Here’s an Easy Way to Earn Hundreds of Dollars in Passive Income as a Freelancer

Why I’m Not Opening Any CDs in 2024 — Even Though Rates Are Up to 5.5%

By: Ben Gran |
Updated
Jan. 26, 2024 – First published on Jan. 26, 2024

Have you seen how high the APYs have gotten on certificates of deposit (CDs)? As of Jan. 21, 2024, some of the offers on our best CDs list were offering rates of up to 5.51% APY! With the Fed (possibly) getting ready to cut interest rates, now could be a good chance to lock in a high yield on a CD.But even though the APYs are tempting, I’m not convinced that opening a CD is the right move for my personal finances. And CDs might not be the right option for you, either.Here are a few reasons why I’m not opening any CDs in 2024.1. I don’t want to lock up my money in a CDWith my cash savings, I like to keep my options open. Putting money in a CD requires you to commit that cash for a certain length of time — a short CD term might only be three months, but you can’t take the money out. If you do need to pull money out of a CD before the term is up, you will owe an early withdrawal penalty.Instead of a CD, putting your cash savings in a bank or credit union savings account gives you flexibility for using that cash. What if you have an emergency expense? What if you need to replace your car, and you need cash for a down payment? What if you find a can’t-miss deal on an affordable winter vacation, or find some other investment that you want to make with that money? None of these financial moves are possible when your money is locked up in a CD.This lack of flexibility means that I don’t consider CDs to be the best place for your emergency fund. And if you’re saving for short-term or medium-term goals, like a down payment on a house, I don’t believe CDs are the best fit for that either — because the higher APY of a CD isn’t always worth the financial freedom and flexibility that you lose by locking up your money.2. The best high-yield savings accounts pay high APYs tooCDs aren’t the only game in town if you want to earn a better yield on your savings. The best high-yield savings accounts (as of Jan. 21, 2024) are also paying yields of 5% or higher — the best savings account on our list offers 5.32% APY!Is earning an extra 0.19% APY on your savings worth the inconvenience of a CD? Maybe if you have $250,000 to put into a CD, but even then, that difference in APY only amounts to an extra $475 in one year. I would rather have the flexibility of a savings account or money market account.With a high-yield savings account, you get:APYs almost as high as (and sometimes higher than) the best CDsThe freedom to withdraw your cash at any timeNo early withdrawal penaltiesIt’s true that if interest rates go down in 2024, savings account APYs will go down too. I could be missing out on a chance to lock in a higher APY on a longer-term CD. But I don’t try to time the market with stocks, or with savings account APYs. No one knows what the future holds, and no one knows what the Fed will do at their next meeting.Even if interest rates (and savings account APYs) go down by 1% by the end of 2024, that’s a risk I’m willing to take and a price I’m willing to pay. My savings account will be earning a pretty good interest rate during all that time, and I’ll have complete flexibility for how to use my cash.3. CDs aren’t a good long-term investmentSome CD investors like to get long-term CDs (like 3-year or 5-year CDs) so they can lock in a high APY for a longer duration of time. But these long-term CDs are also not a good fit for my personal finances. If I’m reluctant to lock up cash for 12 months or six months, why would I want to lock up that cash for several years?I’m still at an age and stage of life where I basically think about investing in terms of two buckets: I like to have one bucket of short-term cash, with plenty of emergency savings and money for short-term goals like vacations and home repairs. And then everything else that’s not short-term cash goes in the bucket of long-term investments.Based on my age, investment time horizon, and risk tolerance, most of my long-term investments are in stocks. So the idea of buying a 5-year CD doesn’t make sense to me. If I’m investing for five years from now, I’m going to buy stocks. If I need cash for something that’s shorter term, I want the flexibility of a highly liquid, immediately accessible savings account.Your life stage, risk tolerance, time horizon, and overall personal finances and investment goals might be totally different from mine, and that’s totally OK! If you’re a retiree who needs fixed income, maybe buying CDs should be part of your strategy. But if you’re still trying to grow your wealth with long-term investments, buying stocks is likely to be a better strategy.Bottom line: I’m not opening a CD in 2024 because I value the flexibility of a savings account. I don’t want to commit my money to a CD that charges early withdrawal penalties, and the best high-yield savings accounts offer similarly high APYs. My philosophy on CDs is: don’t lock up your emergency savings in a CD, and don’t use CDs as long-term investments. Flexible access to cash in the bank can provide priceless peace of mind.

These 5 Cars Have the Worst Resale Value

By: Chris Neiger |
Updated
Jan. 22, 2024 – First published on Jan. 22, 2024

Buying a car is more expensive than ever, considering that the average price of a new vehicle is now $48,759. Other car-related expenses have spiked as well, including repairs and insurance. Many buyers may not consider resale value when they buy a vehicle, but now could be an important time to consider it because some owners are underwater on their car loans.This makes it all the more important for buyers to avoid vehicles that have low resale value. Here are a few that lost their value the quickest, according to data from iSeeCars. 1. Maserati Quattroporte Five-year depreciation: 64.5%Maserati’s flagship sedan offers buyers unique styling from the Italian carmaker, bringing together exotic luxury with sports car-like driving. But you’ll pay dearly for that combination. Not only is the starting price of the Quattroporte an eye-watering $139,000, but iSeeCars research shows that its value plummets 65% in the first five years of ownership. Ouch. Maserati also introduced an electric vehicle version for the 2025 model year, which could be a double whammy for owners worried about their car’s value. EVs typically have lower resale values and higher auto insurance costs. 2. BMW 7 SeriesFive-year depreciation: 61.8%BMW’s 7 Series sedan has long been an icon of luxury and sophistication. If you want to drive a top-of-line luxury sedan or, better yet, be driven around in one, the 7 Series is the way to go. When I was in high school, one of my friend’s dad bought a used one, and now I know why. Most luxury vehicles depreciate quickly, but the 7 Series nearly sets the standard. Within just five years, a 7 Series loses an average of nearly 62% of its value — or the equivalent of $72,444 below its original price tag.      3. Cadillac Escalade ESVFive-year depreciation: 58.5%I’m skipping a couple of vehicles at the top of the iSeeCars list since they’re repeat brands. Instead, let’s move on to America’s luxury brand, Cadillac. The Escalade is a popular large SUV that has become such a mark of status that it regularly makes its way into pop culture — being mentioned at least eight times in hip-hop songs, according to Car and Driver. Unfortunately, the Escalade reaches near the top of another chart as well. GM’s SUV loses an average of 58.5% of its value just five years after you drive it off the dealer’s lot. 4. Infiniti QX80 Five-year depreciation: 58.5%A powerful 400-horsepower V-8 comes standard with the QX80, giving buyers plenty of get-up-and-go when they need it. But while you won’t be short of power with the QX80, you might get the short end of the stick when you trade it in. Infinit’s QX80 is one the least expensive full-size luxury SUVs on the market, but you’ll still lose a staggering $47,399 in value in five years of purchase, according to iSeeCars.5. Jaguar XFFive-year depreciation: 57.6% At a starting price under $50,000, the Jaguar XF is the cheapest vehicle on this list, but don’t mistake it for a good value.Not only is the XF’s styling feeling a little long in the tooth — this version debuted back in 2016 — but the sedan’s value tumbled quickly after its purchase. iSeeCars says the XF value drops 57.6% five years after its purchase, leaving you with an outdated model that’s not worth much.  You can’t control depreciation, but you can control this While you can’t do much about your vehicle losing value, you can control how much it costs you in other ways. For example, car insurance prices have risen rapidly over the past few years, weighing on many people’s finances.Many people stick with their current insurance company to avoid the potential hassle of changing policies. But it’s possible to save significant money on car insurance by doing a little online comparison shopping. Taking a few minutes to compare quotes between car insurance companies could save you money on your monthly premiums, regardless of your car’s value. 

My Brother Won a Car on The Price Is Right. Here’s What It Cost Him

By: Maurie Backman |
Updated
Dec. 7, 2023 – First published on Dec. 6, 2023

When my brother got tickets to be in the audience of The Price Is Right, he figured it would simply be an entertaining way to spend a day off. He didn’t imagine his name would actually be called during the show’s opening round.But lo and behold, my brother was one of the first four contestants asked to come on down and participate in the iconic show that has you guessing at prices of various consumer goods. And as luck would have it, my brother was able to out-bid his competitors and move on for a chance at a new car — a car he won through savvy guessing, but also, a nice amount of luck.My brother was ecstatic to have won such an awesome and valuable prize. But that prize wound up being a bit of a mixed bag.Taking the money and runningMy brother won a Hyundai Elantra with an estimated value of $25,415. He was happy to have won the car, but there was a problem — he already had a vehicle and didn’t need a second one. And he certainly didn’t want to have to bear the cost of auto insurance for a vehicle to largely just sit in his driveway.Thankfully, my brother was able to work something out with the dealership. Instead of keeping the Elantra, he was able to use the roughly $25,000 credit he got to buy a used car from them and then sell it back for $21,000, which he took as cash. This route was worth it for him because sales tax and registration for a new Elantra would’ve been about $4,000. And now, my brother has a pile of cash he can add to his savings account instead of a car he doesn’t actually need.Gearing up for a giant tax billMy brother won two prizes on The Price Is Right — a grill package worth about $1,400 and the Hyundai Elantra. All told, it’s more than $26,000 in winnings.But now, my brother is going to be looking at a pretty hefty tax bill on his prizes. And it doesn’t matter that he took cash for the car. He’s looking at paying that tax either way.The exact amount will hinge on his total tax situation. What’ll probably happen is that my brother will receive a tax form from the game show summarizing the value of his winnings, and he’ll need to work with his accountant to figure out what it will cost him.As a very basic example, let’s say you win $20,000 on a game show and fall into the 24% tax bracket based on your income. You might, in that case, end up having to pay as much as $4,800 on your winnings. If that $20,000 is a cash prize, you could simply reserve some of it for your tax bill. But what if you win a $20,000 vacation package, or $20,000 in furniture? It’s not like you can send the IRS a dining room chair or a loveseat and call things even.So be very careful when you’re looking at taking home any sort of game show prize. You may even want to meet with an accountant before applying to be on a game show to get some advice.The good news is that my brother stands to gain something financially either way. But imagine you were to receive a $26,000 bonus from work. That’s a great thing. But you’ll likely end up losing a large chunk of that $26,000 when you account for the portion you owe the IRS.All told, my brother is grateful for his experience and now has a really fun story to tell. But if you’re planning to audition for a game show in the hopes of walking away with a huge amount of cash or a set of prizes, do know that winnings like that are considered taxable income. And it might take the input of a very seasoned accountant to help you reconcile your tax bill after coming away with that sort of haul.

3 Reasons Not to Shop at Aldi Despite the Low Prices

By: Maurie Backman |
Updated
Jan. 11, 2024 – First published on Jan. 8, 2024

At the start of 2023, one of the financial resolutions I made was to spend less money on groceries. As someone who was already in the habit of buying staples in bulk (thanks, Costco), that was a pretty challenging thing. But then a friend of mine introduced me to Aldi, and suddenly, I found myself in a position of being able to save money on food at a time when grocery prices were still pretty high across the board (kudos, inflation).I did a fair amount of shopping at Aldi during the first half of 2023. But I’ll admit that as the year wore on, I found myself visiting the store less frequently.It’s true that shopping at Aldi has the potential to result in a fair amount of savings. But here’s why you may not want to shop there despite the low prices.1. You have picky eaters at homeSome people have pickier children than others. But my kids are pretty choosy about the food they’re willing to eat. So when I brought home cheap granola bars from Aldi at one point last year, my kids downright refused to touch them because they weren’t familiar with the brand. As such, instead of saving a few dollars on granola bars, I wasted a few dollars.Aldi says itself that more than 90% of its products are exclusive brands, which means they’re not the brands you see advertised all over the place. If you’re not picky about brands, then by all means, stock up at Aldi. But if you have a household of picky eaters, you might unfortunately end up throwing your money away to some degree.2. You have limited time to shop for groceriesAnother hiccup I ran into last year during my Aldi shopping was not being able to find staple items consistently. Some weeks, for example, there would be no white bread. Other weeks, the store was out of cucumbers or strawberries.If you have a busy schedule and limited time to shop, you may find Aldi to be a frustrating experience. You might have to make multiple trips in the same week to get everything you need. And if that’s something you just don’t have time for, then it could pay to do your grocery shopping elsewhere.3. Your closest Aldi is far awayI happen to have an Aldi within 15 minutes of where I live. And as a bonus, it’s right near Costco. So I don’t have to spend extra on gas to get there if I want to pop in, since I typically go to Costco once a week.But if the nearest Aldi to your home is a 30-minute drive or more, you may want to do your shopping at a store that’s closer. Driving that long on a regular basis may not be feasible. What you save on groceries, you might end up spending on gas.There are personal finance benefits to shopping at Aldi, and I haven’t given up on the store completely. I’ll still stop in on occasion if I’m doing a Costco run to see what produce is in stock, because believe it or not, in my experience, Aldi’s prices are often more competitive than Costco’s in that category. But if the above factors apply to you, you may not want to make Aldi your go-to store anytime soon.

5 Reasons Costco Could Terminate a Membership

By: Lyle Daly |
Updated
Jan. 11, 2024 – First published on Jan. 11, 2024

If you like Costco, the last thing you’d want is to lose your membership. While this is uncommon, there are ways that shoppers get their memberships revoked.Like many membership clubs, Costco reserves the right to terminate memberships at any time, including without cause. Now, it’s not something you need to worry about too much. Costco is known for having excellent customer service, and it’s not going to blacklist a member for no reason.But to make sure you don’t run into any issues, it helps to know why Costco would terminate a membership. Based on online reports from Costco employees, here are the most common reasons.1. Ignoring the receipt checkerNot everybody likes it, but the receipt check is part of shopping at Costco. There are a few reasons Costco checks your receipt when you leave, including to verify that you weren’t undercharged or overcharged.Some members who bypassed the receipt checkers have had their memberships revoked. Even if you’re in a hurry, the receipt check doesn’t take long, and it’s one of the terms of membership.2. Being rude or abusive to employeesAs one would expect and hope, any type of hostility toward employees could lead to a loss of membership. That includes insulting, cursing out, and physically attacking employees. And according to reports by employees, those types of incidents have sadly all happened at Costco warehouses before.3. Theft or fraudHere’s another one that doesn’t need much explanation. If a Costco member is caught shoplifting or committing any type of fraud there, they’ll likely have their membership canceled. Most retailers have loss prevention and fraud detection systems in place to catch criminals. Costco also has an advantage in tracking down thieves, since it can look up their membership information.4. Abusing the return policyCostco is known for having an extremely flexible and generous return policy. It offers a risk-free 100% satisfaction guarantee. That means you can return most items at any time, no matter how long has passed since you made the purchase, and get a refund to your credit card or bank account. There are some exceptions, most notably electronics, which have a 90-day return period.It’s fine to make the occasional return, including on items you’ve had for a long time. But shoppers who take it to an extreme may lose their memberships. Here are a few examples of what a Costco manager could frown on:Shoppers who make a habit of buying, using, and returning the same products. One employee mentioned a member who was banned after returning eight TVs in a row, each of them right before the end of the 90-day return window.Shoppers who buy seasonal or holiday products and return them when they’re no longer needed. Some treat Costco as the place to get free rentals of holiday decorations or summer patio furniture.Shoppers who return partially used items. Some customers have returned a small remainder of food and beverage products.Costco almost always gives a warning to those it suspects of abusing its return policy. If the member continues making those types of returns, they may not be a member much longer.5. The revolving door membershipWondering what a revolving door membership is? Well, Costco’s satisfaction guarantee also applies to memberships. If you’re not satisfied, it will cancel and refund your membership at any time.A select few have seen this as a personal finance hack to get an infinite Costco membership for the price of a single year. Here’s what they do:Sign up for Costco and pay the $60 membership fee.Cancel within 12 months and get a fee refund.Use the money from the refund to buy a new membership.It’s OK to cancel a Costco membership and decide to come back later. But if a shopper seems to keep getting dissatisfied after 10 or 11 months of using their Costco membership, a manager could add a note to not let them sign up anymore.It’s easy to keep your Costco membershipAll the reasons that Costco would terminate a membership are blatant examples of bad (and sometimes illegal) behavior. If you’re a normal Costco shopper, you’ll be able to go there as long as you pay your membership fee every year.

https://www.fool.com/the-ascent/personal-finance/articles/heres-an-easy-way-to-earn-hundreds-of-dollars-in-passive-income-as-a-freelancer/

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