Monthly Archives: March 2015

What is the New Age of Retirement?

When Can I Retire

When will I retire?  In the past, the answer used to be common for many people: 65 years old.  People stayed employed by the same company throughout their career, and that company offered a guaranteed pension when they retired at a certain age – usually 65, which also used to be the age that full social security benefits set in.

But according to an article by US News, 65 is no longer the average age people expect to retire.  With employee sponsored pensions plans becoming a thing of the past for more and more companies each year, and the new age to access full social security benefits being 67, almost 40% of the people surveyed by US News believe they will retire after 65.  They also said that in 1995, 49% of adults expected to retire before 65, but as of 2010 that number dropped to 26%.

So Why the Shift?

One of the reasons for the shift is that retirement is not as cut and dry as it used to be.  One’s financial situation, job satisfaction, lifestyle preferences, and health are important factors each person has to consider.  Some people enjoy their job and choose to work longer.  Other people continue to work longer in order to achieve a better lifestyle for themselves during retirement (or maybe for their children attending college).

Another factor is that people need to plan for retirement on their own instead of being offered the stable monthly pension that was managed for them.  Many feel that they lack the information or knowledge to properly prepare for retirement, while others think they are sufficiently prepared only to realize in their 50’s or 60’s that they are not.

And lastly, people are living longer these days.  Retiring at 65 could mean 35+ years of retirement to fund, which can seem daunting to many people.

But Don’t Get Depressed Yet!

More and more people are finding that by living below their means and not accumulating a lot of debt throughout their lives, that early retirement is an attainable goal, it just requires discipline.  So whenever you think you may want to retire, whether it’s early or later in life, the best thing you can do now is prepare yourself and know if you’re on the right track. Check out this post I did a while back where I rated some of the most popular retirement calculators and find the best one for you and your situation.  If you’re single, think about what retirement looks like for you, evaluate whether you’re on track for that, and assess what changes need to be made if any.  If you’re married, do the same thing but make sure you’re having this conversation with your spouse and that you’re both on the same page with your financial goals.

And I just hope I’m able to find this tiara when I’m ready to retire!

 

Photo Credit: Steven Depolo

 

How to Save on Your Vacation Part 2 of 3: Hotels

IMG_7161This week I’m back to daydreaming about poolside umbrella drinks and room service with part two of my series: hotels and accommodations and how to save the most on them.  Summer is a popular time to travel, and hotels know this.  So try to find the best rate online by using Kayak (which I mentioned in last week’s post will search multiple travel sites at once) or by booking your hotel and airfare together as a package on sites like Expedia.  But you can still save money on your hotel beyond the nightly rate.  Here’s how:

Beware of the Extra Fees:

Hotels like to charge you extra for everything these days from parking to Wi-Fi.  If the nightly parking charge is costly, consider other means of transportation during your vacation.  Between free shuttle service from the hotel, public transportation, Uber and taxis, you may be able to play tourist without a vehicle and even save on a rental car too (double savings!)  Many hotels are also sneaking in what is called a “resort fee”, which is a daily fee on top of the room rate for use of the resort’s amenities.  If your hotel is charging one, pick up the phone and call the hotel manager.  Find out what is included and see if they’ll waive it for you.  Many times they will.

Consider the “Suite”:

And what I mean by “suite” are those extended-stay type hotels that offer all suite accommodations, in-room kitchens and living rooms.  If you have children, (especially those that go to bed earlier than you) this is a great alternative to booking two rooms or watching movies in the dark on your iPad at 8pm because your kids are asleep in the bed next to you.  An in-room kitchen will save you from having to eat out for all 3 meals which can add up quickly.

Take Advantage of Free Food:

Many hotel chains offer daily complimentary breakfast, free happy hour cocktails and appetizers, and even a free light dinner on certain weeknights.  Some have a “kids eat free” policy as well.  Like I mentioned before, anytime you can save money on a meal while you’re traveling is a bonus that should be factored into choosing a hotel.

Book Early Then Cancel:

With most hotel reservations being fully refundable, you should book your reservation as soon as possible to ensure the best rate.  Then keep an eye on the rates, and if they go down you can always rebook.  Don’t have time for this?  Then try Tingo, which is a Trip Advisor that does that work for you.  You prepay for the room through Tingo, and if the price falls, they cancel your reservation, rebook you a new one at the lower rate and give you a refund.  And if they find a better room at your prepaid rate, they’ll upgrade you for free too.

Consider Hotel Alternatives:

These days, the house-swap vacation that we saw in the movie The Holiday is becoming more and more common through sites like HomeExchange and LoveHouseSwap.  Nothing will save you more on your vacation than a free place to stay.  Sometimes the home owner even lets you use their car.  But communication and being clear about your expectation with the other home swapper are key in order for this exchange to work in your favor.  If house-swapping isn’t for you, you can look into renting a home (or even part of a home or a room) through sites like Airbnb and VRBO, which can also be more affordable than hotels and usually don’t charge taxes.

 

Photo Credit: Me again….Baja, Mexico

What You Need to Know About the Etsy IPO

etsy going public

Who doesn’t love Etsy?  I’ve ordered countless items from their site, and I’ve either absolutely loved the product or had great customer service from the seller if I needed to return or exchange something.  And how many times have I complimented someone’s jewelry or home décor item and heard “thanks, I found it on Etsy.”  And if you need a ridiculously cute baby tutu…look no further.  For the 2 or 3 of you out there that haven’t heard of it, Etsy is an online craft market where sellers of handmade and vintage items can set up online stores.  It’s similar to Ebay, except there is no bidding on items (you pay the seller’s listing price plus shipping, and they pay a fee to Etsy to list and sell items).  Etsy asks that all sellers be involved in the “creating” of their product, even if they have assistance with the manufacturing side, and that vintage items be at least 20 years old.

Recently, Etsy announced its plans to go public, which is known as an Initial Public Offering (aka an IPO).  What this means is that Etsy plans to sell shares of its stock on a public market, giving anyone the chance to invest in the company and be a shareholder.  Many times, an IPO can be an exciting time for investors to get in on a stock at a good price and see immediate growth.  But IPOs are also very risky, since the company itself is usually fairly new and the value of the share price hasn’t been tested.  My advice with any IPO is to use caution and seek businesses that you would want to invest in for the long term and not just as an attempt to get rich quick.

Etsy’s IPO comes with its share of risks in my opinion.  For starters, the company reported a net loss of $15.2M in 2014.  Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was positive at $23.1M, which some financial analysts also like to measure.  Net losses aren’t uncommon for new and growing businesses that need to spend significant amounts on advertising and development costs.  But a conservative investment approach would be to wait until a company shows consistent net income over a period of 3-5 years.  Etsy earns revenue by charging the sellers on its site a 3.5% transaction fee and a 2 cent per item listing fee.   In order for Etsy to grow, they need to continue to attract sellers and their existing sellers need to have thriving businesses.  This model could be tricky given that 80% of small businesses fail and many of the sellers on Etsy are great at crafts but might not have much manufacturing experience.  However, to assist with this, Etsy is starting a program to provide its sellers with small scale manufacturing assistance.

On the plus side, I can’t imagine a world without Etsy, which is something I look for when I’m debating investing in a company.  A viable service with great brand recognition says this company could have longevity.  Another online craft seller could come along, but we all already know and love Etsy.  So investing in the Etsy IPO is up to you.  As for me, I’ll definitely be keeping my eye on this company over the next couple of years to see where it goes.

 

Photo Credit: Manitoba Coupon Maven