Mentor

Author: it-teaam

  • What Is a Credit Score?

    What Is a Credit Score?

    If you want to know “what is a credit score?,” then let’s start with the basics. There are three major credit bureaus that issue credit reports, which are used to rate your creditworthiness. The three credit bureaus are Experian, Equifax and TransUnion. These credit bureaus will calculate a three-digit credit score for you based on your credit worthiness. Your credit score is used by lenders and financial institutions when they decide to lend you money or issue you a credit card.

    The most common credit score is called the FICO credit score, which ranges from 300-850. Therefore, the lowest credit score is 350. When people ask that is the best credit score, the answer is 850.

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    In this guide, you will learn everything you need to know about your credit score, including:

    How to calculate your credit score

    Your FICO credit score is based on the following components:

    1. Payment history = 35%
    2. Credit utilization = 30%
    3. Account age = 15%
    4. Inquiries = 10%
    5. Credit Mix = 10%

    What is the best credit score? How can I get the highest credit score?

    When people ask what is an excellent credit score, there is no exact number. That said, if you have a credit score of 750 or higher, then you have an excellent credit score. If your credit score is 800 or higher, you have a super star level credit score.

    Here is a helpful chart to better understand credit score and what is an excellent credit score under FICO:If you want to know how to get the highest credit score, start by understanding what each component of your FICO credit score means. Once you check your credit score and understand the credit score breakdown, you can work toward building an excellent credit score.

    These are the components of your FICO credit score:

    Payment history
    Payment history shows all your previous payments and whether you have paid on-time. The best way to build an excellent credit score is to make on-time payments and avoid late payments.

    Credit utilization
    Debt utilization is the amount of debt outstanding as a percentage of your credit limit. For example, if you have a $10,000 credit limit and a $3,000 outstanding credit card balance, then your debt utilization is 30%. If you want to know how to increase your credit score, you should maintain a credit utilization below 30%. If you are building your credit score for the first time and are using a secured credit card, try to keep your debt utilization 10% or less.

    Account age
    Account age is the average age of all your credit accounts. The best way to build an excellent credit score is to have multiple credit accounts that are outstanding for a long period of time.

    Credit inquiries

    Credit inquiries occur whenever you apply for new credit, including a mortgage, student loan, credit card or personal loan. Soft credit inquiries do not impact your credit score, whereas hard credit inquiries do impact your credit score. Therefore, you should try to limit the amount of hard inquiries within a short period of time if you want to have the highest credit score. The good news is that you can often apply to multiple lenders within a short period of time for the same product such as to refinance student loans, for example, and it will only count as one hard credit inquiry.

    Credit mix
    Credit mix represent the different types of credit that you have, including student loans, credit cards, mortgages and auto loans.

    Why is it important to increase your credit score?

    Your credit score, in many respects, is the key to your financial future. If you want a credit card, personal loan, auto loan, student loan refinance or many other financial products, you need to know how to increase your credit score. You should check your credit score at least annually, and check your credit score before applying for credit. When you check your credit score, look for errors or discrepancies. Contact all three credit bureaus to correct any errors.

    Today, even landlords and employers will check your credit score to ensure that you are financially responsible. You won’t need the highest credit score to get a job or to rent an apartment. However, having an excellent credit score will convey to employers and landlords that you are trustworthy and financially secure.

    What is the best way to increase your credit score?

    If you want to work your way toward the highest credit score, here is some helpful advice to increase your credit score:

    1. Don’t pay interest. Pay your bills on-time 100% of the time.

    2. Don’t miss payments. Don’t skip any payments, since missed payments can hurt your credit score.

    3. Avoid opening too many accounts. While having a diverse credit might seem like the best way to build credit, don’t open too many credit accounts at once. Too many new accounts can lower your average account age.

    4. Increase your account age. Want to know how to increase your credit score? Keep your credit accounts open and active for as long as possible, since average account age is one component of your credit score.

    5. Check your credit score. If you want to know to improve your credit score, check your credit score at least annually to ensure there are no errors or discrepancies. If your find any errors when you check your credit score, contact all three credit bureaus to have the errors corrected.

    How long does it take to improve my credit score?

    It’s never too early to improve your credit score, particularly if you want to learn how to build credit fast. The best way to raise your credit score is to develop a track record of financial responsibility. By borrowing credit and making monthly payments in full and on time, you can convey to lenders and financial institutions that you are a responsible borrower.

    If you want to know how to build credit fast, you can typically build your credit in 1-2 years if you want to have an average or good credit score.

    To build an excellent credit score, it could take many years (e.g., 7+ years) to increase your credit score.

    Follow these tips if you want to know how to improve your credit score:

    • Longer Account Age. The longer your accounts are open and active, the longer your average account age, which help boost your credit score.
    • Reduce Credit Utilization. Focus on reducing your credit utilization, which you can do by spending less or getting more credit.
    • Consolidate Credit Card Debt. If you have credit card debt, consolidate credit cards into a personal loan to cut your interest payments
    • Pay On Time. Always make monthly payment in full and on-time, and you will develop a longer, positive payment history
    • Don’t Miss Payments. Never miss a payment
    • Build Credit Early. Start building a credit history as early as possible, even if you are in school. Student cards a great option for students to start building credit.

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  • Checking Accounts 101

    Checking Accounts 101

    What is a checking account?

    An online checking account is a bank account where you can write checks, pay bills and earn interest. Many of the best checking accounts deals are online, no monthly fee checking accounts. Assuming that your bank is federally-insured through the FDIC (Federal Deposit Insurance Corporation), your no fee checking account also will be FDIC-insured up to $250,000.

    The best free checking account often is an online, high yield and no monthly fee checking account. A high yield checking account enables you to earn interest on your checking account balance at a higher rate than a typical checking account. A no monthly fee checking account also means more money in your pocket, since you would have to pay a monthly fee. Some banks may ask you to maintain a minimum monthly balance, while other banks will not.

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    Why do you need a checking account?

    You need an online checking account for several reasons:

    1. Write checks. The best free checking accounts can help you write checks and pay bills, and use free online bill pay.
    2. Earn high yield interest. The best checking account helps you earn interest income that can be significantly higher than the national average for a traditional checking account. Most high yield, online checking accounts offer an annual percentage yield (APY) that is higher than 1%.
    3. Ease of use. An online checking account is mobile friendly and can help you manage your account and transfer money with ease.
    4. No fee checking account. Traditional checking accounts may include a minimum balance or monthly checking fee. You should look for checking account deals that offer a no monthly fee checking account.
    5. Limit on transfers. Under federal law, you can withdraw or transfer funds no more than six times per month from a checking account.

    What is the difference between online, no feechecking accounts and traditional checking accounts?

    When people ask “what’s a checking account,” they also like to understand the difference between traditional checking accounts and online, no fee checking accounts.

    Here are the primary differences:

    Traditional Checking Accounts: A traditional checking account is a default checking account offered by a brick-and-mortar bank. Traditional checking accounts may have a monthly fee and may require a minimum balance. The biggest downside of a traditional checking account is the annual percentage yield. Compared to CDs and investing accounts, the yield on traditional checking accounts are very low.

    Online,No Fee Checking Account: An online, no monthly fee checking account is almost exclusively online, offers a much higher yield and has no monthly fee. The best free checking accounts can offer higher annual percentage yield (APY) because the bank saves costs by not having additional or any physical branches to support online checking accounts. Most online, no fee checking accounts have excellent customer service, so you still have access by phone, email or chat to speak with customer service. An online no fee checking account is a great option if you are comfortable with mobile and online banking. With the best free checking accounts, the good news is that you can earn a higher yield and typically do not need to maintain any minimum balance. Some online checking accounts may also pay you a higher yield if you have a higher balance. This is known as a tiered rate checking account.

    How do you find the best free checking accounts?

    You can find the best free checking accounts here on Mentor. Mentor’s list of the best free checking accounts includes banks that we believe offer the best no fee checking accounts rates, best customer service, checking account management tools and lowest fees.

    You can compare these online checking accounts on Mentor, and choose the best checking account for you.

    Then you can open a no monthly fee checking account directly through Mentor with one of our partners. It’s easy to apply for checking accounts. All you will need to provide is basic information such as you name, Social Security Number, driver’s license and other contact information.

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  • How to Save Money on Cell Phone

    How to Save Money on Cell Phone

    How can I lower my cell phone bill? It’s one of the number one financial questions about saving money, and the answer is easier than you think.

    Everyone wants to know how to lower your cell phone bill, and here’s how.

    Here are 6 ways to reduce your cell phone bill:

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    1. Lower your cell phone bill by changing your cell phone plan

    It’s easy to sign up for cheap phone plans, and then never review the fine print. With taxes and fees, those cheap cell phone plans can become more expensive. So, it’s time to review your usage so you can lower your cell your phone plan.

    Your cell phone plan is driven by the number of lines and your data usage. To lower your cell phone bill, analyze your data usage for the past 3-6 months. Are you using all your data? If you can find ways to lower your data plan, you can lower your cell phone plan.

    Also, assess whether you have exceeded your data usage and are paying monthly overages. Alternatively, you can choose an unlimited data plan so you are not paying overage fees on a per gigabyte basis.Finally, cell phone plans change. To reduce your cell phone plan today, you can’t rely on the cell phone plan you signed up for three years ago. Your usage changes – and do cell phone plans. So, update your cell phone plan to your current needs to lower your cell phone bill.

    2. Change your billing address to lower your cell phone bill

    Another strategy to reduce your cell phone bill is to change your billing address. It sound so simple, but it is one of the most overlooked ways to lower your cell phone bill.

    The taxes and fees, including regulatory costs, that are you are charged are based on where you live. It is easy to update your address to lower your cell phone bill. Simply log into your cell phone account, and change your billing address in your user profile.

    3. Increase the number of lines to reduce your cell phone bill

    When you add more lines, the absolute monthly cost will increase, but you will save money on a per line basis. The key with sharing lines is that you share data. Therefore, you pay more per line, but you really lower your cell phone bill by sharing data across cell phone lines.

    4. Avoid international calling plans

    Even with cheap phone plans for calling internationally, you are probably overpaying. An easy way to lower your cell phone bill is to use mobile apps such as WhatsApp that allow you to chat and speak for free all over the world. There are many apps that allow you to do chat and speak globally for free. You can also see if Skype will help you lower your cell phone bill if Skype’s calling rates are lower than your cell phone company’s rates.

    5. Review your insurance plan to lower your cell phone plan

    If you think you already have one of the cheap cell phone plans, make sure you review your insurance plan. Insurance can help you save money if you lose or damage your cell phone. So for a small fee per month, insurance can save you hundreds of dollars if you lose or damage your phone.

    The key to insurance, however, is not to over-insure your cell phone. You can reduce your cell phone bill by avoiding premium insurance plans and warranties that may already be covered in the basic insurance plan. You should also analyze whether premium insurance offerings are worth the annual cost to maintain, even if you do lose your phone because it can really hurt your cell phone bill.

    6. Go paperless and sign up for autopay to reduce your cell phone bill

    If you want to lower your cell phone bill, go paperless and sign up for autopay. Many cell phone companies will reduce your cell phone bill when you enroll in autopay and/or sign up for paperless billing. Plus, with paperless, you will help save the environment.

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  • How to Save Money on Electric

    How to Save Money on Electric

    How to save money on electricity is one of the top financial questions asked by homeowners and renters each year. If you live in a cold weather state in the winter time, or a hot state in the summertime, how to save on your electric bill is a top priority.

    The good news is that there are many ways to save on the electric bill, and they are easier than you think.

    Here are 6 ways to save on your electric bill:

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    1. Get an energy audit

    While the term audit might not be appealing, it’s one of the best ways how to save money on electricity. Your state utility company may offer a free home energy audit. During the audit, you will learn ways to better insulate home and how to lower your electric bill. You will also learn about the simple home improvements you can make for how to save on your electric bill.

    2. Install ceiling fans

    Everyone loves air conditioning, but it can come at a steep cost. One of the best ways to save on the electric bill is to install ceiling fans. Compared to air conditioning, they are relatively affordable and can lower your electric bill. When it’s winter time, your fan should spin clockwise to help keep the heat inside. When it’s summer time, your fan should spin counter-clockwise to help heat rise and go outside.

    3. Do laundry at night

    If you want to know how to lower your electric bill, consider doing laundry at night. When you do laundry after 8 p.m., for example, your energy costs likely will be cheaper. Many utility companies offer lower electricity rates if you use appliances during non-peak hours. You can apply the same strategy with dishwashers as well.

    4. Wash your clothes in cold water to lower your electric bill

    Up to 90% of your heating costs from washing your clothes in a washing machine involves heating the water. Therefore, if you want to know how to save money on electricity, wash your clothes in cold water. When it comes to drying clothes, there is no big way to save money on dryer costs. Your best bet to save money on your electric bill is to air dry your clothes, which may not be ideal.

    5. Keep your vents open to save on the electric bill

    It may sound obvious, but make sure all your air conditioning vents are kept open. Having a thorough energy audit should help you discover any gaps in air conditioning or heating. Other ways to save money on an electric bill involve cleaning and replacing air filters. To provide for optimal airflow, you will want to replace your air filters each month. They only cost a few dollars, and replacing them will help your air filters block dust and dirt from flowing in your home.

    6. Use power strips to save money on electricity

    Did you know that a substantial amount of your energy costs – up to 75% — can be attributed to appliances when they are not being used? That means your television, computer, DVR, DVD player, gaming systems and more are using electricity all the time. Want to know how to save money on your electric bill? Plug all your electronics in a power strip and turn off the power strip when you are not using these electronics.

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  • How to Save Money on Travel

    How to Save Money on Travel

    If you want to know the best way to save on travel, it’s relatively simple to do. In this guide, we will show you:

    • Ways to save money on vacation
    • How to save money on hotels
    • The best way to save money on flights

    These money-saving tips will help you save money on travel and have an awesome vacation all at the same time:

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    Ways To Save Money On Vacation

    Everyone wants to save on travel. With these helpful tips, you’ll learn the best ways to save money on vacations.

    1. Compare rates

    Compare the best flights and hotels on sites such as Expedia and TripAdvisor. They will help you compare different travel options, and find the best airline and best hotels that fit your preferences. Sites such as Expedia and TripAdvisor help you compare the lowest rates and are supported by reviews.

    2. Use rewards credit cards

    If you have a rewards credit card, you can use your travel rewards for free flights and hotel stays. A travel rewards credit card is a smart idea for travelers who want to earn rewards for their everyday spending. You can compare the best rewards cards and best travel cards directly on Mentor.

    3. Convert currency at home

    If you are traveling internationally, one of the best ways to save money on vacation is to change currency before your depart. Why? The currency conversion rate is often cheaper in the U.S. than it is at the airport or in your destination country.

    4. Avoid impulse purchases

    Sure, you may want to take home a few souvenirs, but don’t bring back a whole suitcase full of souvenirs. You may end up paying duty for it when you return to the U.S. (unless it’s duty-free), and you also may overpay if you’re shopping in tourist areas.

    5. Rent your home while you are on vacation

    With services such as AirBnB and HomeAway, you can even make money while you travel by renting your home. The money you earn can be used to help you save on travel, and is one of the best ways to save money on vacation.

    How To Save Money On Hotels

    When it comes to your vacation, how to save money on hotels is often top of the list. If you’re on a week-long vacation or longer, your hotel costs are more expensive than your flight.Here’s how to save money on hotels for your next trip:

    1. Compare hotel costs online

    Expedia and TripAdvisor are two reliable sites to compare hotel costs. You will see how to save money on hotels through comparison shopping. You can also evaluate reviews, ratings and proximity to the city center.

    2. Use hotel rewards cards

    The best hotel rewards cards can help you earn free hotel stays, hotel upgrades, free nights and even special club floor access. With hotel travel cards, you can earn points for every dollar you spend that you can redeem for travel rewards.

    3. Find promotions and discounts

    To save on travel, always check the hotel website for discounts, deals and promotions. The good news is that you can often find discounts for multi-night stays or if you travel during the off-peak season. Sometimes, hotels will honor the discount even if you book on a third party website. However, you should contact the hotel first to ensure you can get the promotion even if you book through a third party.

    4. Use AirBnb and HomeAway

    To save on travel, we already discussed the possibility of renting your home. However, you can also rent a home, apartment or villa on AirBnb or HomeAway on your vacation. As an alternative to a hotel, you may find a lower or comparable cost dwelling with more space. AirBnb and HomeAway work especially well with larger groups if you are traveling with friends and family.

    5. Eat outside the hotel

    If you want to save money on travel, the hotel restaurant may not be your best bet. One of the best ways to save money on vacation is to save money on meals. You don’t have to eat all three meals at the hotel restaurant. It’s often more cost effective to eat off-premises, and grab breakfast at a local coffee shop. Plus, you can save additional money on food by buying snacks at a local grocery store, which you can enjoy while you are sightseeing.

    How To Save Money On Hotels

    When it comes to your vacation, how to save money on flights is another essential goal. Along with your hotel costs, how to save money on flights should be your next focus.

    Here’s how to save money on flights for your next trip:

    1. Compare flights online and look for layovers

    Use Expedia and TripAdvisor to compare flight options. Obviously, flying non-stop is the fastest way to travel. If you have flexibility, you may be able to find cheaper flights with one or more layovers. When traveling internationally, in particular, a long enough layover in a city can mean a free trip to that city (even if for a few hours). If you’re lucky enough to snag a 24-hour layover, congratulations – you just earned a free trip to your layover city.

    2. Have flexible travel dates

    When it comes to the best way to save money on flights, your best move is to be flexible on travel dates. It’s often easier to fly on a weekend, but the lowest fares are during the week. The best days to fly to save on travel are a Tuesday or Wednesday. You can also save money on flights if you take a redeye and fly overnight (rather than fly during the day). This is called an “extended stayover.”

    3. Look for two, one-way flights rather than a roundtrip flight

    The best way to save money on flights can be to book two, one-way flights, rather than a round-trip fare. It doesn’t work on every route, but many flights (particularly international ones) can be hacked this way if you find the right city to city combination. Another strategy is to drive to a nearby airport in another state to take the second one-way flight to save money on travel.

    4. Fly during off peak times

    To save on travel, try to avoid the usual winter and spring break that everyone else does. Airlines tend to give discounts after the major holidays. For example, you can save on travel by flying after Spring Break in April or after New Year’s in early January. If you have the flexibility, the best ways to save money on travel flights is to target these off-peak times. Of course, these dates may vary in different parts of the world, so keep an eye on prices for international travel.

    5. Consider premium coach seats

    Have a long distance flight and don’t feel like sitting in the last row of coach in that middle seat? We have all been there before. The best ways to save money on travel can be saved on your flight. Business class or first class may be a stretch, so a premium seat in coach near the first row may be worth the additional fee. Of course, the quality of the seat may vary for each airline, so do your research in advance. If you have a connection, a premium seat at the front of the plane can save you time when deplaning. A premium seat may also come with extra legroom.

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  • How to Save Money

    How to Save Money

    If you’re wondering how to save money, then this complete guide will teach you simple strategies to increase your bank account. The best strategy is to start thinking about saving each day, month and for the long-term.

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    What is the best way to save money each day?

    When it comes to saving money, the first place to start is to look at your daily spending.

    Your daily spending includes everything from eating out and entertainment to transportation and groceries.

    Here are 5 easy ways to save money each day:

    1. Keep your pocket change

    If you spend money with cash, your pocket change can add up. If you want to know how to save money fast, keep that extra change each day in a safe place. Deposit it in your bank account. Banks such as TD Bank have free change counters, and make it easy to deposit your loose change in your bank account.

    2. Don’t automate online purchases

    It’s convenient to shop online. With a click of a button, you’ve ordered a new wardrobe. The best way to save with online purchases is not to store your credit card and billing information with the online retailer. Is it inconvenient? Yes. Will it save you money? Yes, because it is a natural deterrent when you have to enter your payment and contact information each time.

    3. Save money with an automated savings plan

    One of the best ways to save money is to automate savings. When you automate savings, you use an online tool or app to move money from your checking account to savings account automatically. Apps such as Digit or Qapital are two examples of apps that automate savings, and transfer funds from your checking account to savings account to save. Acorns transfers funds with your remaining change each time you make a transactions.

    4. Limit how many times you eat out

    Everyone loves to dine at a restaurant, but the costs can add up. Another great way how to save is to eat out only on weekends. You can also skip an appetizer or those extra cocktails. If you want to save money fast, then consider ordering a salad or even an appetizer as your main dish. You can also save your money (and calories) if you skip dessert.

    5. Avoid impulse buying

    Are you someone who buys on impulse? Stop. Think through your big ticket purchases. Wait for holiday sales before you make major purchases. When you buy items on impulse, you may regret the purchase later. So, think before your spend.

    What is the best way to save money each month?

    When it comes to how to save money each month, you should focus on recurring payments. These are the payments that show up every month such as housing, cable, student loans, credit cards and more.

    Here are 5 easy ways to save money on a monthly basis:

    1. Change your cell phone plan

    One of the best way to save money each month is to evaluate your cell phone plan. Do you need all those minutes? Do you need all that data? Perhaps a family plan makes sense. With taxes and fees, cell phone plans can add up. Shop around with different carriers to find the cell phone plan that makes sense for you.

    2. Change your cable plan

    To save on travel, always check the hotel website for discounts, deals and promotions. The good news is that you can often find discounts for multi-night stays or if you travel during the off-peak season. Sometimes, hotels will honor the discount even if you book on a third party website. However, you should contact the hotel first to ensure you can get the promotion even if you book through a third party.

    3. Save on your electric bill

    How to save money with your electric bill is a popular question with an easy answer. In the summer, a fan can save money compared to an air conditioner. Also, if you keep the drapes closed during the day, it can keep your home cool and save on air conditioning costs. In the winter, the best way to save money is to ensure you have energy efficient doors, windows and appliances.

    4. Consolidate credit card debt

    The best way to save money on credit card debt is to pay off your credit card bill each month. With credit card debt, the interest is the most expensive part and can add fast. If you have existing credit card debt, the best way to save money is to consolidate credit card debt with a credit card consolidation loan. When you consolidate credit card debt, you combine all your existing credit card debt into a new, single credit card consolidation loan with a lower interest rate. The lower interest rate helps you save money and pay off your credit card debt faster. Here are our best credit card consolidation loans.

    5. Refinance student loans

    The best way to save money with your student loans is to refinance student loans. Student loan refinance can help you save up to $20,000+ over the life of your student loans. With student loan refinance, you combine your existing federal and private student loans into a new, single student loan with a lower interest rate. You can choose between a fixed and variable interest rate, and a loan term between 5 and 20 years. You can learn more about our Best Student Loan Refinance Rates.

    How to save money for the long-term?

    When it comes to how to save money for the long-term, think about the financial mentality you need to make a mind shifting in spending and saving.

    Here are 5 easy ways to save money on a long-term basis:

    1. Develop a spendthrift mindset

    If you want to know how to save money, you need to develop the right financial mindset. That starts with how you approach money, spending and saving. Do you bargain shop? Do you comparison shop? Do you only buy everything new? Do you buy discounted items? Your mentality drives your spending and saving habits. When you focus more on the bottom line, you will be on your way to save money for the long-term.

    2. Create an action plan

    Whether it is a budget or a long-term action plan, think about the areas where you can save money. Some ways to save may include where you live, the size of your house, what kind of car you drive, whether your car is new or used, where you vacation and many others. Think about your choices, preferences and actions. Identify a budget and action plan how you are going to manage these preferences and choices with the amount of money you have. Refine estimates with real-life costs, and modify your action plan over time to fit your lifestyle and realistic budget.

    3. Create a savings plan

    You need a mechanism of forced savings. A high yield savings account is a great place to start. You can also choose one of the Best IRAs or Best Roth IRAs to ensure you have a stable retirement account. Choose investment options that will help you retirement grow and match your retirement goals.

    4. Set goals

    Setting goals can actually teach you how to save money. Why? When we set goals, we create discipline and have a concrete thing to work towards. Whether it is a vacation or new home, we can quantify the cost and create a time line by when we need to save. The second component is how to save money. By making daily and monthly modifications in your financial life, you can save the money you need to reach your financial goal.

    5. Analyze your spending

    The best way to save is to analyze your actual spending. This is essential to track your monthly cash flow, and to determine whether your actual savings and spending matches your savings plan.

    When you reflect on your spending, you can evaluate your process determine where to make adjustments. Most importantly, ensure that your financial plan going forward focuses on both spending less and saving more.

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  • The Ultimate Roth IRA Guide

    The Ultimate Roth IRA Guide

    What is a Roth IRA?

    A Roth IRA is an individual retirement account that helps you save and investment for retirement. A Roth IRA is funded with after-tax dollars, which means that you have already paid taxes on the cash that you contribute. The good news is that the earnings from your Roth IRA investments grow tax free, even if you make a profit. You can use the cash that you contribute to your Roth IRA to invest in stocks, bonds, mutual funds, ETFs and other investments.

    When you retire, you can withdraw these funds tax-free to help fund your retirement.This means that you will never owe any capital gains taxes on your Roth IRA investments, nor will you dividends be taxed. A Roth IRA makes sense if you think your tax rate in the year of your Roth IRA contribution is lower than the tax rate in the year of your tax withdrawal.

    Where is the best place to open a Roth IRA?

    The decision where to open a Roth IRA is an easy one. Plus, the process of how to open a Roth IRA is simple. You can open a Roth IRA retirement account online in minutes. To open a Roth IRA that you plan to manage yourself, you can choose from the best online brokers to set up a Roth IRA. If you want your Roth IRA investment to be managed by someone, you can choose from the best robo-advisors to provide an automated portfolio service that uses computer algorithms to invest in low-cost investments.

    If you want to know how to open a Roth IRA, it is simple. Once you choose your Roth IRA brokerage, you will be asked to enter basic contact information, including your social security number.Then, you will fund your account through a wire transfer, check or bank transfer.

    How is a Roth IRA different than a Traditional IRA?

    There are several differences than a Traditional IRA.

    There are two main types of IRAs: a Traditional IRA and a Roth IRA. The main difference between a Traditional IRA and Roth IRA are the tax benefits.

    • Traditional IRA: A Traditional IRA is the most popular form of IRA. When people ask “what is an IRA account,” this is the IRA retirement account of which they think. With a Traditional IRA, you contribute money each year that is tax deductible in your year of contribution. A Traditional IRA investment can grow tax deferred, meaning you do not pay taxes when you sell your Traditional IRA investment for a profit. Rather, you pay taxes in retirement when you withdraw those funds. Therefore, a Traditional IRA makes most sense if you believe your tax rate is higher in the year you contribute to your Traditional IRA than it will be in retirement when you withdraw those funds.
    • Roth IRA: With a Roth IRA, you contribute funds on an after-tax basis. This means that you do not receive a tax deduction in the year of your contribution. The benefit of a Roth IRA is that you do not pay any taxes when you withdraw your retirement funds, and you can enjoy the profits of your IRA investment tax-free. A Roth IRA makes sense if you have a lower tax rate now than you will in the future. Roth IRA retirement accounts are not available to everyone, and are limited by your annual income.

    What are the advantages of a Roth IRA?

    When it comes to understanding what is a Roth IRA, it is helpful to understand all the benefits of a Roth IRA. Here are some of the top benefits of a Roth IRA:

    • Save For Retirement: Ability to save for retirement and supplement retirement income
    • Tax Benefits: Ability to take advantage of tax benefits, including tax-free growth
    • No Mandatory Withdrawals: Unlike a Traditional IRA, there are no mandatory withdrawals from a Roth IRA.
    • Ability To Contribute Regardless of Age: Unlike a Traditional IRA, you can contribute to a Roth IRA at any age, even if you are retired.
    • Ability to Withdraw Contributions: Since you already paid taxes on your contributions, you can withdraw them anytime with no penalty or tax implications.
    • More Investment Options: With a Roth IRA, you have more flexibility than employer-sponsored investment options
    • Estate Planning: You can pass your Roth IRA investment account to your heirs.
    • Bankruptcy Protection: Your contributions to your Roth IRA are shielded from creditors.

    You should aim to contribute the maximum amount permitted by law to your Roth IRA each year. As you come closer to our retirement, you may want to adjust your Roth IRA investment choices to reflect your personal and financial preferences, goals and risk profile.

    How much can you contribute to a Roth IRA?

    Unlike a Traditional IRA, not everyone can contribute to a Roth IRA, however. First, either you or spouse need to earn income to be able to contribute to a Roth IRA. Therefore, if your only earnings are from investments or dividends, you may not be able to contribute to a Roth IRA.

    Second, there are income limitations based on your modified adjusted gross income that are set by the Internal Revenue Service, or IRS. These income thresholds – and the amount you can contribute to your Roth IRA – may change annually.

    How do I withdraw money from my Roth IRA?

    Roth IRAs are more flexible than Traditional IRAs when it comes to withdrawing money. The goods news is that you can withdraw from your Roth IRA any time, for any reason and with no penalty. However, if you withdraw any earnings before age 59 ½, you will be penalized, unless it is for a qualifying reason.

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  • How To Buy Stocks

    How To Buy Stocks

    How do you buy stocks online?

    If you want to how to buy stock online, here are the steps that you should take:

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    1. Choose the best stock broker where to buy stocks

    When it comes to how to buy stocks line, the first question you might ask is where to buy stocks. You can buy and sell stocks through an online stock broker. You can buy stocks online directly through a brokerage account.

    There are several factors to consider when you want to compare the best stock brokers:

    • Trading Commission
    • Investment Platform
    • Investment Products
    • Robo-Advisors
    • Mobile Trading
    • Customer Service
    • Account Security
    • Other Fees

    Separately, you may want to consider how much you plan to invest and the frequency you plan to trade. Most stock brokerage accounts have no account minimum so it is easy to open an account and get started.

    2. Open a brokerage account to buy stocks online

    Once you choose the best stock broker for you, it is time to open a brokerage account so you know how to buy stock. When you buy stocks online, you need to fund your account with an initial deposit.

    3. Choose the stock you want to purchase

    Now that you have opened and funded your brokerage account, you can learn where to buy stocks, and how to buy and sell stocks. It’s time to choose which stock you would like to buy. The art of how to purchase stock can start with you own research. You can review the company’s website to learn more about the company and its products.

    You can read the company’s annual report to understand its financial performance and operations. You can review independent research and analysis on the company, and read commentary on the company.

    If you want to go beyond the stock market for beginners, you can even get access to transcripts of the company’s quarterly earnings conference call. You can also review the company’s quarterly and annual filings with the Securities & Exchange Commission (SEC). Of course, you can review the company’s news as well.

    Each stock is represented by a shorthand symbol typically consisting of one to four letters. For example, Disney is represented by DIS and General Electric is represented by GE. When you buy stocks online, you enter the symbol itself, rather than the company name. The reason you enter the symbol is that it is simpler to enter and prevents any spelling errors.

    4. Choose how many shares of stock to purchase

    Once your select the company you would like to purchase, you next need to decide how many shares to purchase. Each stock has a certain price per share. This price is the cost you will pay, plus a commission, to purchase one share of that stock. For example, let’s say you have $1,000 in your brokerage account. If the price of Company ABC is $10, the maximum stock you can buy would be 100 shares, which is equal to $10 multiplied by 100 shares.

    The decision to purchase stock in terms of a small or large quantity is your personal preference. If you are a beginner investor and the stock market is unfamiliar, consider purchasing a small amount of shares. You can increase your purchases and buy stocks online increasingly as you become more familiar.’

    5. Choose your type of order

    When you buy stocks online, you also need to indicate when you want to purchase stock. You reflect the time element of the buy order or sell order in one of the following primary ways:

    Market Order

    A market order means to buy or sell the stock at the best available price. When you place a market order, the purchase or sale occurs almost immediately so long as there is a willing buyer or seller on the other side of the transaction.

    Limit Order

    A limit order means to buy or sell a stock only at a certain price (or better than that price).

    Stop Loss Order

    A stop order, or stop loss order, occurs once a stock has reached a pre-determined price known as the “stop price.” Once this happens, a market order is executed, and the shares are executed at that price.

    Stop-Limit Order

    Once the stop price is reached, the trade is not a market order. Rather, the trade become a limit order, and can be executed up to that limit price.

    What is the best way how to buy stocks for beginners?

    Compare the best stock brokers on Mentor to choose the best stock brokers for beginners. You can start slow, and deposit an amount in your brokerage account that makes you feel comfortable. You can choose one of the best robo-advisors to manage your money for you, if you prefer. The top robo-advisors provide an automated portfolio management service using computer algorithms and charge a flat annual fee expressed as a percentage of your total portfolio amount. Lastly, you can also choose your own stocks, mutual funds or ETFs to buy and sell.

    Many of the top stock brokers and brokerage firms provide tutorials on how to buy stocks for beginners and how to learn more about the stock market for beginners.

    What does it mean to buy and sell stocks?

    If you want to understand the stock market for beginners, then you need to understand how to buy stocks for beginners. When you purchase stock – whether you buy stocks online or over the phone – you are buying ownership in a company. As an investor, you can purchase one or more shares of stock that represent your ownership of that company. These stocks trade on a stock exchange where investors can buy and sell stock in publicly traded companies. Each stock has a price, which can fluctuate up or down based on several factors.

    There are two primary ways to make money when you purchase stock. The first is when the value of the stock increases. If you can sell a stock for a price that is higher than what you paid for that stock, you keep the profit. For example, if you buy 1,000 shares of stock for $10, your cost would be $10,000 to buy that stock. If the price increases to $15 per share, and you sell the stock, then your profit is equal to $5 multiplied by 1,000 shares, which equals $5,000.

    The second way to make money with stocks is through dividends. Dividends represent a portion of a company’s earnings that are distributed to shareholders on a quarterly or monthly basis. As a shareholder, you can receive a certain amount of dividends for every share you own.

    When you sell a stock, you are relinquishing your ownership in the company and selling your shares to another buyer. The price of a stock can increase or decrease, which determine whether you make a profit.

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  • How To Open A Brokerage Account

    How To Open A Brokerage Account

    What is a brokerage account?

    A brokerage account is an account in which you buy and sell stocks, bonds, mutual funds, ETFs, currencies, futures, options contracts and other investments.

    You can use a brokerage account as your primary taxable investment account, where your investments will be subject to short-term capital gains tax and long-term capital gains tax. You can also open a brokerage account for a Traditional IRA or Roth IRA, and participate in special tax-deferred or tax-free benefits, respectively.

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    How do you open a brokerage account?

    Once you have selected an online stock broker, the process of how to open a brokerage account is simple. You can open a brokerage account with an online stock broker in just a few minutes online.

    You will need several pieces of information to open a brokerage account, which may include:

    • Name, address, date of birth and contact information
    • Social Security Number
    • Driver’s license or other government identification
    • Employer Name and occupation
    • Annual income and net worth

    You can open a brokerage account with no minimum deposit in many cases, but typically fund the brokerage account thereafter. You can typically fund an account with a bank wire, ACH deposit or by check. Once you have funded your brokerage account, you are ready to start investing.

    How do you choose the best brokerage account?

    When it comes to choosing the best online stock broker, there are several factors to consider. The best online brokerage account for you depends on what you value most – whether it’s the trading platform, mobile trading or customer service.

    Here are some of the essential factors to consider when selecting the right stock brokerage account and online stock broker for you:

    Trading Commission: Choose an online stock broker and brokerage account with reasonable trading commissions. Most online stock brokers and brokerage accounts will charge a flat commission for each trade, whether you buy or sell, regardless of the share count.

    Investment Products: When it comes to the best online stock broker, you should look for flexibility in investment products. While your focus may be stocks, your online stock broker also may offer ETFs, mutual funds, options contracts and other investment products. You can use Mentor’s brokerage account comparison to find the right stock brokerage account for you.

    Mobile Trading: If you are looking for the best brokerage account for mobile trading, make sure to find the best online stock broker who offers this flexibility. The good news is that the online stock broker and brokerage account you choose likely has mobile trading, since most major platforms do. Mobile trading is most useful for active traders with a brokerage account who prefer to trade stocks while away from a computer.

    Customer Service: When finding the right online stock broker, customer service may or may not be an important criteria for you. Some investors prefer an online stock broker to have 24/7 customer service, while others are comfortable to chat online with their online stock broker. The good news is that most of the best online stock brokers and brokerage accounts offer comprehensive customer service, with many open for extended hours.

    Investment Platform: When choosing the best online stock broker and stock brokerage for you, find the online stock broker with the right investment platform. The investment platform, tools, research and analytics are important factors when selecting an online stock broker and brokerage account. The best online stock broker for you should have the right desktop or web-based trading platform that makes you feel most comfortable.

    Regulatory: The best online stock brokers in the U.S. are regulated by the Securities and Exchange Commission (SEC) and U.S. law. Your online broker and stock brokerage account also will be a member of the Financial Industry Regulatory Authority (FINRA). You can always verify your online stock broker with FINRA’s free stock broker check tool.

    Other Fees: Stock brokers make money from commissions and fees. Therefore, your online stock broker may have other fees such as inactivity fees and potentially IRA fees.

    Account Security: The best brokerage accounts have secure platforms and the highest standards for online security. Secure websites (noted with the “https”) are commonplace when you choose the best online brokerage. Some online stock brokers even offer two-factor authentication for an extra level of security.

    Which brokerage account is right for you?

    • Regular Brokerage Account: If you want to invest in the stock market, a regular brokerage account with an online stock broker is a smart choice for you. In this brokerage account, you can manage your own stock portfolio. Here are our best online stock brokers.
    • IRA Brokerage Account: If your goal is to save for retirement, you can also open an IRA brokerage accounts. There are two types of IRA brokerage accounts: a Traditional IRA and a Roth IRA. A Traditional IRA is a retirement account where you make contributions with pre-tax dollars, and pay income taxes when you withdraw from your Traditional IRA. A Roth IRA is a retirement account where you make contributions with after-tax dollars, and do not pay any income taxes when you withdraw earnings from your Roth IRA. The good news is that you can have both a regular brokerage account and one or more IRA brokerage accounts with your online stock broker. Here are our best Traditional IRA brokerage accounts and our best Roth IRA brokerage accounts.
    • Robo-Advisors: If you would like a brokerage account and online stock broker where someone else manages your investment portfolio, then a robo-advisor can be an attractive option. A robo-advisor is an online portfolio management service that automates the allocation of your investments through a computer algorithm, rather than a human money manager. Here are our best robo-advisors.

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