MORE than Finances

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Is Buying Real Estate With Bitcoin Safe, Or Even Possible?

is-buying-real-estate-with-bitcoin-safe-or-even-possibleMy wife and I have discussed buying a house on multiple occasions. With me being the frugal person I am I’m always looking for better, safer, and cheaper ways to make large purchases. So one question that I had to find the answer to was “can you buy real estate with Bitcoin?”

What Is Bitcoin

CNN Money Describes Bitcoin as a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks! There are no transaction fees and no need to give your real name. More merchants are beginning to accept them: You can buy webhosting services, pizza or even manicures.

Basically it’s just currency, one that has no national, or bank affiliation. This makes the transaction fees nothing and some people more nervous about it then any other currency out there.

Is Bitcoin Really Safe?

Simply put yes it’s safe. You can find arguments for both sides of this argument but the basics are this. The Bitcoin itself is safe, you can hold on to it and not lose your Bitcoin. However, the volatility is what some consider to be unsafe. In 2016 the price has ranged from $358.77 (January 15th) to $916.79 (December 23rd) which sounds like it makes it a great investment, however it’s also lost that same amount of value in 2014.

So weigh the options of what you consider safe, Bitcoin is not the Dollar and will react differently to world events. When Britain left the European Union Bitcoins price went up when most everything else lost value.

Can You Buy Real Estate With Bitcoin?

What can you buy with BItcoin? Well if you know where to shop almost anything. More online retailers are taking Bitcoin as a form of payment. Stores like Overstock.com, Ebay, Amazon, Target, CVS, WordPress.com, Subway, Victoria Secret, Paypal, the Apple App Store, and more. Using these sites you can buy everyday things from soaps and shampoos, to movies, to even furniture. But what about something as large as a house?

Speaking with a local real estate agent she told me that as long as both parties agree on the price, and form of payment that there would be no reason that a house couldn’t be purchased using Bitcoin. She did explain that there are fees that are involved that most likely wouldn’t be able to use just bitcoin, like inspections.She also joked that she wouldn’t want her fee to be in Bitcoin but would accept it if that’s the way it came.

If you don’t want to negotiate with a specific buyer but instead want to find someone already trying to sell their house for Bitcoin then check out Bitcoin Real Estate, or BitPremier. Both of these sites already sell for Bitcoin and you don’t have to try to negotiate the price to Bitcoin.

This isn’t just in the United States but you can find houses all over the world selling for Bitcoin. In fact part of the great thing about Bitcoin is that it’s available everywhere, you can spend it world wide.

The Future Of Bitcoin

No one knows exactly what will happen in the future. We know that as of right now not only can you buy real estate with Bitcoin, but that it’s safe to do so.

What about other things, like prescriptions? Can those also be bought with Bitcoin? Next weeks article will discuss that and more.

Image by phanlop88 at FreeDigitalPhotos.net

 

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How The Financial Planning Pyramid Guides You To Wealth

how-the-financial-planning-pyramid-guides-you-to-wealth

Trying to get your financial life in order is a tall order. It wrecks nerves, causes fights, and raises blood pressure. But with the Financial Planning Pyramid it can not only be done, but can be enjoyable.

Protect Yourself – The First Level Of Your Financial Pyramid

Without a solid financial foundation your pyramid will come tumbling down when you try to build the second level. That’s why this level of the financial planning pyramid is most important.

Should the worse happen and you are unable to work you need to make sure your family is cared for. Here are four things to do to build this level of your financial planning pyramid.

  • Build an Emergency Fund
  • Get Insurance 
  • Get a Will

This is the foundation for your life so take the time and build it right. Make sure that your emergency fund is fully funded. Another thing to do is have disability insurance in case you aren’t able to work. We laugh at the ridiculous commercials but in reality this is something we should all consider.

None of us know when our time will end, we could live for 50 more years or may not make it through today, it’s a sad reality but a reality. That’s why setting up a Will and having life insurance is a must.

Grow With Automation And Investing

Once the base of the financial planning pyramid is in place it’s time to build level two.

  • Automate your savings
  • Create Multiple Streams of Income
  • Invest in safe investments

Automation is the easiest way to make sure you’re saving. If it happens automatically you don’t feel it, and you get used to not having that money.

Creating several streams of income or “side hustles” is crucial. Whether this is driving for a rideshare service, creating a online product that sells while you sleep, or getting a second job make sure you grow your income.

After growing your savings and increasing your income it’s time to start investing in safe investments. There is no such thing as a 100% safe investment, but there are safer ones.

Star by learning all you can, invest in what you know, and especially look at index funds.

Rental properties take more time and money then investing in the stock market but, can also bring hgiher returns. It’s more risky and partially in the final part of the financial planning pyramid but, if done correctly it can provide a safe investment with a good income.

The Fun Level Of The Pyramid

After building a stable foundation and growing your income and savings, it’s now time to take some risk. Some consider this the “fun” part of building your financial planning pyramid. Remember that without the first two parts of the pyramid this won’t work so make sure they’re in place first.

  • Buying Gold
  • Timing The Market
  • Real Estate

Gold is one of the most valuable things in the world. As an investment it’s sometimes looked at as risky, which is perfect for the final part of our financial planning pyramid. To start investing in gold check out this article.

Timing the market in general is a very bad idea. But at this level, using no more than 5% of your wealth, it can be fun and make huge returns if done right.

Investing in rental properties can be risky, but flipping properties or reselling them is even riskier. People make fortunes doing this and it can be done, do your research and find a property your interested in.

The Easy To Follow Financial Planning Pyramid Can Help You

No matter what stage of the pyramid you are on now, keep building on it. Success may be years away or only a few months but following the financial planning pyramid can get you there faster.

Image by pazham at FreeDigitalPhotos.net

 

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529 Plans – A Powerful College Savings Tool And More

In the previous post, we talked about using Coverdell ESA’s as a method of saving for college. While this is a useful tool, there’s another tool that may be better – the 529 Plan. What are some of the similarities and differences between the two?

Tax Treatment

As with ESAs, contributions to a 529 Plan are not deductible for federal tax purposes. However, earnings are tax-deferred. And if used for qualified education expenses, accumulated funds can be withdrawn tax free. And as a custodial account, UTMA accounts let you save in a child’s name, tax free!

One feature that some 529 Plans have which all ESAs don’t are state tax benefits. Some state plans offer an upfront deduction on contributions, while others make withdrawals exempt from state taxes in addition to the federal tax exemption.

Contribution Limits And Requirements

Each state has their own 529 Plan, but investment in a state’s plan doesn’t restrict you to using the funds for a school in that state. You can live in Texas, invest in a California plan, and send your beneficiary to college in New York.

With the inflation rate for college rising faster than the normal inflation rate, some people want to save more than the $2,000 annual limit for ESA’s. The 529 Plan has a much larger limit. You can contribute up to the limit set by the state offering the plan, which is usually over $300,000 per beneficiary.

And unlike ESA’s, there are no income limitations for those who want to contribute to a 529 Plan.

Qualified Withdrawals

Unlike ESAs, in which beneficiaries must use the assets by the time they reach age 30, there is no age limit on the use of 529 Plan assets.

But although ESA funds can be used for elementary, secondary, and post secondary school expenses, funds in a 529 Plan can only be used at a post secondary school.

And like the ESA, earnings in a 529 Plan that aren’t used for qualified expenses will be subject to income tax and a 10% penalty.

Available Investments

While ESAs are more flexible with the type of investments you can choose, 529 Plans are more restrictive. Funds can only be invested in portfolios established by the plan.

Each portfolio will have different investment objectives, but there will usually be an option for a portfolio whose asset allocation becomes more conservative as the beneficiary reaches college age. In addition to this, you’re allowed to change the investment strategy once a year.

Additional Benefits

Not only is the 529 Plan a great savings tool for college – another benefit is that it can be used to reduce the size of your estate. Contributions of up to $13,000 per year can be made to the 529 Plan without paying a gift tax. Once completed, this money is removed from your estate.

And since you can treat a contribution as being made over a five-year period for gift tax purposes, you can contribute a lump sum of $65,000 in the first year and still avoid gift tax. With this method, the money and its future appreciation will be removed from your estate faster.

Closing Thoughts

So because of the larger contribution limits, state tax benefits, and ability to remove assets from your estate, I think the 529 Plan has the advantage over the Coverdell ESA.

What do you think? Do you have a 529 Plan? Do you like them better than Coverdell ESA’s?

This post was included in the Carnival of Personal Finance during the week of July 6, 2010. Check out My Journey To Millions’ for a variety of great articles!

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Five Basic Documents You Should Consider In Your Estate Plan

Let me start off this post by saying that death is not the most exciting topic to be writing about! However, it is a part of life, and I believe that if you have loved ones and you consider yourself a responsible person, then you should consider having these documents in your life.

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