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Despite the name of his wildly popular blog, Smart Passive Income, blogger and entrepreneur Pat Flynn readily admits there is no such thing as 100 percent passive income. Although he made a name for himself with his six-figure monthly income reports from his passive income pursuits, he also details how much work it takes to get his ideas off the ground.
To truly earn a viable return on your passive income pursuits, you'll need to put in plenty of upfront work and hustle to get your idea off the ground -- with little to no reward on the front-end. But stick with your goals and you could create multiple streams of revenue that are automated and ready to put a profit in your bank account.
Here are 5 ways to get started making passive income.
1. Real estate.Real estate investing is one of the most common passive income strategies used today. Buy a house (or a commercial property, storage unit, or building), fill it with tenants, and you'll collect income every month, whether you're sitting at the office or on the beach in Fiji. Of course, vetting tenants, making timely repairs, and handling other property management needs isn't necessarily the ideal for passive income seekers, though hiring a property manager can relieve you of this burden.
Real estate crowdfunding platforms offer another opportunity for increased passive profit without the steep investment traditionally associated with real estate. RealtyMogul.com connects accredited and institutional investors with a range of debt and equity real estate investments for as little as $5,000. The company also helps borrowers and sponsors with debt and equity financing.
Need other ideas? Companies like Airbnb are popular for turning your home into passive income, but there are other sites that turn your property into money-making machines. Camp in My Garden connects campers with home and land owners who have a backyard to spare. Advertise your garden oasis to find people who actually want to pay you to sleep in your yard and start earning.
2. Digital coaching.Coaches have been making passive income off the need for education on a variety of subjects for years. But digital coaching is quickly becoming a viable money-making option with multiple revenue stream possibilities. Once you've built a brand for yourself as a coach, you can make money off info products, programs, webinars, and more.
If you don't want to build out your own website, sign up with Coach.me and take its straightforward test to start offering chat-based coaching, paid plans, or phone consultations. While coaching over the phone isn't exactly passive, Coach.me's paid plan system is. These micro courses are unlocked by your clients one day at a time with an available price point of $0.99 to $149.
3. Peer lending.Help someone in need of a loan without the sky-high interest rates and complex rules while earning a healthy return on your investment. Sites like Lending Club make peer lending possible by connecting independent borrowers and investors for more flexible terms and low fixed rates. For investors, you can earn an average of 5.23 to 8.82 percent on your return and earn monthly cash flow.
Of course, there is always a risk of default in any type of lending, but it's typically pretty low. Meanwhile, the results can be highly profitable. Mr. Money Mustache detailed how he earned an annualized return of over 17 percent on a $33,000 and growing balance. But don't stop your researching with Lending Club. You can also find peer lending opportunities in places you probably haven't considered like Reddit's Borrow subreddit, where vetted users lobby for small personal loans in return for interest.
4. App development.Creating an app for passive income isn't a new idea, but the concept has been transformed from a time-consuming and costly process to one anybody can outsource or execute quickly. From iPhones to Androids, apps are in high demand, but it can be a tough sell to stand out. Simplify the process and learn how to make easy games without coding from a site like Udemy to get started, or find a developer to do the work for you with a site like Upwork.
How much can you really earn by making and selling your own apps? The sky's the limit for savvy developers with solid marketing know-how and social media experience, but a recent thread on Quora on the topic garnered responses from $20 a day to $10,000 a month.
5. Social shopping.Think you've got great style? Wish you weren't just spending money on great clothes, but making money as well? Thanks to new social shopping programs, it's possible.
Get paid to wear stylish clothes and take a selfie for the world to see -- and buy -- with Stylinity. When someone purchases a look that's driven by your selfie, you earn Style Perks that can be redeemed for cash, experiences, and products. Share your look on your blog or social media channels to spread the word in hopes of some purchase action on your selfie. And if you purchase a product from a Shoppable selfie (even your own), you can also rack up the rewards to put yourself one step closer to passive cash.
Of course, this list isn't comprehensive. I've experimented with several of these, and I'm active in several others, including acting as a silent partner in two or three other marketing firms in order to earn a return on my money without the hassle involved in starting my own businesses. What you'll find is that passive income is really about your mindset. There are plenty of opportunities out there to leverage the resources of others without overtaxing your own -- it's up to you to be diligent about finding them and profiting.
What's your favorite way to earn passive income? Which ones have proved the most lucrative for you? Share your experiences in the comments below:
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.
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Massachusetts attorney general Maura Healey has decided to get tough(er) on fantasy football, suggesting that no one under the age of 21 should be allowed to participate in what's really just another form of gambling.
Like it or loathe it, it's hard to argue with Healey's logic, or her ability to enforce new rules on companies like DraftKing and FanDuel. What I dislike is the broad, sweeping, and apparently thoughtless analogy she used when discussing what to do about fantasy sports.
Healey discussed what she views as "legal" forms of gambling, and threw stock market investing into that category.
"We play the stock market," she said. "There are different ways in which gambling may happen."
Now, I have no idea how Healey approaches her own investing. For all I know, she does gamble: perhaps she throws darts at a list of stocks or mutual funds pinned to a wall, and picks her portfolio that way. Perhaps she devotes two hours to day-trading stocks, in between her official duties. Maybe she loads up her portfolio with risky initial public offerings of biotechnology companies, and is simply expressing her views in the wake of a lot of losses in recent years.
News flash: investing in stocks can be gambling, but it shouldn't be, and only when it's done recklessly or without adequate research or information is it so. In the stock market, you're buying assets that have real appraised values – history suggests that over the long haul, the value of a diversified portfolio will appreciate. In fantasy sports? Picking an (imaginary) team and hoping they'll do better than that of anyone else isn't the same. You don't own the players; they aren't under contract to you.
The problem is that people listen to politicians, even if they tend to distrust them as a class. And lots of politicians with axes to grind or political scores to settle end up voicing large, sweeping generalizations about the world of money. Generalizations that, if we all took them seriously, could cause us to make big missteps.
For instance, while Maura Healey chooses to see stocks as "gambling", should you avoid investing in the stock market? I wouldn't advocate random, indiscriminate investing in risky stocks, but shunning those with strong fundamentals based on someone else's misconception, and making your retirement nest egg suffer as a result, is another matter altogether.
Politicians weighing in on money matters is a venerable bipartisan tradition, but Republicans and their pundits seem to have been at it more actively of late. Most notably, they argued that Barack Obama's 2009 stimulus plan would inevitably result in catastrophic inflation, destroying the value of financial assets like stocks and bonds.
The logical response? Load up on inflation-protected Treasury debt, in the form of the fixed income securities themselves, or some of the exchange-traded funds backed by these "TIPS", or Treasury inflation-protected securities.
And that would have been a costly error: either these securities have lost money outright or trailed most other asset classes since 2009. The Pimco 15+ Year US TIPS, just one of those ETFs, has lost nearly 7% so far this year alone.
An alternative would have been to bet against or shun Treasury bonds. But that would either have cost you a lot in losses or mean that you forfeited the chance to participate in a $1tn bond market rally. Sure, all bull markets end eventually, but since when has that been a reason to avoid joining a party? (Unless, that is, research convinces you that the party is already over.) Sitting sulkily on the sidelines and insisting that what you can see happening right under your nose isn't right, or shouldn't be happening, might be politically pure, but it's financially foolish.
Related: Hillary Clinton plans sweeping reforms to curb the 'abuses of Wall Street'
At least some of those who lost money outright were the politicians themselves. Eric Cantor, the former Republican congressman who was House majority leader, had shares in an exchange-traded fund that would have responded to any decline in the value of Treasury bonds by soaring, exponentially. (An additional twist to this tale is the fact that brief periods of profitability for Cantor's fellow investors arrived in 2011, when bond prices plunged amidst Congressional battling over raising the debt ceiling.)
But generally, Republican pundits have been pretty bad at suggesting where you should put your dollars. Gold, both Ron Paul and Rand Paul have suggested, should become the basis of US monetary policy once more. Many true self-described conservatives love investing in the precious metal. The problem is that it hasn't paid off for any of them and could be even less appealing in future, given interest rate trends.
Gold actually costs investors money to own. Not even the Paris terrorist attacks prompted a surge of enthusiasm for gold, now trading near its six-year lows.
Politicians can do other damage, even if they aren't making implicit suggestions about what you should or shouldn't be doing with your money.
For years, Republican rhetoric has sought to persuade Americans to vote against their financial interests. This draws on a long-standing social and political trends revealed in a Gallup poll a decade ago: while only 2% of respondents described themselves as "rich", 31% though it was at least somewhat likely they would become rich. And if you think you might be rich one day, why would you want to change a system that benefits the rich?
The figures may have changed, but not the attitude.
On top of that, there's a mismatch between what politicians say and what they do, revealed most tellingly in the case of Donald Trump. Days after he railed openly against the excessive wealth of hedge fund managers and their apparent ability to get away with murder, the Republican presidential frontrunner unveiled a tax plan that would give a third of the benefits of big tax cuts to the top 1% of Americans – those hedge fund managers included.
Democrats aren't immune. In the most recent debate, Bernie Sanders declared that the business model of Wall Street is fraud. If true, that would suggest that whenever a bank opens a checking account or processes an ATM transaction or issues you a plain vanilla fixed-rate mortgage, it's doing so with the intent to defraud you, and we should all avoid using a bank or financial institution, employing any of their products or services to protect ourselves.
Now, I'm not suggesting that Wall Street isn't out to make money from you – that's clearly the case. Neither would I argue that financial institutions don't look for ways to make excessive profits, and do so at the expense of those who can least afford to pay ever-higher fees for routine transactions. But that's a far cry from suggesting that they are sitting there doing nothing but figuring out ways to siphon money out of your account fraudulently.
OK, so exaggeration is key to political rhetoric; I understand. Having written about the financial crisis and delved far more deeply than I enjoyed into the murky waters of what makes Wall Street tick over the last two decades, I understand where Sanders is coming from. The years leading up to the financial crisis witnessed a lot of fraud; financial institutions have coughed up some $190bn and counting in fines.
For all those who suffered thanks to financial chicanery, that's cold comfort. Especially when they see JP Morgan Chase head honcho Jamie Dimon and Goldman Sachs CEO Lloyd Blankfein pocket compensation packages in the seven or eight figures year after year, and watch as even those most responsible – those on the front lines, the architects of the "liar loans" and those who marketed them to people who clearly couldn't afford them – get off scott-free, in contrast to the jail terms handed down to previous generations of banksters.
Related: Beware journalists bearing tips: you don't need supposed business insiders
But the existence of fraud within a system doesn't automatically mean that the system itself is fraudulent. And arguing that Wall Street is simply a fraudulent scheme allows us to avoid discussing the real issue: that sheer ineptitude and shoddy risk management, coupled – to a toxic extent – with the greed that always has run rampant in the world of finance not only was the key factor in determining the crisis but still exists today.
Nor does Sanders seem to behave in a way that completely reflects the implications of his sweeping statement. His own financial disclosure forms reveal that while he banks at a credit union rather than a big bank, he has two credit cards and has used Wall Street-provided or assisted products such as mortgages, a pension and (in the case of his wife) investment funds.
So don't respond to Sanders' dismissal of the financial system as nothing but a fraud by buying gold (yup, that again) and stashing it under your mattresses, in the belief that a savings account and 401(k) will be vulnerable to that fraud.
All of the Democratic presidential candidates propose reforming and overhauling Wall Street, and I'd be the first to cheer on any such initiatives. (Even though I know that in the case of bankers, if you build a 10ft regulatory or legal wall, some bright lawyer will construct a 12ft ladder to overcome that barrier on their behalf.) Here, too, though, it's worth looking past the rhetoric to examine what is really being suggested.
Reining in speculative activity on the part of big financial institutions, or speculation done in ways that could damage the integrity of financial markets, is crucial. But addressing this simply by slapping a fee on all stock market transactions – a popular proposal – will hurt mutual fund investors, not just hedge fund managers or high frequency traders.
We all know to be wary of politicians making lavish campaign promises. Let's add to that a degree of caution when it comes to their pronouncements about money matters.
Some, like Healey, clearly don't know what they are talking about. Others, like the Republican critics of the stimulus package (some of whom still can't admit that they might have been wrong and that inflation isn't lurking in a corner somewhere) are simply politically motivated. There's the risk of oversimplification, as politicians of all stripes reach out to their bases.
By all means, listen to what they say, but don't be that guy that turns into a gold bug overnight because Ron Paul and Glenn Beck told him to. That's just scary.
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Blogging can help you become an entrepreneur without enough resources. However, blogging is not just about writing stuff but it is a complete business that requires you to have a deeper understanding of a certain topic.
Can you take up blogging as a full-time job?
Yes, you can. And there are many who considered blogging as their full-time job.
But how are you going to start?
Find your specialty or nicheYou can write everything. Sure. But are you comfortable talking about it?
When it comes to blogging, the most important factor to consider is that you should be comfortable of what you are writing of.
Most of all, you must be passionate about it.
Choosing a broad topic is not enough.
You must know who your readers are and what issues you are going to discuss in your blog. If you think that it is not worth you reader's time, do not add that content.
Know the basics of content marketingThis is where most bloggers fail.
No matter how brilliant your content is if no one is reading is, it is still useless.
To be a successful blogger, you should know the basics of content marketing. I like reading the tips and tricks of Neil Patel on his blogs (Neilpatel.com and QuickSprout.com).
Moz and Buffer are also useful to find strategies about content marketing, SEO and growth hacks.
Learn how to monetize your blogMost bloggers would admit that they started a blog because they want to make money out of it.
Some bloggers do make a living out of blogging.
Take Perez Hilton, for example. He is earning up to $400,000 a month. He has been blogging since 2005. Even if his style of journalism is not your type, it is making him thousands of dollars.
But not all bloggers are earning a lot.
Before you even start to think about monetizing your blog, you should first focus on how to build a loyal audience.
When you have, say, 1,000,000 visitors a month, you should start thinking on how to monetize your blog.
In addition to Adsense, you can also earn money through affiliate marketing, selling items to your audience directly from your blog, writing sponsored posts, and so on and so forth.
And when you become an expert in your niche, people will visit your site to seek your guidance. From there, you can provide them consultation.
When you decide to take blogging as a full-time job, you must know that there are obstacles along the way. You will not find success in it overnight. It takes time to grow your blog and make money from it.
That said, before you even consider quitting your day job, make sure that you know what you are doing. You should always have a plan B in case it will not pan out.
To make blogging work, you need to put 100% of your time to it. If you are successful, you can earn more money from your blog than your current salary.
Share the joy
What Santa really wants: run (or cycle, or pull a sleigh) for half an hour every day in December. Photograph: yanzhonghua/Xinhua Press/Corbis
Picture this: it's the first of January, you've got a stinking hangover from last night's festivities and your jeans have gone from skinny to bursting-at-the-seams. You probably didn't need that third helping of turkey on Christmas Day, but what the hell, nothing exceeds like excess. Don't panic, you think. You'll simply dust off the trainers and start running again. Tomorrow. Definitely tomorrow. You're far too fragile today.
Sound familiar?
A few years ago this was Claudia and I. We loved running. Heck, we're even quite good at it, but there's no escaping the fact that December can be a difficult month to find time to exercise. Days get shorter and darker, our lives get busier and the weather can be plain awful. We would get to January, look at our training diaries and realise we had barely run in the previous month. Not the best preparation for a spring season of half and full marathons.
In an effort to "beat the bulge" and maintain some sort of fitness, we came up with the concept of AdventRunning. It had one simple rule. Run for 30 minutes a day, every day, between 1 and 25 December. It didn't matter how far or how fast. The idea was simply to find time in our hectic lives to do some exercise. And have fun doing so in the process.
In 2014, thanks in no small part to an article published in the Guardian, AdventRunning blew up. We went from a small collection of 50 friends to a group of 1,500. Overnight, our Facebook group became full of people posting photos of 30-minute runs against a backdrop of snow-capped mountain peaks, familiar grey cities and, nauseatingly for those in the UK, sun-drenched beaches in the southern hemisphere. At some point during the month, I recall a friend saying to me that AdventRunning had brought a welcome warm glow of positivity to his rather somber Facebook feed.
But better than all this, AdventRunning took on a life of its own and became a community. A runner would post on Facebook or Twitter that they were struggling to find the motivation to run, that they were too tired or too busy. The group would instantly rally behind him or her: this from people who had never met, in different parts of the world and who, in many cases, were new to running. Our hearts flowed over with pride.
As I sit here writing this article we're days away from this year's launch. Some things have changed but all the best bits of AdventRunning remain. While it was originally a run-based challenged, we have broadened the scope. We love running and it's hugely accessible – you can do it anywhere and all you really need is a pair of sneakers – but it can be hard on the body and it's not for everyone. So for 2015, we simply want people to be active. Running, cycling, spin classes, yoga or swimming. Mix them up if you want. At the end of the day, being active is more important than the activity.
The strong sense of community is also still there; in fact, its bigger and better than before. The challenge is primarily supported on social media, but there is also a range of running events for those based in London. Details can be found on Facebook and our website, but we're excited to be partnering with community-minded brands such as Pact Coffee, Like the Wind Magazine, The North Face and the independent running retailer The Running Works. As ever, events will be free, social and suitable for all paces and availabilities.
To encourage people to stick with it for the duration of the challenge, we will continue to award a daily spot prize for the best photo, video or blog of each day's activity. The icing on the Christmas cake is the fact that, on Christmas Day, we will be giving away a "money can't buy" place at the Virgin Money London Marathon (plus training kit) courtesy of long time supporter Adidas.
So how do you get involved? Well, that's easy. We're on all the usual social media channels. We're also on Strava, if that's your thing. At the end of the day, how often you exercise and how you record it is up to you. A scrap of paper on the fridge works for us. What is more important is challenging yourself to be more active next month. Why not join us and begin 2016 on the front foot for a change?
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Bitcoin (virtual currency) coins are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015. (REUTERS/Benoit Tessier ) Just days after the hacker group Nameless pledged to seek out Islamic State members & launch cyberattacks against their accounts, a separate group of techies claims it has identified a key funding avenue for the fear network – bitcoin accounts. Ghost Safety Group, a collective of pc "hacktivists," states it has located several bitcoin accounts in that ISIS makes use of to fund operations. One account contained $three million value of bitcoin, a GhostSec member told Michael K. Smith II, a co-founder of Kronos Advisory, a national safety advisory firm. GhostSec "wants to make an impact in counterterrorism," Smith stated, in addition to in that the GhostSec member reached out to him 'cause authorities officers weren't paying close attention to the allegations. Associated: Has Nameless's war against ISIS been doi ng more injure than good? Smith stated U.S. …
Read more on this matter…ISIS parks its cash in Bitcoin, experts say
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Philanthropists Are Not Asking Financial Advisors For Advice
Philanthropists are more likely to ask their peers for advice about their charitable donations than their financial advisor, according to a new survey from Foundation Source. The survey of 167 philanthropists, most of which have private foundations of less than $50 million in assets, found that 34.7 percent rely on the advice of their peers or are more likely to not ask for advice than seek professional counsel. Just 11.9 percent seek out a financial advisor for advice, the survey shows. In addition, 65.1 percent said they don't need advice from a financial advisor, while 18.1 percent said the thought of seeking help from an advisor didn't occur to them and 8.4 percent said they wouldn't be confident in an advisor's advice. However, of the 41.3 percent who did consult with an advisor, 80 percent were confident with the advice, accountingweb reported.
Musicians to Bank on
Memorabilia from your favorite band may actually be worth something if you know which acts are the best bets. MarketWatch, using data from JustCollecting.com, rounded up which artists to invest in today based on the expected value of their memorabilia by 2035. The list included oldies like the Beatles, the Rolling Stones, Elvis Presley, Michael Jackson, Jimi Hendrix and Bob Dylan, as well as some newer acts like Led Zeppelin, Nirvana, Sex Pistols and Madonna. In fact, Madonna's autograph has already almost tripled in value, from almost $400 in 2000 to $1,060 in 2015, according to the autograph index. Serious collectors can buy some Beatles memorabilia next month when drummer Ringo Starr and his wife put more than 1,000 items up for auction.
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By Kathleen Burns Kingsbury
A new study conducted by the Family Wealth Advisory Council found that more than 70% of female breadwinners want their advisers to help them communicate with their partners as part of their wealth management engagement. The reason is that being a woman and the main earner in the family can make life complicated. Simple financial matters, ranging from who picks up the check at dinner to whose career aspirations come first, are called into question.
(More: Check out IN's inaugural Women to Watch list)
Historically, couples would rely on gender roles to find answers, but modern couples make up the rules as they go along. Having a safe place to discuss these matters is attractive to these women who often don't know where to turn for help.
As a female-friendly adviser, this is an important service to provide. It will differentiate you from the competition and solidify the relationship with both partners. To ensure success, consider these helpful tips:
1. Examine your adviser couple mindset.
To be effective facilitating these conversations, you need to be aware of your automatic thoughts and beliefs about how couples should make, manage and invest money. This is called the "adviser couple mindset."
By identifying these attitudes, you become aware of your strengths and potential challenges in helping female breadwinners and their partners discuss money matters. For example, an adviser with the mindset that a stay-at-home dad is weak based on his decision to be a caretaker may unconsciously align with the female breadwinner and be unable to maintain the position of neutrality needed to help the couple resolve their differences. However, if this same adviser is aware of this blind spot, he can make sure he gives each partner an adequate opportunity to voice their concerns and help them find a solution that is respectful and equitable.
2. Role model active listening.
Not listening to your partner is one of the biggest roadblocks to effective money talk. In these meetings, ask each partner open-ended questions and spend more time listening to their responses than talking. When differences of opinion arise, act as a mediator and translate each partner's position, without taking sides. Remind your clients to listen to each other with the goal of understanding their partner, not winning the fight. Show your clients through your actions what good communication skills look like.
3. Make wealth conversations fun.
Use creative tools such as a deck of money mindset cards, money-o-gram exercises (a family tree highlighting generational messages about wealth) or money history questionnaires. For years psychologists have used these techniques to aid clients when discussing uncomfortable topics. Given the money taboo in our society, many couples may be apprehensive at first. By using games and coaching exercises, you bring a lightheartedness to the experience that is beneficial. Besides, a hardworking woman deserves a little fun given the pressures of her day-to-day life.
Kathleen Burns Kingsbury is a wealth psychology expert, founder of KBK Wealth Connection and author of several books, including "How to Give Financial Advice to Couples" (McGraw-Hill Education, 2013).
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Today we look at the player considered by most to be the prize free agent in this year's crop:
Jason Heyward
Position: Right fielder
Bats: L
Throws: L
2015 numbers: $7.8 million salary, .293-13-60, .797 OPS, 6.5 WAR (Baseball-Reference)
Opening Day age: 26
A highlight-reel defender, above-average hitter and basepath threat, Jason Heyward is the best all-around player in this year's group of free agents. Steve Mitchell/USA TODAY SportsPROS: Not the most spectacular offensively -- but almost certainly the best all-around player in this year's group -- Heyward is ranked No. 1 among free agents by ESPN's panel of baseball experts, among others. A highlight-reel defender, above-average hitter and a basepath threat -- 43 stolen bases in 50 attempts over the past two seasons -- Heyward is the type of free agent the Yankees would have been all-in on in what some consider the Good Old Days (i.e., When The Boss was Alive). He sports a low strikeout percentage for an outfielder, decent walk percentage and his OBP (.359) was higher than any of the Yankees' three starting outfielders in 2015. Like all left-handed hitters, his subpar power numbers will benefit from the short r ight-field porch at Yankee Stadium. And best of all, he won't hit his 27th birthday until next August.
CONS: He probably will command Robinson Cano/A-Rod-type numbers, and he will probably demand an opt-out. The Yankees have to decide if a player who has averaged 16 home runs a year -- his high was 27 in 2012 -- is worth upward of $200 million. And, like Justin Upton and Yoenis Cespedes, the other elite outfielders on the market, it means moving a current outfielder -- in this case, either Brett Gardner or Jacoby Ellsbury -- to free up money and a spot on the field for him. Heyward is probably too big to be a center fielder, and his prodigious defensive abilities could be nullified by Yankee Stadium's mini right field, but he has never played left.
THE VERDICT: Heyward is a tough one to pass up, and if this were 10 years ago, there would be no question he would be a Yankee in 2016. But this is a different era and different ownership, even if the name remains the same. It seems Hal's Yankees are more likely to aim slightly lower, or even sit out the outfield sweepstakes and wait a few years for the rest of their big contracts to expire -- and for someone like Mike Trout to hit the market. A reluctant pass.
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A: You've got lots of options for interesting holiday gifts.
One option is to give their retirement planning a boost by opening an IRA or Roth IRA for them.
"You can put up to $5,500 a year into an IRA or Roth IRA as long as they have the earned income of that amount," said Brian Power, a certified financial planner with Gateway Advisory in Westfield, N.J. "These accounts are not meant to be accessed until after the age of 59½ and would be a wonderful way to start them saving toward retirement."
You didn't say how old your children are or if you're a grandparent yet, but you could open a 529 plan in your grandchildren's names.
"This is a very tax-efficient college savings account that would help them with the future burden of funding their child's college education," Power said.
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You can also open a Roth IRA for your grandchildren.
If you want to be sure they use any gifts to pay down debt, you shouldn't write a check to your kids. [Editor's Note: Paying down debt could also be giving them the added gift of a better credit score if they're missing payments or have a high credit utilization that's dragging down their scores. You can see how these factors are impacting your credit scores for free on Credit.com.]
Instead, write the check directly to their credit card company or student loans, Power said.
With any of these gifts, you must keep in mind that if the gift is more than $14,000 in a calendar year, it must be reported to the federal government so they are made aware of it and can track larger gifts, Power said. Be sure to speak to your accountant if the gift will be larger than $14,000.
You may also want to consider getting them, as a gift, a sit-down with a financial planner. The adviser can help to set your kids on a smart path to build wealth over their lifetimes.
More Money-Saving Reads:Image: iStock
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