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January 19, 2021

NapkinFinance-ActiveVsIndexInvesting-Napkin-01-14-21-v03A

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A 529 plan is a tax-advantaged college savings acc A 529 plan is a tax-advantaged college savings account sponsored by a state government or education institution. The plans are kind of like 401(k)s for college funds. (The name comes from the section of the tax code that authorizes the accounts.) There are two types of 529 plans: ➡️ Savings plans, which let you build up assets that you can use toward almost any U.S. college. ➡️ Prepaid tuition plans, which can let parents pay today’s tuition rates for a child’s future education (but may limit where a child can go to school). Not surprisingly, the more flexible savings plans tend to be more popular. 529s can offer several significant advantages, including: ✅ Tax breaks—Your money can grow tax free in a 529 account and be withdrawn tax free as long as you use funds for qualifying expenses. Depending on which state’s plan you choose and what state you live in, you may also get a state tax deduction on contributions. ✅ Potential growth—You typically have a number of investment options to choose from in a 529 plan, so your money can grow. ✅ No restrictions on who can contribute—Grandma’s birthday check can go straight into the 529. ✅ Few restrictions on eligibility—Even high-income families can use the plans. ✅ Flexibility—You can invest in any state’s 529 program. And funds from any state’s plan can be used at any of more than 6,000 schools. ✅ Ability to change beneficiary—If a child (or other beneficiary) doesn’t end up going to college, you can change the beneficiary to anyone else (including yourself). Do you have a 529 or have personal experience with them? Share below!
An NFT, or non-fungible token, is a code that says An NFT, or non-fungible token, is a code that says you own a unique digital item. They first hit the market around 2015, but their popularity has recently exploded. To understand NFTs, it’s important to first know the difference between fungible and non-fungible things: ➡️Fungible: You can easily count and interchange it. For example, you can trade two $5 bills for one $10 bill and end up with the same amount of money. ➡️Non-fungible: Completely unique and isn’t interchangeable. Anyone can download and frame a picture of the Mona Lisa, but there’s only one original painting. The unique nature of an NFT—and the scarcity that comes with it—is part of what makes them so popular (and expensive). Many experts believe that in the future we could use NFTs for almost anything, from event tickets to passports. That’s because it’s really easy to verify ownership on the blockchain and really hard to forge or change the owner (without their permission). Swipe up in today's stories to learn more about NFTs, like how to buy + sell them and more.
Though the term sounds pretty gross (and like some Though the term sounds pretty gross (and like something you reach when you eat too many nachos), this term actually refers to the point when an investor sells their asset, even at a loss, because they can’t stomach its falling value anymore. These assets could be stocks, bonds, real estate, etc. Have you ever reached your own "puke point" before? Share with us below!
Have you ever done a balance transfer? Balance tra Have you ever done a balance transfer? Balance transfers are a way to move what you owe on one (or more) credit cards and loans onto another credit card. It’s a strategy people usually use to take advantage of a low interest rate on a new card—typically so that they can save on interest and pay off their balances faster. People typically use balance transfers for two main reasons: 1. To save on interest — Balance transfer cards may offer promotional interest rates (of as low as 0%) for a set introductory period. If you have high interest rate credit cards or loans, shifting them could help you save money while you pay them off or even pay them off faster. 2. To consolidate accounts — It’s complicated to keep track of multiple accounts, multiple bills and multiple due dates. By moving the balances of multiple credit cards or loans to a single account, you only have to deal with one monthly payment. Do you think this might be something right for you? Swipe up in today's stories to learn a few top things to consider before you take the leap, as well as a detailed breakdown of the process and more.
The truth? If you don’t borrow more than you can The truth? If you don’t borrow more than you can afford and stick with low-interest debt, it can actually help you achieve your goals. Whether a debt is considered “good” or “bad” generally depends on the interest rate and whether you’re taking on the debt in order to make a smart investment. Just be careful, because debt can pile on quickly - particularly if it’s racking up interest at a high rate. Share your experience with debt below, and if taking it on to achieve a financial goal has been a smart decision for you!
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