I’m a huge DIY’er (or rather, my husband is), and I understand the value that comes from a job well done with your own hands and time. I am the first to admit, however, that there are some projects best left to a professional, especially when it involves quality and safety. Here are examples of projects that make more sense to be hired out, even if it means paying more for the privilege.
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An interesting offer landed in my inbox the other day from E*Trade. The email claimed that with just a few clicks, I can agree to let the firm lend out some of the shares I may own now or in the future for an estimated $671 a year in passive income. With the E*TRADE Fully Paid Lending Program, they are basically promising me free money for doing nothing different. Is this too good to be true? What is the program even about?
I did a little digging.
Securities Lending Isn’t New
Borrowing securities is as old as shorting the market itself. That’s because when you short the market (bet that the market goes down), you put up collateral to borrow shares you don’t own that track the market just so you can pay them back later. And while you are borrowing these shares, you also have to pay a borrow fee much like paying interest on a loan.
With the Fully Paid Lending Program, E*Trade is using shares that you own to lend out to other traders who want to short the security and sharing that income with you.
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The choice to have one parent stay at home with the child(ren) is a deeply personal, individual one that goes beyond finances. However, there are many reasons why it’s a good idea for stay-at-home moms and dads to seek part-time work, even if there is no immediate need for income. For instance:
1. The obvious one – extra income. Having one spouse stay at home does provide extra opportunities for saving. It’s easier to do thrifty things like cook from scratch and shop for deals when you don’t have a full-time job to contend with on top of saving money on child care. However, most families will find that there is a limit to how much they can cut their costs.
If you work part-time, even a few hundred dollars a month can significantly improve a family’s financial security. You can:
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I’ve spent a lot of time lately thinking about what I want my life to look like going forward, and what I can do to restructure. I’m in the process of reconfiguring my finances, as well as putting together a good life for my son and me.
One of the things that occurred to me is that I’d like to have a little more time. This is a common feeling of course. Most of us wish we had more time for the things that really matter to us. As I sat down and thought about this concept, I realized that there are some things I can do to get a little more time in my life. Most of those things cost money, but I think it’s probably worth the cost.
You Can’t Accumulate More Time
Time is valuable because there is no getting it back once it’s gone. I can’t just create more time the way I can earn more money. I can almost always do something different with my finances. I can invest more, raise the rates I charge for freelancing or take on a little extra work. There is usually some money available for me to earn. If all else fails, I can always sell some of my stuff or donate blood plasma.
And let’s not forget the savings side of things. There’s always some way I can spend less. If I want to, I can always keep more in my pocket.
Time is different. It’s completely irrelevant how efficiently you spend your time. Once time passes, it’s gone. In that sense, time is far more valuable so I want more of it even if I have to pay for it. The return on my investment is high — as long as I use my time in ways that benefit me for the long run.
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The rule of thumb for retirement states that a comfortable retirement requires you to replace 80% of your yearly income. But a retirement study from Morningstar found that a typical American retiree’s income replacement rate in retirement ranges from a little under 54% to over 87%. For those who fall into the lower end of the replacement range, are they going to be stuck eating ketchup sandwiches in retirement?
Not necessarily. While aiming to be able to replace 80% of your salary in retirement is an excellent goal, and one that you should certainly be working towards, you don’t need to worry about running out of money if you fall somewhat short of the mark. Here’s why:
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When I was a pre-teen in the early 90s, I used to roam the mall with a pack of girlfriends once a week.
I quickly discovered that the fun I had spending money on new scrunchies, slap bracelets, and Lisa Frank notebooks seemed to diminish as my money supply got lower. Whatever pair of earrings or soft pretzel I bought with the last of my money never seemed worth the price.
According to a this study, there was a reason for my dissatisfaction: a phenomenon called the bottom-dollar effect.
Basically, when we spend the last of our resources on a product, we end up feeling much less satisfied with it. Here’s a breakdown of the bottom-dollar effect and how you can harness it to make better spending decisions:
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