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According to recent findings from the National Federation of Independent Business, small business growth is up and business owners are more optimistic about the economy. Because most small business owners open a business near their home, we would expect major U.S. cities to see their fair share of new businesses. NerdWallet Taxes examined the top 20 biggest U.S. cities to find out how welcoming they are to small businesses. We calculated total scores for each city using data on local taxes, growth rates from the Milken Institute’s 2012 Best Performing City survey, and business owner opinions of the local regulatory environment from the 2013 Thumbtack Small Business Friendliness Survey. Four of the top 10 cities are located in tax friendly Texas, while New York City and San Francisco do not make the cut.

1. Austin, TX Tech giants Dell and IBM make their home here, but Austin proves equally friendly to small businesses. The city scores highly thanks to no state or local personal income taxes and its 2nd place rank in the Milken Institute’s 2012 Best Performing Cities for favorable growth prospects in technology, real wages and jobs. Austin also scored 2nd for its hassle-free business licensing requirements, according to data from Thumbtack’s 2013 Small Business Friendliness Survey.

Local income tax: 0% (sample median: 0%) City property tax: 1.24% (sample median: 1.35%) Growth rate rank: 2 License friendliness rank: 2

2. San Antonio, TX Home to big companies like Clear Channel and Valero, San Antonio earns the second spot in our list because it has the highest ranking for friendly licensing requirements, where on average small business owners say that the city’s regulatory environment is “somewhat friendly.” San Antonio also scores in the top 10 for its growth prospects.

Local income tax: 0% City property tax: 1.36% Growth rate rank: 6 License friendliness rank: 1

3. Dallas-Fort Worth, TX Dallas is home to over a dozen Fortune 500 companies and like other Texas cities, it is very welcoming to small businesses, scoring in the top 5 for ease of licensing requirements and growth prospects. While it did not score highly for property taxes, Dallas is still a very attractive city for small business.

Local income tax: 0% City property tax: 1.38% Growth rate rank: 5 License friendliness rank: 5

4. Baltimore, MD One of only three East coast cities to make our list, Baltimore earned a top 10 spot because it ranked 3rd for its hassle free licensing requirements. One downside is that Baltimore levies personal income taxes between 1.25 and 3.2% and scores poorly because of relatively high property taxes.

Local income tax: 3.2% City property tax: 2.27% Growth rate rank: 7 License friendliness rank: 3

5. Houston, TX Houston ranks fifth thanks to a very friendly overall tax environment. It had the third lowest city property tax rates at 1.15% and ranked third for growth prospects.

Local income tax: 0% City property tax: 1.15% Growth rate rank: 3 License friendliness rank: 11

6. San Jose, CA The only California city to make our list, San Jose earned the no. 1 spot in America in Milken’s growth ratings, largely thanks to an influx of Silicon Valley technology companies and educated labor force. The city also scored in the top 10 for low-hassle licensing requirements.

Local income tax: 0% City property tax: 1.27% Growth rate rank: 1 License friendliness rank: 7

7. Charlotte, NC While North Carolina isn’t known for its friendly income tax code, Charlotte did score highly for low unemployment tax rates and scored in the top 10 for property taxes, long-term growth prospects and non-burdensome licensing requirements.

Local income tax: 0% City property tax: 1.28% Growth rate rank: 8 License friendliness rank: 10

8. Indianapolis, IN While not as tax friendly as Texas cities, Indianapolis scored 6th for easy licensing requirements and 10th for future growth rates. Indianapolis ranked poorly for property taxes and also levies an income tax of 1.62%.

Local income tax: 1.62% City property tax: 3.35% Growth rate rank: 10 License friendliness rank: 6

9. Jacksonville, FL Jacksonville scores in our top ten largely thanks to its presence in Florida, a state with zero personal income taxes and relatively low payroll taxes. Jacksonville earned 4th place for its easy licensing requirements but scores lower for growth prospects (15th) and property taxes (12th).

Local income tax: 0% City property tax: 1.80% Growth rate rank: 15 License friendliness rank: 4

10. Phoenix, AZ Phoenix earned 10th place mainly because of Arizona’s tax friendly environment: the state scores 3rd for lowest income tax rates and 2nd for lowest payroll taxes. Phoenix scores 8th overall for property taxes and 9th for ease of licensing requirements.

Local income tax: 0% City property tax: 1.30% Growth rate rank: 16 License friendliness rank: 9

Where are San Francisco and New York City? New York and San Francisco perform poorly in the overall rankings (12th and 14th respectively) for small businesses. For a business earning $100,000 a year in profits, New York City is the worst city from a tax standpoint. New York also scores poorly (12th) from a licensing standpoint. On the bright side, its attractive job growth rates and large workforce appeal to small businesses for ease of hiring, as it earned 11th place in the Milken study among all U.S. cities.

San Francisco did not make the list because of its difficult licensing requirements and California’s high income and payroll taxes. Nonetheless, San Francisco appeals to many small businesses because of its diverse and educated workforce, favorable growth prospects and established network of high-tech companies.

Methodology: To calculate each city’s total score, we assigned weightings to the following variables: state income taxes (5%), city income taxes (10%), payroll taxes (25%), city property taxes (10%), city growth rate rankings (20%) from Milken Institute’s 2012 Best Performing City survey, and ease of licensing requirements (30%) from the 2013 Thumbtack Small Business Friendliness Survey. Licensing requirements were coded from 1-5, where lower scores indicate friendlier requirements. To determine effective state and local taxes, we assumed the business owner files taxes jointly as married, earns $100,000 in annual profits, owns a $500,000 commercial property, maintains a $50,000 payroll with 1 employee and qualifies as a new employer for state unemployment insurance tax purposes. Memphis was excluded because of data availability. Dallas and Fort-Worth have been combined in accordance with the Thumbtack survey.

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Use the scanner on your phone to download my mobile friendly user App.  Add the agent code once downloaded. Agent Code: KW2NPLHXO

Features of my new app:

  • The ability to search for homes based on criteria or by custom drawing on an interactive map;
  • GPS localized data displays homes in a given area that match the consumer’s price range;
  • The ability to easily swipe through galleries of photos to decide whether a home fits one’s needs and then add it to saved searches for convenient reference on the app or via the agent’s website, where the saved searches are synced;
  • The ability to save notes on properties for future reference; and
  • Faster communication via call, text or email.

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Austin has been named the most aspirational city in the nation by the Daily Beast for attracting ambitious citizens.  The website ranked the country’s top aspirational cities –  also referring to them as “magnets of opportunity.” After Austin as number 1, Houston came in number 3, San Antonio number 9 and Dallas number 11. The Rankings focused on economic indicators such as employment growth and per capita income, demographic factors like growth among immigrant residents and quality-of-life factors, including traffic congestion. Austin was ranked as a “place where people can enjoy the cultural amenities and attitudes of ‘progressive’ blue states but in a distinctly red-state environment of low costs, less regulation and lower taxes.” Austin also showed the largest “Brain Gain” with a 20.6% increase in new residents with a BA degree.

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A city at its best, wrote the philosopher René Descartes, provides “an inventory of the possible.” The city Descartes had in mind was 17th-century Amsterdam, which for him epitomized those cities where people go to change their circumstances and improve their lives. But such aspirational cities have existed throughout American history as well, starting with Boston in the 17th century, Philadelphia in the 18th, New York in the 19th, Chicago in the early 20th, Detroit in the 1920s and 1930s, followed by midcentury Los Angeles, and San Jose in the 1980s.

Yes, the great rule of aspirational cities is that they change over time, becoming sometimes less entrepreneurial, more expensive, and demographically stagnant. In the meantime, other cities, often once obscure, suddenly become the new magnets of opportunity.

To determine America’s current aspirational hotspots, we focused in large part on economic indicators, such as employment growth, per capita income, and unemployment. But we also took into account demographic factors, such as the growth of domestic migration and the movement of college-educated people and the foreign born.

Finally, we considered quality-of-life factors such as traffic congestion, housing affordability, and crowding—which are keenly relevant to young families hunting for the places with the best “inventory of the possible.” In a sense, we believe aspirational cities reflect a kind of urban arbitrage, where people look for those places that provide not just economic and cultural opportunity but a cost structure that allows them to enjoy their success to the fullest extent.

Our top two cities reflect the importance of  this arbitrage opportunity. Both No. 1, Austin, Texas, and No. 2, New Orleans, are places where people can enjoy the cultural amenities and attitudes of “progressive” blue states but in a distinctly red-state environment of low costs, less regulation, and lower taxes. These places have lured companies and people from more expensive regions, notably California and the Northeast, by being not only culturally rich but also amenable to building a career, buying a home and, ultimately, raising a family in relative comfort.

Like the Texas state capital and the legendary Crescent City, most of our top cities are located in the American South and lower Midwest, and they attract businesses and people not only from other sections of the country but also increasingly from abroad as well. These include No. 3, Houston, and the smaller but burgeoning oil town of No. 4, Oklahoma City. These are followed by three fast-growing, low-cost Southern cities: No. 5, Raleigh-Cary, North Carolina; No. 6, Nashville; and No. 7, Richmond, Virginia.

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Not all our top aspirational cities are in Dixie. If there’s enough growth and opportunity, solidly blue-state regions can perform well enough to stay near the top of these rankings. Such cities include No. 8, Washington, D.C., and No. 10, Minneapolis–St. Paul, as well as No. 12, Seattle; No. 16, Denver; and even No. 22, Boston. In these cities, high-tech and professional-service growth has created enough wealth to offset higher costs while offering the next generation the chance to live in a culturally vibrant place where affording a home and raising a family are still possible.

Perhaps more surprising is the high aspirational ranking of some old Rust Belt and Great Lakes cities. The middle part of the country has been losing people and jobs for half a century, but more recently several urban areas within or bordering the Midwest have established enough of an aspirational culture to reverse the pattern of out-migration and begin luring people from the coasts. These include such diverse places as No. 15, Columbus, Ohio; No. 17 Louisville, Kentucky; No. 21 Pittsburgh; and No. 23, Indianapolis.

Of course, not everyone will find a perfect match in one of these cities. For those with extraordinary technical skills, for example, it still may make sense to move to the hotbed of the San Francisco Bay Area—notably No. 24, San Francisco, and No. 27, San Jose—where economic opportunity partially offsets extraordinarily high costs, at least for a certain portion of the population.

This applies as well even to cities toward the bottom of the list, including No. 46, New York, and, in last place, No. 51, Los Angeles. If you want to break into businesses such as finance, media, and entertainment, you have little choice but to concentrate on New York or Southern California. These areas may also prove more attractive to people who have inherited money (critical to affording houses or paying high rents), as well as those whose business is closely tied to these great cities’ ethnic economies.

People must also make tradeoffs when they decide where to locate. Some value a big house and yard, while others cannot abide a city without a decent opera or good Thai food. And those obsessed with, say, their children’s educations will clearly find a broader variety of schools and cultural institutions in San Francisco or New York than in Oklahoma City.

But for those who lack these specific demands, and for those whose priority is achieving a middle- or upper-middle-class quality of life, the less expensive, often smaller, and less congested cities seem to have  the greatest appeal. This may offend the sensibilities of retro-urbanists, who tend to cluster in the great legacy cities, along with our tribes of cultural tastemakers, but the hard reality shows that, for the most part, people move to places that offer not merely the best lattes or artisanal pizzas but the great opportunity for advancement.

The Geography of Growth

We give economic growth roughly half of the weight in these rankings. This consists of three factors: employment growth, unemployment, and per capita income. This is where some of the coastal cities still do well, notably San Jose, whose recent job growth places it first, as well as No. 4, Washington, and No. 7, Seattle. The local economies in these areas have all been driven by the rapid expansion of high-tech and professional services, which explains their particularly high per capita GDP numbers.

Yet most of the big winners in the economic-aspiration sweepstakes are concentrated elsewhere, notably in Texas. Since the recession, the Lone Star State has created 1 million new jobs, five times as many as New York state. In contrast, Florida and California have lost a half million positions. Not surprising, Texas accounts for four of the top 11 regions for economic opportunity (No. 2, Austin; No. 3, Houston; No. 9, San Antonio; and No. 11, Dallas).

No big economic region outperforms Houston, a metropolitan area of more than 5 million people that boasts arguably the strongest big-city economy in the nation. Not only the global hub of the energy industry, it also boasts the nation’s largest medical center and has dethroned New York City as the nation’s leading export center. Other strong performers include No. 7, Salt Lake City; No. 8, Oklahoma City; and No. 11, New Orleans, all of which have enjoyed strong job growth over the past five years.

What Do You Get for the Money?

articleinserts_aspcities5-quality-of-life
 

Strong economic growth—particularly high per capita incomes—represents half of our ranking, but this is balanced by considerations such as cost of living, housing, and traffic congestion. “Everyday life,” observed the great French historian Fernand Braudel, “consists of the little things one hardly notices in time and space.” This reality is particularly critical for young and prospective families, for whom a higher salary or glamorous environment may mean less than the prospect of owning a decent home, particularly without the necessity of a long, dispiriting commute.

These factors, we believe, will become more paramount as members of the large millennial or “echo boom” generation enter their late 20s, 30s, and even 40s over the next decade. This demographic—projected by the census to expand by roughly 8 million by 2025—is likely to prove intensely interested in owning their own homes. Indeed, research by generational analysts Morley Winograd and Mike Hais demonstrates that not only do millennials aspire to homeownership, but among the oldest cohorts of this group, now just entering their 30s, interest in buying a house actually surpasses that of their boomer parents.

This difference in the affordability of housing relative to incomes plays a major role in boosting the rankings of some strong aspirational areas, notably Raleigh; Richmond; Charlotte, North Carolina; Kansas City; and Indianapolis. Along with traffic congestion, it tends to bring down the rankings of most California metropolitan areas, including San Francisco, San Jose, Los Angeles, and San Diego, as well as such hipster hotspots as New York and Miami. We also include “doubling up,” where more than one family lives in a household, as a surrogate for poverty (since metropolitan poverty rates are not adjusted for the cost of living).

Demographic Destiny

articleinserts_aspcities4-demo-density
 

The last component of our rankings, accounting for roughly a quarter, lies in demographic trends. Like playing defense in basketball, the most important thing here is to watch the feet. The question is movement: where are people going, and where are they not? This tells us much about future trends and how people, as opposed to the media, actually view the best places for them to settle.

Our methodology concentrates on three metrics: domestic migration, growth of foreign-born population; and growth in the number of college-educated people. These groups reflect what may be thought of as “the canaries in the coal mine”—indicators of where people seeking a better life are choosing to settle. This factor seems to jibe with our overall rankings more than any other component.

The biggest beneficiaries tend, not surprisingly, to be places that are economically vibrant but not prohibitively expensive, such as Austin, Houston, San Antonio, Dallas, Raleigh, Nashville, Richmond, and Charlotte. Over the past decade these areas have enjoyed by far the fastest growth not only in migration, but in college-educated people and perhaps most surprisingly in number of foreign-born people. Today immigrants are flocking to such unlikely places as Nashville, Richmond, Louisville, and Charlotte. As for the college-educated, they, too, are also migrating to these same aspirational cities, as well as to new hipster hotspots such as New Orleans and Nashville. The increase in B.A.-degree holders in these cities averages in the double digits or higher over the past decade, in some cases more than twice the growth in such traditional “brain gain” cities as Seattle, San Jose, San Francisco, New York, and Boston.

The Urban Future

As the younger generation, as well as newly arrived immigrants, begins to look for places to settle, raise families, and start businesses, they will flock increasingly to these affordable and demographically, economically dynamic regions. Yet it is likely that other factors—global economics, shifts in immigration, and technological changes—could influence the aspirational landscape in the years to come.

In thinking about the future, then, it is important to recall that not long ago some of the cities near the top of today’s aspirational list were facing seemingly irreversible economic decline, demographic stagnation, and even loss and deterioration of basic infrastructure. You only have to recall the dismal ’70s in Seattle, where post-Vietnam budget cuts inspired some to ask that “whoever is last to leave turn out the lights,” or Houston and Dallas–Fort Worth after the oil bust in the ’80s, when those cities were widely known for their “see through” office buildings and abandoned housing complexes.

It’s always possible that unpredictable and major shifts could topple today’s aspirational cities from the top of the list. However, given current conditions and the most likely accrual of current trends, we can expect that most of the cities at the top of the aspirational rankings will remain there for some time to come.

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An old favorite, Southern Living Magazine, has come up with a FANTASTIC summer guide for Austin!
It’s a cute read…so incredible that Austin is on EVERYONE’s radar these
days…Austin’s Summer Guide!

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You’ve got winter prep down pat. But what happens when you move to a climate with 70-degree February days? Here’s what you should know.

So you’ve finally fled the cold to somewhere where it’s warm year-round, and you’ve packed your garden trowel — lucky you.

Chances are you’ve also packed some northern notions about how to handle your new lawn and garden during your winter stay in the South or Southwest. Beware: Those carpet-bagging misconceptions could prove frustrating — and costly.

“People are generally pretty stupid when it comes to something new — and I was, too,” says Chase Landre, author of “Snowbird Gardening: A Guide for South Florida’s Winter Residents,” of when she started gardening in Florida. “It’s a completely different microcosm” in warm-weather areas.

Landre and other horticultural experts in snowbird hot spots have identified some of the top mistakes that new arrivals make so that you don’t repeat them.

Mistake No. 1: Importing your northern garden
When many snowbirds move to Florida, “They want the same stuff they were growing in Pennsylvania or in New York — which is kind of strange, because Florida offers so many other opportunities,” says Hank Bruce, a columnist, horticultural therapist and co-author of “Yankee’s Guide to Florida Gardening,” among many books. “You will try to grow lilacs, bearded iris, forsythia, lily of the valley and all those delightful spring-flowering bulbs, like daffodils and tulips — even when the neighbor tells you [they] ain’t gonna grow.”

What you should do: “Make friends with Mama Nature,” Bruce says. “You will be far more successful if you cooperate rather than compete with her. She’s gonna win regardless of what you do.”

In other words, plant what will grow in your warm-weather home, not in your cold-weather one.

Bruce suggests buying plants from independent garden centers. The stock at big-box stores may come from hothouse growers, Landre says, so the plants may not be right for the area or ready for a life in the blazing sun.

For Florida snowbirds, Bruce suggests visiting Walt Disney World in Orlando and taking pictures. “Nobody does it better than the Disney horticulture people,” he says. After all, they have to keep the park looking great every day of the year.

Mistake No. 2: Watering poorly
Snowbirds migrate south thinking about swimming pools and assuming that their plants want lots of water, too, says Peter Warren, urban-horticulture extension agent for Pima County in Tucson, Ariz. Driving to work in January, Warren will see puddles on the ground from people watering their gardens.

What you should do: Adjust. “Irrigation is … the No. 1 reason plants don’t do well — either under- or overwatering,” Warren says.

Plants need more water in the hotter, drier months in the desert — especially in May and June, before Arizona’s monsoon rains arrive. “In the winter, it’s the opposite,” he says. With higher humidity and lower temperatures, plants don’t grow much and don’t need much water. Overwatering is costly and can kill plants, he says.

In Florida, Landre suggests watering plants and lawns just once a week or once every 10 days in winter. Adjust the irrigation again for summer watering, if you leave in the spring, she says. Leaving the water off then can invite plant stress and insect infestation — and nothing for you to return to the next winter but disaster.

What you should do: “If your soil has no nutrients, you have to learn about amending the soil,” she says. That means giving your plants food. In a sandy place such as Florida, add organic peat moss to the soil before planting to “give the root ball a drink,” Landre says. Add composted cow manure, which enriches the soil. Fertilize the soil periodically, she says.

In the desert, the soil is more alkaline, with less organic material and higher salinity than in the North or East, Warren says.

“If you’re desperate to have hydrangeas or blueberries or something from back East, plant them in a container, where you can control the environment,” he says. “In other words, don’t force them into inhospitable soil. Even amending the soil in the desert isn’t successful in the long run. “It won’t work, and it will eventually kill them.”

Mistake  No. 4: Forgetting that things grow year-round
Snowbirds might reasonably come south in a northern frame of mind, thinking that their lawn and garden won’t grow much in the winter. They buy plants without much attention to how much things grow — and grow. (Bing: Find drought-tolerant plants)

What you should do: Plan for the growth cycle. Plants can grow larger and faster, but that may mean more work for you.

Not interested in more maintenance? Buy slow-growing or low-maintenance dwarf plants, Landre says. In central Florida, that might include evergreens such as Indian hawthorn, low-spreading junipers, giant evergreen liriope and dwarf nandina, according to Polk County’s master-gardener program’s tip sheet for snowbirds.

Mistake No. 5: Just watching the grass grow
Many snowbirds envision a lush, close-clipped green carpet of the kind of grass to which they’re accustomed. Reality is a bit more complicated.

“The grass is shy and retiring down here,” Bruce says. “Beautiful Florida lawns grow on sweat — your sweat.”

What you should do: Get ready for some hard work, or plant grass that’s easier to maintain. For Floridians, Bruce suggests annual rye.

“It grows fast, it’s dark green, it’s tough, it gives you something to mow for the winter months and then it’s going to die out in the spring,” he says.

Good year-round grasses include St. Augustine, a rugged grass that looks like crabgrass, grows well in the sand, handles pests well and can stay green. It must be laid as sod, however. Two other grass options, which can be seeded and need less water, are Argentine and Pensacola Bahia, Bruce says.

Homeowners in the Southwest desert usually choose a hybrid Bermuda grass, says Paul Ellis, a master gardener with the Pima County Master Gardener Program.

“That’s a grass here that in the winter is going to be dormant,” or brown, he says. Its growing season is the summer. Expect to water it a lot, he says.

Most experienced snowbirds, however choose xeriscaping — or low-water, natural landscaping — instead of grass. It’s less expensive and less of a hassle.

Mistake No. 6: Forgetting about the vegetable garden
For Northerners, winter is a time to leave the vegetable garden alone and let it rest and recuperate before planting again in the spring.

What you should do: Take advantage of winter weather that’s warm enough for plants, too cold for insects and just right for working in the garden. In Florida, for instance, fruits, potatoes and collard greens can grow in the winter, Bruce says.

Mistake No. 7: Thinking the sun sits still
You’ve planted local plants. You’ve watered them correctly. You have a timer set so they’re irrigated when you leave town. You’ve thought of everything — or have you?

Have you forgotten to account for the reason you came here in the first place: the sun?

What you should do: Know that the sun moves a lot throughout the year. “The sun moves more to the south in the winter and more to the north in the summer. And people don’t think about that when they are planting,” Landre says. “They don’t plant plants in the right spot, and the [plants] will cook in other times of year.”

Before you plant, ask yourself: Where will the sun and light be later in the summer? What’s shady now may not be in a few months.

“The solution to this is to find plants that like … both sun and shade,” says Landre, citing croton, arboricola and pygmy date palms, among others.

Mistake  No. 8: Ignoring microclimates
People come to the desert to warm their bones, and they naturally think that heat-loving plants will thrive everywhere. But microclimates, especially in the desert, can create extreme cold spots that must be considered. Without much cloud cover, winter nights can be chilly, with huge temperature fluctuations over 24 hours. (Bing: Find lawn-care services)

What you should do: “Consider the topography of your house and garden before you plant,” Warren says. For example, perhaps don’t stick that citrus tree down at the base of a hill. Cold travels downhill easily and pools in the low places. So if you’ve got a low point on your property, such as a dry riverbed, that place can be much colder there than elsewhere.

“Use mostly low-maintenance, slow growing, non-fussy shrubs and trees,” Landre says. “For lots of color, plant annuals, have year-round irrigation and become a patron of a good local plant nursery.”

 

 

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

Original article by: Christopher Solomon of MSN Real Estate

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How much will the first pope to retire from the job in nearly 600 years collect each month?

What kind of retirement package do you give to someone who’s spent 60-plus years on the job, including almost eight as chief executive? If you’re the Roman Catholic Church, and that someone is Pope Benedict XVI (the once and future Joseph Ratzinger), you give him a monthly pension worth 2,500 euros, or about $3,340.

The Italian newspaper La Stampa broke the story this week, reporting that the 85-year-old Benedict — the first pope in nearly 600 years to retire from office — will receive the pension that the church typically offers to retired bishops. (Don’t speak Italian? Neither do I: Britain’s Independent has the story here.)

 

Coincidentally, the pope’s pension is almost identical to the maximum Social Security benefit a U.S. retiree could earn if she retired this year — $3,350 a month, according to the Social Security Administration’s benefits calculator. To receive a check that size, that hypothetical retiree would need to retire at age 70 or later after having earned the taxable maximum salary throughout her career — the equivalent of $113,700 this year.

 

Of course, most of Benedict’s personal expenses, from food to gardening, will be covered by the Vatican for the rest of his life, so his pension is mostly play money. (Alas: no grandkids to visit.)

 

The pot could get sweeter, too, according to La Stampa: If Benedict’s successor awards him the status of emeritus cardinal — not out of the question, since Ratzinger held various cardinal titles before being elected pope — his pension could double.

 

 

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

Original Article by: Matthew Heimer at  MarketWatch.

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Now is the right time to simplify your financial life for 2013. But conventional wisdom on how to do it might be dead wrong.

 

The old-school advice for simplifying your finances boils down to “less is more”: Consolidate your accounts, cancel unused credit cards, and streamline your investments.

In today’s world, however, less is often less. Trying to simplify your financial life can boomerang on you with unexpected consequences.For instance, cutting down to one or two credit cards — or doing without them entirely — can hurt your credit scores. Consolidating your financial accounts could actually cost you more, and even leave you more vulnerable to lawsuits.

Here are some thoughts on avoiding pitfalls as you simplify your finances for an easier 2013.

Start with a purge. Don’t hang on to paperwork “just in case.” You should have a clear reason for hanging on to documents. If it’s tax-related, you typically should store it for seven years. In many cases, you can scan a document and toss the original (but don’t trash official documents such as marriage, birth and death certificates). Financial institutions are required to keep copies of your statements for six years, so you don’t necessarily need to keep hard copies.

Two gadgets can make your paperwork decluttering go faster: a cross-cut shredder and a really fast scanner, like the ScanSnap from Fujitsu.

Streamline your credit cards the smart way. I cringe when I hear people being advised to close credit card accounts, especially if they’re told to do so because “a large number of cards could hurt your credit rating.” The FICO scores used by most lenders don’t punish you for having “too many” lines of credit. In fact, having multiple open accounts is usually a positive factor in your scores.

What can hurt your scores is shutting credit accounts, or piling all your charges on one or two cards. The FICO scoring formula is sensitive to how much of your available credit you’re using. Reducing available credit by closing accounts, or using too much of your available credit on any card, can cause your scores to drop.

The less of your credit limit you use, the better. That’s true whether or not you pay your balance in full every month (which you should, by the way). A good rule of thumb is to use 30% or less of your credit limit at any given time. If you regularly use more than 50% of the limit on any card, consider shifting some charges to a second or even third card to ease the burden on your scores.

You can switch to cash or debit cards for everyday purchases. For big-ticket or online purchases, however, you’ll probably want to use credit cards, since they offer consumer protections that other methods of payment lack.

If your FICO scores are high (say, 750 and above), and you won’t be in the market for a major loan within the next year, you can consider closing some unused accounts, particularly retail store accounts you don’t use or cards that charge an annual fee. Otherwise, a smarter course is to keep those accounts open.

If you’re having trouble keeping track of all your credit accounts, consider using an aggregation service such as Mint.com. Checking in weekly will help you monitor your balances and spot any fraudulent charges on otherwise dormant cards.

Remember, the only smart way to use credit cards is as a convenience. If you have credit card debt, you need to make a plan to get it paid off as quickly as possible. If it would take you five or more years to pay off this debt, you may want to check with a legitimate credit counselor (find one here) or bankruptcy attorney.

Consolidate, but with caution. It can be tough to monitor multiple retirement and investment accounts. You could pay more in account fees and find it difficult to maintain appropriate asset allocations.

But that doesn’t mean you should lump all your accounts together, or even bring them all under one financial institution’s roof.

Let’s take the common recommendation to roll old 401k accounts into individual retirement accounts, for example. You’ll likely have more investment options with an IRA, but you could end up paying more for them if your 401k gave you access to the lower-cost institutional funds provided by many large-company plans. (There’s a reason financial institutions are so eager for you to roll over into an IRA — they’ll typically make more money by charging you retail rather than investor prices!)

Also, funds in IRAs have fewer protections from creditors, should you be sued or wind up in bankruptcy court, than 401k’s. IRAs are typically protected up to $1 million, while protection for 401k’s is unlimited. That’s not a concern for most people, but if you have a large balance (or are likely to accumulate one) you might want to factor this into your decision.

Another option to consider is rolling your old 401k accounts into your current employer’s plan, if that’s allowed. Again, that will make it easier to keep track of your investments, but you’ll want to make sure you’re not transferring your account away from a really good plan unless your current one is better.

Insurance is another consideration. The chances that you’ll ever need the coverage provided by the Securities Investor Protection Corp. are slim. SIPC pays back investors if a brokerage goes broke or if securities are stolen by a broker. If a failed firm can’t be merged with another brokerage, SIPC divides up the broker’s remaining assets among customers and then uses its own funds — up to $500,000 per account, including a maximum $250,000 for cash claims. If your claim exceeds those limits, which is rare, the broker often has insurance that will make you whole. Still, some people are uncomfortable keeping more than $500,000 at any one brokerage firm. If you have substantial assets, you may want to spread them around.

Simplify your investments. You may need to keep your money in different investment accounts, but you’d be smart to seek simplicity when choosing your actual investments. You can eliminate the hassles of asset allocation and re-balancing by choosing so-called lifestyle or target-date maturity funds. These funds offer broad diversification and regular re-balancing so that your portfolio stays in tune with your long-term goals. The best such funds don’t try to beat the markets, since most funds that attempt to do so fail miserably. Instead, they use low-cost index and exchange-traded funds to match the market returns. If you don’t have access to good-quality lifestyle or target-date funds, look for a good balanced fund (60% stocks, 40% bonds) or build a simple portfolio using low-cost index funds and then re-balance back to your target asset allocations once a year.

Set up savings “buckets.” When I had a single savings account, it was hard for me to keep track of how much of the money was earmarked for various purposes. If I had an unexpected car repair, would there be enough left to pay our property taxes when they’re due, plus cover our insurance premiums and our holiday splurge? Now each goal has its own labeled savings account at an online bank that doesn’t have minimum balance requirements or charge monthly fees. Each month, money is automatically transferred from our joint checking account at a brick-and-mortar bank into each of these savings buckets. Every large, irregular expense — from vacations to car repairs — has its own account, and I can tell at a glance where we stand. If a car or home repair exceeds the amount we have saved, I can shift money from our emergency fund or cut our spending until the bucket is refilled. The system sounds more complicated than maintaining one savings account. In fact, it has greatly simplified our lives, because I know the big expenses are covered.

Automate your payments. If paper checks are still a big part of your financial life, explore the advantages of electronic banking. Direct deposit means no more standing in line at banks to cash your paycheck (plus fewer opportunities for thieves to steal or alter your check). Electronic bill payment typically is safer and more secure than sending checks through the mail. Plus, many bills can be automated. You have several choices: setting up recurring payments through your bank’s bill payment system (a good option if the bill amount is the same every month), having bills charged to a credit card or authorizing billers to take the money directly from your checking account. Even if you’re nervous about ceding control of other bills, you should make sure that minimum payments to credit cards and loans are made automatically, so you don’t run the risk of missing a payment and damaging your credit scores.

Rethink consumerism. Buying less leaves more money in your pocket for saving and investing. Buying less also means less hassle. The less stuff you buy, the less stuff you have to maintain, insure, repair and replace or donate when you’re done with it. Breaking the habit of shopping and spending can be a surprisingly powerful way to simplify your life.

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

Original Article by: Liz Weston, MSN Money

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You might see some holiday deals on these items, but you’ll likely get much better prices if you wait a bit.

 

With all the Black Friday ad leaks and sneak peeks unearthed in the past few weeks, this season’s shopping extravaganza is looking ripe with deals and discounts for all. But even though many product categories will see new all-time low prices, not everything will be a good purchase on Black Friday.

In some cases, you would be better off skipping certain deals and waiting for a better offer later on. Here are 10 items that are not worth buying this Black Friday.

Toys

We’ve said it many times already, and we’ll say it once more: Black Friday is not the best time to buy toys for the holidays. Many will likely still be discounted for Black Friday, and it may feel pretty good to get your shopping done early, but you won’t love that sinking feeling you’ll get when you see bigger discounts on those toys about two weeks before Christmas.

Game consoles without a bundled item

Speaking of toys, if you’re looking to buy any of the major video game consoles this holiday, you’re likely to get more bang for your buck by opting for one that comes with a few extras. While we’ve already seen a few choice Xbox deals in the leaked Black Friday ads, in years past the vast majority of Editors’ Choice console deals went to holiday bundles that included premium accessories and two or three game titles. These were frequently discounted 30% to 40% off their retail prices.

Brand-name HDTVs

Black Friday is an excellent time to invest in a new HDTV, as we predict a variety of size categories will hit their lowest price points. But don’t expect the best deals to be tagged with name brands. Typically, the rock-bottom prices will mostly apply to third-tier manufacturers. Instead, brand-name TVs tend to see their best price of the year in January and February as manufacturers look to clear stock in preparation for new models in the spring.

The latest digital cameras

There’s no shortage of digital camera deals around Black Friday, but keep in mind that the premium current-generation models are just a few months away from being replaced by a new line of 2013 options. If you’re eying a brand-new digital SLR, we recommend waiting until February or later when it becomes an “old model,” resulting in more aggressive discounts from retailers.

Christmas decorations

While not typically on anyone’s “To Buy on Black Friday” list, Christmas decor tends to end up in-cart as impulse buys. Sure, that string of lights or holiday wreath might be on sale, but deals on Christmas items get better the closer we get to the holiday itself — and of course are the best after the holiday.

Office supplies

For some, it may seem silly to advise against office supply deals on Black Friday, as it’s not typically a category associated with the shopping event. But for several years running, office supply stores like Office Depot and OfficeMax have released Black Friday ads in the hopes of encouraging an uptick in business. Unfortunately, these deals are generally no better than those we see throughout the rest of the year. In fact, during the entire Thanksgiving through Cyber Monday stretch in 2011, we only found a measly three Editors’ Choice deals in this category.

Jewelry and watches

We’re flagging this accessories category “do not buy” for the entire holiday season. Much like Christmas items, there will be lots of sales advertising shiny, metallic objects perfect for him or her. But the discounts on jewelry around the winter holidays are no better than those around Valentine’s Day, when baubles are at peak demand. And instead of buying a watch now, consider holding off until the spring and summer when we see more Editors’ Choice deals.

Winter apparel

During Black Friday, we’ll likely see some of the best apparel coupons of the year from a variety of retailers. However, if winter apparel is on your list, it’s smarter to hold off until January, when those items are added to clearance sales that take much deeper base discounts. We will inevitably find additional stacking coupons then too, to make those stronger sales even better for your wallet.

Apple iPad Mini

The long-awaited iPad Mini will set you back at least $329, and if it follows the price pattern of its distant predecessor, the first generation iPad, it won’t see a discount until several months from now. While there’s an off-chance that an attention-seeking retailer could offer an iPad Mini promotion — the latest full-size iPad is included in the Target Black Friday ad, after all — the bottom line is this: The iPad Mini features essentially the same innards as the iPad 2, and we’re predicting that the latter will fall to $299 this Black Friday. Therefore, the iPad 2 will offer more screen real estate at a lower price.

While we advise against purchasing the above products around Black Friday, keep in mind that nothing is written in stone, and we may still see some stellar deals within these categories. However, it’s more likely that we’ll encounter so-so offers, so it’s best to temper your expectations.

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

Original Article by: MSN Money partner

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