellular network for voice calls, texting and data, and uses Verizon’s network as a backup for calls and texting

A number of these smaller wireless providers have been criticized for poor customer service -- too slow, haphazard and difficult to understand.

Edwards recalls: “When I was with RingPlus, for their customer service you had to fill out a service ticket, and it would take days to get a problem solved.”

Well aware of these kinds of criticisms, Twigby has taken pains to make sure its customer service is prompt, efficient and helpful. Instead of a call center for customer service, the carrier has an online chat feature.

“Our chat team replies super quickly to any questions,” Alarcon said.To compete, we’re differentiating ourselves based on how accessible we are to our subscribers -- how easy it is to get in touch with us.”

As for Edwards, he’s been easing into semi-retirement and is pleased to have found an affordable, reliable cell phone service

Although some Twigby subscribers are retirees, many are on the other end of the age spectrum. They’re children and young teens whose parents are getting them bargain cell phone plans.

“I used to pay an arm and a leg for the exact same service,” Edwards said. “I’m really happy with (Twigby).”

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s clearly paying way too much for wireless service.

What am I doing wrong? That’s what I always want to know.

Sure, I like positive reinforcement, too: Don’t worry, you’re doing a great job as an employee/spouse/parent/human being.

But, good vibes aside, I need to know what I’m doing wrong. What do I stink at?

This also applies to managing my money. What could I be doing better? What am I not thinking of? What are my blind spots?

No one tells us this stuff, you know? Especially when we’re young and just starting out.

We need money advice!

That’s why The Penny Hoarder asked a panel of eight whiz-bang financial advisors this question:

What is a common financial mistake that beginners make?

On Retirement Plans

“Failing to take advantage of company retirement plans is a common mistake that younger people make. Many plans will offer matching contributions when an employee contributes to a 401(k) retirement plan. For those who participate, this is an immediate and substantial return on their savings investment.”

-- Kevin Gahagan, chief investment officer, Mosaic Financial Partners, San Francisco

On Not Cashing Out Retirement Funds

Common financial mistakes young people make:

  • Leasing cars vs. buying more affordable used cars
  • Overspending on lifestyle without paying yourself first
  • Using credit cards to make purchases you can’t afford
  • Taking on too much student loan debt relative to starting salary of future occupation
  • Not taking full advantage of employee benefits like 401(k), HSA, FSA, tuition reimbursement, matching charitable donations, etc.
  • Buying a home based on what the bank pre-qualifies you for, not what your budget allows
  • Borrowing from retirement accounts for purposes other than retirement
  • Cashing out old retirement plans with small balances when changing jobs vs. rolling them over

-- James M. Matthews, managing director of Blueprint, a financial planning firm in Charlotte, N.C.

Penny Hoarder tip: Always, always roll over that 401(k) from your last job! That stuff is gold! Never cash it out. An online robo-advisor like Blooom can help manage your 401(k) for you because, chances are, it can probably be doing more for your retirement.

On Investing Early

“Beginning investors are presented with literally a once in a lifetime offer. They can start their investing early and allow the benefits of compounded growth to work for them.”

“We speak with people every week who say that they want to invest in such a way as to avoid risk, so they’re thinking a CD or U.S. savings bond. We like to point out that taking moderate risk at the beginning … is likely to be the least risky approach over their entire lifetime.”

-- Warren A. Ward, WWA Planning & Investments, Columbus, Indiana

Penny Hoarder tip: One way to start investing early is to use an app like Acorns. Once you connect it to a debit or credit card, it rounds your purchases up to the nearest dollar and funnels your digital change into a savings or investment account. Because the money comes out in increments of less than $1, you’re less likely to feel an impact in your bank account.

On Credit Cards

“Accruing credit card debt is by far the biggest financial mistake young people will make. They have grown up with credit cards as a norm, and don’t understand the concept of the interest and the need to pay those bills off monthly.”

-- Karen Lee, president, Karen Lee & Associates, Atlanta, Georgia

Penny Hoarder tip: Pay off your credit card balance religiously every month to avoid falling behind and getting swamped by interest charges. Plus, with a cash-back rewards card, you can get paid for every dollar you spend. We recommend checking out the Barclaycard CashForward World MasterCard. You’ll earn 1.5% cash back, plus a $200 bonus for signing up.

On Saving Enough

They don’t save enough. They should work on hitting at a minimum of 15% of their GROSS income. I suspect the millennials are going to live longer than any other generation to date. This is going to require them to work longer and save more.”

-- Brett Anderson, president, St. Croix Advisors in Hudson, Wisconsin

Penny Hoarder tip: Not all of us are in a position to save 15% of our gross annual income. But most of us could probably be saving more.

On Procrastinating

“Procrastinating saving for retirement even when they know they need to start early. I've noticed that millennials are a generation comfortable with digesting large amounts of content online. When we have a question, we Google it. We’re used to finding our own answers and tend to hold a ‘do-it-yourself’ attitude.”

“With financial and investment decision-making, however, this can become a crutch -- there is so much information to wrap your head around that it's easy to suffer from ‘analysis paralysis’ and keep putting off investing because you want to do it perfectly.”

-- Justin Chidester, owner of Wealth Mode Financial Planning in Logan, Utah

Penny Hoarder tip: Keep it simple. Stash, a super basic investing app, automatically pulls a few bucks from your checking account each week. It invests your money in a set of portfolios reflecting your beliefs, interests and goals. It does everything for you. No paralysis from analysis.

On Being Duped by Insurance Salesmen

The biggest mistake I see millennials making is being duped by insurance salesmen. Everyone needs insurance, but a very small subset of young people need the insurance that is sold by most ‘financial advisors.’”

“ALWAYS get a second opinion from someone that does not focus on life insurance before moving forward with any recommendation.”

-- Andy Yadro, financial planner with Googins Advisors in Madison, Wisconsin

Penny Hoarder tip: You might still consider a basic life insurance policy, which could be useful for paying off your funeral, mortgage or car loans. Companies like PolicyGenius offer streamlined ways to get it. Unlike traditional providers, this online-only platform provides instant decisions on coverage applications. 

On Not Getting Started

The biggest mistakes young people make are:

  • Not taking full advantage of a company 401(k) match, as many are giving up free money!
  • Not starting with investing. My suggestion is to start by investing in a target-date age based fund, which corresponds to the year of retirement (or age 65).

-- Ben Westerman, senior vice president, HM Capital Management, St. Louis

There. Now you know everything you’re doing wrong. Enjoy your free money advice.

Time for some positive reinforcement: You made it to the end of the article! You’re obviously very smart and focused and have a bright financial future ahead of you!

Virge and Cheryl Cavalli were at a crossroads.

After 12 years of raising two daughters as a stay-at-home mom, Cheryl wanted to go back to work. But she needed the flexibility to be available for her children as they became busy teenagers.

She found the ideal opportunity: She’d launch a business as a home-based travel agent who provides personalized service to her clients. It was the perfect fit for Cheryl, a veteran traveler who had always loved planning out her family’s vacations.

And after suffering for years, the travel agent industry has been rebounding as more travelers are finding value in their services. Travel agents can save their clients time, money and hassles, as well as make sense of the glut of information available online, and find the best promotions and deals.

Now, while Virge continued commuting to his office for his business development job, Cheryl would work from home, planning her customers’ trips from door to door -- cruises, resorts, trips to Disney or Universal theme parks, transfers, tickets, excursions, events, the works.

She would also have the flexibility to take off in the middle of the day if one of their 10- or 12-year-old daughters got sick or needed to be dropped off at team practices after school.

First, though, the couple would need to figure out the challenges that come with starting your own business.

Some Big Decisions Right Off the Bat

Before they could officially launch the business, Virge and Cheryl had some research to do.

Legal Stuff

They didn’t have to start a corporation. But under the state laws of New Jersey, Cheryl had to register as a sole proprietor -- basically a one-person business. That was pretty simple. So was registering online for a state business certificate and a business tax number.

Cheryl opened a business bank account. She also learned she’d need errors and omissions insurance, a form of professional liability insurance.

For newbies thinking about starting a business, the U.S. Small Business Administration has this useful checklist of 10 steps you should take. They include figuring out your business structure, filing to pay taxes, and acquiring a business license.

Social Media

Cheryl had previously used Facebook mostly to post cute photos of her children. She had a lot to learn about how to use various social media platforms to promote her business and educate people about travel. “I’m asking my kids, ‘How does Snapchat work?’”

Savvy entrepreneurs follow a few best practices for social media. Whatever social media platform you’re using, you have to strike a balance between engaging your audience and too much self-promotion.

Most of your posts should be sharing useful or interesting content.

Marketing

With a home-based business like Cheryl’s, you don’t have a brick-and-mortar office location for the public to see, so it’s crucially important to trumpet the fact that your business exists.

Cheryl spent her first year in her new career learning what kind of marketing works for her and what doesn’t -- which business networking group to join, which community fairs she should rent a table at.

Marketing your own small business is a challenge. It’s important to attend networking events and to not be shy. Get your name out there!

Look into whether email marketing could work for you. Have a short and interesting “elevator pitch” about what you do.

Website

Her new business would need a website, obviously. She chose the name PipeDreamVacations.com because it spells out what her business is all about.

A good website is crucial. Here’s a story about a woman who built her own business and its website in 30 days on the cheap.

Startup Costs

The Cavalli’s figured they’d need $20,000 to get her new business off the ground.

That would cover start-up costs, like marketing, business cards, trade show fees, launching the website, and a keeping a cash cushion while she was building up her clientele. It would also enable her to become a travel agent with Cruise Planners, the nation’s largest home-based travel agent franchise network.

Entrepreneurs use different ways to pull together their startup money. Some use crowdfunding, like this young inventor who started a business while he was still in college. Others look for investors.

Virge and Cheryl decided to borrow the money. One problem: They dreaded the prospect of filling out piles of paperwork for a home equity loan, and the endless hassle of shopping around for the best interest rates and loan terms.

“We weren’t looking forward to jumping through all those hoops,” Virge recalls.

That’s when they found Even Financial. Virge went to the website, typed in the couple’s information, and it produced a series of personalized loan offers.

“All of the major loan providers were presented in a very simple table -- what their rates were, what the terms were,” he said. They got a $20,000, three-year loan with a 5.9% interest rate from SoFi, an online personal finance company.

‘Building Something of My Own’

Have you ever thought about starting your own work-at-home business? Creating your own flexible schedule? Working in your pajamas?

Here are three other people who started theirs from scratch, with the help of online courses. One started taking courses from Transcribe Anywhere. Another started taking a course called Learn to be a Bookkeeper, and a third took online courses from Proofread Anywhere. Each makes at least $1,200 per month.

As for Cheryl, she launched her business a year ago. Since then, she has taken to her new career like a duck to water.

She’s been steadily building a base of clients. She has also mastered the art of being a long-distance Mrs. Fix-It if one of her traveling clients runs into a jam while on vacation.

“I love it. It’s a 24/7 job, and dinner has been late a few times,” she says, laughing. “But I can arrange most of my day around my kids’ schedule, and participate in their school and sport activities.”

“I get to do something I’m passionate about, and I’m building something of my own.”

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He needs to start traveling again.

What is robo-investing?

Is that like when Robocop puts down his huge robot gun, pulls on a green accountant eyeshade and starts handling your investments?

“Citizen, my programming indicates that your portfolio requires more mutual funds.”

No. That’s not it at all. Not even close.

Robo-investing is when online financial companies use sophisticated software instead of human stockbrokers to manage your investments. That way, the companies can keep fees super low.

Two of the dominant robo-investing companies are Betterment and Wealthfront. In many ways they’re very similar. But there are important differences between the two, so let’s compare them.

Launched in 2008, Betterment is considered the pioneer of robo-investing. It’s now managing $9.5 billion in assets. Wealthfront, which moved into robo-investing in 2011, is managing $5 billion in assets.

Betterment is based in New York, Wealthfront in Silicon Valley.

The Epitome of ‘Set It and Forget It’

The two companies are strikingly similar. They have the same basic business model, designed for long-term investors who want a professionally managed portfolio at a rock-bottom price.

Each company’s website asks you about your age, when you hope to retire, and your tolerance for risk.

Based on your answers, it’ll funnel your investment money into a portfolio of low-cost index funds that track the stock market as a whole.

Both companies use software robots -- proprietary programs that act as automated advisers -- to steer your investments and cheaply do things stockbrokers and money managers would charge you high fees to do.

The Robo-Adviser Industry, Nearly a Decade Old

If you’re trying to decide between Betterment or Wealthfront, consider how they’re different:

Minimum Deposit

Wealthfront requires a minimum deposit of $500 to open an account. (It used to be $5,000.) In contrast, Betterment requires no minimum deposit.

Fees

Let’s assume you’re opening a tax-deferred account like an IRA. That’s what most people do with these companies.

Betterment and Wealthfront each charge the same annual management fee of 0.25% of your investments. For example, if you invest $10,000, you pay them $25 a year to manage it.

Except that Wealthfront doesn’t charge any fees for your first $10,000. And if you invest more than $2 million with Betterment, it caps its fees at a maximum of $5,000.

Types of Accounts

Both companies handle 401(k) rollovers and several kinds of investment accounts -- traditional and Roth IRAs, trusts, and taxable accounts. However, Wealthfront also offers 529 college savings plans. Betterment doesn’t offer a 529 plan, but has goal-setting tools to help you save.

Refer a Friend

For every friend or relative you refer to them, Wealthfront will manage an additional $5,000 of your assets for free. Betterment offers one free month of service for every referral, and one free year for every three referrals.

Speak to a Human

For an additional fee, Betterment will arrange for you to speak with an actual human advisor, not just a robo-adviser.

A plan called “Betterment Plus” charges 0.40% instead of 0.25%, but gives clients unlimited advice via email and one financial planning call per year. “Betterment Premium” charges 0.50% and offers unlimited email and unlimited phone calls with advisors. These plans require a minimum balance of $100,000.

Goal Setting & Guidance

Both websites offer retirement planning tools. Betterment has “RetireGuide,” while Wealthfront has “Path.”

However, Betterment also helps you create personal savings goals right from the beginning when you sign up and answer their questions. You can customize your Betterment accounts to aim for four different kinds of goals: “retirement,” “safety net,” “wealth building,” or “major purchase.”

Socially Responsible Investing

Betterment recently launched socially responsible investing (SRI) portfolios. The site explains that this is an approach to investing that reduces exposure to companies that are deemed to have a negative social impact. For example, companies that profit from poor labor standards or environmental devastation. These portfolios also increase exposure to companies that are thought to have a positive social impact, like fostering inclusive workplaces or committing to environmentally sustainable practices.

Betterment vs. WealthFront: Which is Best for You?

Here’s the million-dollar question, and it’s a tough one.

Which is better?

“The answer to that question depends on many factors and is not a simple, straightforward answer,” says Investor Junkie, which compared the two. “Unlike other comparisons we’ve done, this one doesn’t have a clear winner.”

InvestorMint compared the two and concluded, “Management fees and expense ratios are almost identical at Betterment and Wealthfront … Both feature good retirement planning tools, though Betterment goes a step further in offering goal setting features.”

It was those goal-setting features that convinced business development strategist Michael Gardon. Writing for the personal finance website The Simple Dollar, he compared the two robo-advisers and chose Betterment because it helps you set financial goals.

Novice investors and those saving for multiple goals at once would be a great fit for Betterment’s services. Just answer the questionnaire, set your goals, and forget it -- Betterment takes care of the rest,” he wrote.

“What’s more,” he wrote, “Betterment requires no minimum investment, opening the door to first-time investors who might have minimal funds starting out.”

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He definitely needs to invest more.

They call themselves The Minimalists. It’s a nice, simple name.

Eight years ago, childhood friends Joshua Fields Milburn and Ryan Nicodemus were making lots of money, working 60-80 hours a week in corporate jobs. They had luxury cars, big houses, designer clothes. 

And they were miserable.

Stressed, depressed and in debt.

So they quit their jobs and sold or donated most of their stuff. They embraced a minimalist lifestyle, preaching the benefits of living simple, meaningful lives with less.

They own less, buy less, and spend their time with a close-knit group of peers, friends and family who motivate them.

They’ve written three books, launched a website and produced a documentary. They’re probably best-known for their chart-topping podcast.

All in all, they’ve built an audience of some 20 million people.

Here’s what happened when The Penny Hoarder talked with Milburn, 36, about what’s really important in life.

The Penny Hoarder: Let’s start with the basics. What is minimalism?

Joshua Fields Milburn: Minimalism allows us to identify what is essential in our lives and what is non-essential. It helps us get rid of what’s non-essential so we can focus on life’s most important things -- which aren’t things at all.

TPH: Tell us more about how you got started down this path.

JFM: When I was 28, I was living the American dream. I had a six-figure salary and a big suburban house with more toilets than people. Then in the same month, my marriage ended and my mom died. I had to deal with all her stuff.

(It was 65 years worth of stuff. At first Milburn was going to box it all up and put it in storage, probably forever. Then he realized his memories of his mother weren’t in her stuff. He photographed the things that mattered to him, then got rid of everything. That got him started doing the same in his own life.)

JFM: This one-two punch happened in my life and forced me to look around at what had become my life’s focus -- the accumulation of stuff. I might have been living the American Dream, but it wasn’t my dream. Maybe what I thought I wanted actually wasn’t what I wanted at all.

Over eight months, I got rid of 90% of my material possessions. I felt freer and happier and lighter. Now every possession serves a purpose.

TPH: That’s going to sound extreme to some people. What’s a simple first step that someone could try out?

JFM: Ryan and I aren’t trying to proselytize. We’re just sharing a recipe that’s worked for us. Minimalism is a tool that has allowed me to live more deliberately.

Get rid of the stuff you don’t like very much or that you’re holding onto “just in case.” But it’s more than just decluttering. First, ask yourself: How might your life be better with less? The answer is different for everyone.

How might my life be better with less? Maybe I’ll be able to regain control of my finances. Maybe I’ll focus more on my health. Maybe my relationships will improve. Maybe I’ll reclaim my time and my creativity, and work on that passion project. Or maybe I’ll just have a cleaner house.

TPH: People sometimes latch onto an idea like this, but then fail to follow through. How do you suggest they keep it up?

JFM: The cool thing about letting go is that, once you gain momentum in embracing minimalism, it gets easier by the day. The more you do, the better you feel.

For me, getting rid of a few shirts led to half a closet. A few DVDs led to getting rid of my entire library.

But all the clothes I have now are my favorite clothes. And it’s not like I got rid of everything. If you walked into my home right now, you would probably just think: “Whoa, this family is tidy.”

The average American household has more than 300,000 items in it. But for me, every possession serves a purpose or brings me joy. I get far more value from the few items I own now than if they were watered down with 300,000 other items.

High-Tech Help Getting Started

[caption id="attachment_61165" align="aligncenter" width="1200"]Joshua Fields Milburn, left, and Ryan Nicodemus Joshua Fields pose in front of mountains. Joshua Fields Milburn, left, and Ryan Nicodemus reach 20 million through their website, books, podcast, and documentary with tips on how to live well with less. Photo by Joshua Weaver[/caption]

So, how do you get started getting rid of your old stuff?

Once upon a time, your best bet would have been to have a garage sale. Nowadays, apps make it easy to sell your stuff.

We like Decluttr -- which sells your old CDs, DVDs, Blu-Rays, cell phones, tablets, video games and gaming consoles.

You scan your media with your phone, and Decluttr sends you a free shipping label.

One user, Gil Flores, sold about 100 DVDs and 75 CDs — he had so many, he said, that he’s not certain of the exact number anymore — and made $275, an average of $1.57 each.

Another simple app is Letgo, which lets you sell just about anything. Just snap a photo of your item, and set up a listing in about 30 seconds.

Hoarding old textbooks? Someone will probably pay you for them! Just search the book’s ISBN on Bookscouter, and the site will connect you with more than 25 of the best-paying and most reputable online buyback companies.

As for The Minimalists, there’s one more cool thing we’d like to mention.

They’ve had tens of thousands of people play something they call the 30-day minimalism game, where you compete with a partner to start jettisoning items each day.

Take the challenge with a friend, relative or roommate. On the first day, each of you gets rid of one thing. On the second day, two things. Three items on the third. And so forth and so on.

Donate, throw away or sell your electronics, clothes, furniture, knickknacks, decorations, etc. They need to be gone by midnight.

It’s easy at first.

After a couple of weeks, it starts getting harder.

But if you both make it to 30 days, everybody wins.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. This is the first of two posts about The Minimalists, with the second part coming soon.

Gather around for today’s lesson, won’t you?

We’ll call it Credit Scores 101. Here are the basics:

  • Credit scores range from 300 to 850.
  • That’s lower than 700, which is widely considered to be a “good” score.

Naturally, we know the best way to raise a low credit score is to strategically pay down your debts and to correct false information in your credit history.

Ah, but here’s what we don’t know: What about those black marks on your credit history you can’t do anything about? For example, do you have any late or missed payments on your credit cards or car loans?

Does that bad stuff come off your credit report after a while? And what happens to your credit score when it does?

Now FICO has the answer. The credit scoring company analyzed its own data to get the details.

Delinquencies, like late payments, typically get removed from your credit report after seven years, thanks to a federal law called the Fair Credit Reporting Act.

That improves your credit score. But by how much?

Here’s what FICO found out:

  • People who had a single delinquency removed from their credit report this way saw their credit scores go up an average of 14 points.
  • People who had all of their remaining delinquencies removed from their credit report saw their scores increase by an average of 33 points.

The More You Know

One of the key lessons here: It’s worth knowing what’s in your credit report.

As Money Talks News point out, “FICO’s research highlights the importance of your credit report -- knowing what’s in it, checking it regularly and disputing errors and other negative information.”

An easy way to do that is to sign up with a free service like Credit Sesame. This tool shows your balance on any unpaid bills, credit cards or loans. It offers personalized tips on reducing your debt and raising your credit score.

It’s a good way to raise your credit score more than 14 points at a time.

Take the example of North Carolina business owner Kenneth Bain. He signed up for Credit Sesame and found out he had a low credit score of 487. Just seven months later, he’d raised it by a whopping 234 points, to 721.

Bain was surprised to find some very old -- and fully paid -- hospital bills mucking up his score, as well as some other things that were incorrectly reported.

“I looked at what was there (on my credit report) so I would know what I should change, correct and challenge,” Bain said. “I used Credit Sesame as a compass to tell me where to go.”

So, just to sum up:

  • When an old delinquency gets taken off your credit report after seven years, your credit score might go up about 14 points.
  • Arming yourself with information, paying down your debts and challenging false data in your credit history could raise your score by hundreds of points.

And a better credit score means a lot when it’s time to get a mortgage, a credit card or a car loan.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. His credit score isn’t quite as terrible as it used to be.

Step aside, debit cards. Move over, cash. Get lost, checks.

Credit cards are now officially Americans’ preferred form of payment.

This is a big change, and it’s happening because consumers are increasingly drawn to the rewards credit cards help them earn.

These days, the credit card industry as a whole is ramping up its rewards programs to compete for affluent customers.

Here at The Penny Hoarder, we’ve noted before that Americans love using a credit card. Just recently, Americans’ collective credit card debt topped $1 trillion, its highest level since the 2008 recession.

However, this is the first time credit cards have pulled ahead of debit cards and cash as shoppers’ preferred way to pay for stuff, according to the most recent U.S. Payment Study conducted by payment processing company Total Systems Services (TSYS).

This is the sixth year that TSYS has conducted the study. It surveys 1,000 consumers who have at least one credit card and one debit card.

Here are a few things we learned from the study:

  • About 40% of respondents chose credit cards, compared to 35% for debit cards and 11% for cash.
  • The more money people make, the more they prefer credit cards.
  • Older millennials -- those aged 25 to 34 -- are the most fond of credit cards, with about 57% saying they prefer them.
  • Younger millennials -- those aged 18 to 24 -- are the least likely to use credit cards. At this point in their lives, they prefer debit cards.

Apparently when you turn 25, the Magical Credit Card Fairy appears in a puff of smoke and glitter and hands you a Chase Freedom card.

What You Should Keep in Mind About Using a Credit Card

Don’t let that shiny platinum go to your head. Get the best credit card you can.

One way to do this: Sign up with a free service like Credit Sesame, which can help you search for smart credit cards, ones that might best benefit your lifestyle. It also lets you see your credit score and offers tips for reducing your debts.

Another option: With a cash-back rewards card, you can get paid for every dollar you spend. We recommend checking out the Barclaycard CashForward World MasterCard. You’ll earn 1.5% cash back, plus a $200 bonus for signing up.

Here’s a list of 10 reasons you should use a credit card instead of cash. Remember, though: To avoid spending lots of your hard-earned money on interest, pay off your balance every month.

Credit cards aren’t for everyone. We only recommend using them if you know you can be responsible.

Advertiser Disclosure: Many of the credit card offers that appear on this site are from credit card companies from which ThePennyHoarder.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). We do not feature all available credit card offers or all credit card issuers.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s a debit card guy.

Every time you flip a coin, they’re looking back at you. Whenever you handle a crisp new bill, there they are.

Their faces are on our currency. So what can they tell us about money management?

To celebrate Independence Day, here are the financial lessons we’ve learned from the Founding Fathers and American giants whose portraits are on our legal tender.

Next time you pull out a little cash, take a look at the face on it.

Ask yourself, What would they do?

The $1 Bill -- George Washington

[caption id="attachment_60362" align="aligncenter" width="1200"]money management Panama7/Getty Images[/caption]

The father of our country is also on the quarter.

Aside from being a Revolutionary War general and our first president, Washington was a shrewd businessman who diversified his assets.

He owned 35,000 acres of farmland. But when the price of tobacco dropped, he planted wheat instead. He rented out land, had fisheries on the Potomac River, and charged for the use of his docks.

As commander of the Continental Army, he didn’t take a salary. But he kept meticulous records and got reimbursed for all his expenses, including every meal of mutton and potatoes.

The lesson: Don’t put all your eggs in one basket.

Don’t depend on just one thing. An app like Stash will invest your money in a set of portfolios reflecting your beliefs, interests and goals. It’ll pull a specific amount from your bank account at regular intervals, so you can grow those investments over time.

The $2 Bill -- Thomas Jefferson

[caption id="attachment_60364" align="aligncenter" width="1200"]money management FierceAbin/Getty Images[/caption]

He’s also on the nickel, which is way more common than the $2 bill.

The man who drafted the Declaration of Independence wasn’t great with money. Jefferson lived way beyond his means, spent a fortune on wine, and was constantly renovating his plantation, Monticello.

He died in debt.

The lesson: Stick to a budget and save some money. Start a rainy-day fund with a high-yield bank account. Online bank Aspiration’s Summit Checking account has no fees, no minimum balance, and pays up to 100 times more interest than an average checking account.

The $5 Bill -- Abraham Lincoln

[caption id="attachment_60366" align="aligncenter" width="1200"]money management Yamtono_Sardi/Getty Images[/caption]

Honest Abe is also on The Penny Hoarder’s favorite coin. You may have read that somewhere.

Lincoln said a great many quotable things. There’s this: “A house divided against itself cannot stand.”

And this: “The best way to predict your future is to create it.” And this: “Success is going from failure to failure without losing your enthusiasm.”

Here’s my favorite: “Give me six hours to chop down a tree, and I will spend the first four hours sharpening the axe.”

He was a planner, Lincoln was. Always making plans. That’s how a guy born in a log cabin in the backwoods of Kentucky grows up to become one of our greatest presidents.

The lesson: Make a plan. Sign up with a free service like Credit Sesame. This tool shows your balance on any unpaid bills, credit cards or loans. It offers personalized tips on reducing your debt and raising your credit score.

The $10 Bill -- Alexander Hamilton

[caption id="attachment_60367" align="aligncenter" width="1200"]money management lozan365/Getty Images[/caption]

Man, this guy was fascinating. Somebody should write something like a Broadway rap musical about him.

Just kidding -- C’mon, like that would ever happen.

Hamilton was a financial visionary who steered our young nation out of economic turmoil and founded our first national bank and the U.S. Mint. But, like Jefferson, he was not great with money.

After he was killed in a duel with Vice President Aaron Burr (and you thought today’s politics were tough), his death left his wife and seven children virtually penniless. Mourners at his funeral had to pass around a hat to pay for his burial.

The lesson: Make sure your family will be taken care of if you die. Consider a life insurance policy, which could be useful for paying off your funeral, mortgage or car loans.

Companies like Haven Life offer streamlined ways to get life insurance. Unlike traditional providers, this online-only platform provides instant decisions on coverage applications. Some qualified, healthy applicants up to the age of 45 may even get to skip the medical exam most providers require.

The $20 Bill -- Andrew Jackson/Harriet Tubman

[caption id="attachment_60369" align="aligncenter" width="1200"]money management omersukrugoksu/Getty Images[/caption]

Hmmmmm, here’s a tricky one.

At the moment, Andy Jackson is the face on your $20 bill.

Our seventh president acted as the voice of the common man, speaking in plain language to the people at large. But he was also a slave owner whose Indian resettlement policies drove thousands of Native Americans to their deaths.

So he’s being replaced on the $20 by Harriet Tubman, an escaped slave who freed other slaves via the Underground Railroad. She’ll appear on the $20 and Jackson will move to the rear of the bill sometime after 2020.

[caption id="attachment_60370" align="aligncenter" width="1200"]money management Photos.com/Getty Images[/caption]

Harriet Tubman was … well, Harriet Tubman was a badass.

A tiny, 5-foot-tall, gun-toting African American woman who snuck onto slave plantations before the Civil War. Carried scars from being whipped as a child. Served as an unpaid Civil War nurse, treating soldiers dying from smallpox and dysentery. Supported herself by selling pies and root beer, which she made in the evenings. Lived in poverty until she eventually got a small government pension.

I don’t know if we have a nice, neat financial lesson to take from Harriet Tubman, other than maybe this: Know your worth. Never give up.

The $50 Bill -- Ulysses S. Grant

[caption id="attachment_60372" align="aligncenter" width="1200"]money management Panama7/Getty Images[/caption]

Another guy on our money who lost all his money.

After commanding the Union Army during the Civil War, and serving two terms as president, Grant was struck by financial disaster. He became a partner in a financial firm, which went bankrupt and left him penniless.

About then, he also learned he had terminal cancer.

As Grant’s official White House biography says, “He started writing his recollections to pay off his debts and provide for his family, racing against death to produce a memoir that ultimately earned nearly $450,000. Soon after completing the last page, in 1885, he died.”

The lesson: Hustle.

Hustle, hustle, hustle.

You can hustle up extra money driving for Uber or Lyft on your own schedule.

Thanks to the growing gig economy, there are other ways to scratch up some extra cash nowadays. Craigslist is an easy place to sell your services under the “Gigs” section. And if you don’t trust Craigslist, check out TaskRabbit or Fiverr -- to name just a few.

The $100 Bill -- Benjamin Franklin

[caption id="attachment_60373" align="aligncenter" width="1200"]money management Sergdid/Getty Images[/caption]

Hands-down our most quotable Founder, Ben Franklin earned much of his wealth by writing “Poor Richard's Almanack,” an annual book about being diligent and frugal.

He famously coined the phrase, “Early to bed and early to rise makes a man healthy, wealthy and wise.”

We’re more interested in another famous quote of his: “A penny saved is a penny earned."

The lesson: Save your pennies. They add up.

Consider trying an app like Acorns. Once you connect it to a debit or credit card, it rounds your purchases up to the nearest dollar and funnels your digital change into a savings or investment account. Because the money comes out in increments of less than $1, you’re less likely to feel an impact in your bank account.

The Dime -- Franklin Delano Roosevelt

[caption id="attachment_60374" align="aligncenter" width="1200"]money management brianpasko/Getty Images[/caption]

Why is FDR on the cheap little dime? He was a wealthy man from a wealthy family. Why isn’t his face on the $100 bill or something fancy and swank like that?

Because Roosevelt knew the power of dimes. He was in a wheelchair because he had polio. As president, he encouraged people to donate to find a cure for the disease.

This was during the Great Depression, mind you. People didn’t have a lot to give. But FDR believed that if every American donated just one dime, we could find a cure. This led to the March of Dimes -- and to a cure for polio.

The lesson: Every dime counts. Investing even a small amount now can pay off in a big way down the road.

You only need $5 to start investing with Stash, a super simple investing app. It basically does everything for you. Plus, when you sign up through this link, Stash puts $5 in your account!

The Half Dollar -- John F. Kennedy

[caption id="attachment_60376" align="aligncenter" width="1200"] Black and white image of a pile of John F. Kennedy half dollars.[/caption]

Ask not what your bank account can do for you, but what you can do for your bank account!

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He thinks Teddy Roosevelt is getting a raw deal here.

Have you ever whipped out a flashy platinum credit card to pay your tab at a bar or restaurant?

Or have you seen someone else do it?

It looks cool, right? It’s downright impressive. Oooohhh, a platinum card. FANCY.

According to new research, however, that flashy credit card may be a sign of low self-esteem.

If you can’t afford a Porsche or a Jaguar or the latest fashions from Armani or Gucci or Fendi or Prada, then brandishing a platinum credit card in a social setting is another way of showing off a status symbol.

It can serve as an achievable way of improving your social image and building up your self-esteem, according to a new study by economists from the University of Chicago, the Sao Paolo School of Economics, UCLA, the World Bank and Harvard.

Here’s the catch: Financially, you’re better off with an ordinary credit card. A less-flashy card that offers cash back or other discounts.

An Average Joe or Plain Jane credit card might not be a self-esteem boost, but it would serve you better than that super sexy platinum card.

Not So Exclusive Anymore

Historically, gold or platinum cards came with higher credit limits. They were symbols of prestige, signifying that cardholders belonged to an exclusive club of high rollers.

That’s no longer the case.

These days, platinum cards often have higher fees than ordinary credit cards.

The economists who conducted the recent study on self-esteem and credit card use tried this experiment: They offered people a platinum card that didn’t offer any cash-back rewards.

They found that nearly half of these platinum cardholders used their flashy card in social settings -- even though they had another card that would’ve gotten them cash back on their purchase.

“Platinum cardholders … appear willing to pay a cost to show off their platinum cards,” the researchers wrote.

Here’s What to Do Instead

Don’t let all that shiny platinum go to your head. Instead, just get a better credit card.

One way to do this: Sign up with a free service like Credit Sesame, which can help you search for smart credit cards, ones that might better benefit your lifestyle. It also offers tips for reducing your debts and raising your credit score.

Another option: With a cash-back rewards card, you can get paid for every dollar you spend. We recommend checking out the Barclaycard CashForward World MasterCard. You’ll earn 1.5% cash back, plus a $200 bonus for signing up.

Status Symbols: Even Pricier Than Expected

A platinum card is only one of the tempting status symbols that can backfire on you financially.

  • If you buy a fancy car, you’ll pay more for auto insurance.
  • If you buy a big house, you’ll probably pay more for maintenance and repairs.

Moral of the story: Next time, skip the platinum card. Your self-esteem doesn’t need the artificial boost.

Advertiser Disclosure: Many of the credit card offers that appear on this site are from credit card companies from which ThePennyHoarder.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). We do not feature all available credit card offers or all credit card issuers.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He does not have a gold or platinum card. Not even a copper or tin one.