Day: October 29, 2020

Personal Finance Daily: Mortgage rates hover near record lows and ‘consumer harm’ could happen when government starts collecting student loan payments again

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Hi there, MarketWatchers. Don’t miss these top stories:

Personal Finance
‘It is now a full-blown depression for domestic workers.’ Nannies, house cleaners and home-care workers continue to struggle even as other job sectors bounce back

Meanwhile, some highly-educated nannies are finding work for families dealing with remote schooling.

I offered my son $30K for a down payment on a home. His fiancée wants a written agreement for my gift to be split 50/50

‘My son had already agreed that any house they buy would be split 50/50 in case they divorced. She is still paying off student debt and has little savings.’

I filed for bankruptcy after rehabbing my husband’s home. Now he wants an open marriage and says I own nothing. I feel trapped and bamboozled

‘I don’t pay bills, which has left me pondering the idea of just staying with him out of convenience — but at what cost to me mentally?’

‘Consumer harm’ could happen when government starts collecting student loan payments again, CFPB warns

Student-loan borrowers have been allowed to pause payments during the pandemic, but they’ll have to start again on Jan. 1, 2021.

Mortgage rates hover near record lows — fueling higher home prices

‘The results of next week’s federal election could certainly impact market activity,’ said one economist.

The weird pandemic trend that’s sticking: home cooks are switching to alternative flours

Demand for alternative flours such as sweet potato, banana, almond and corn has grown during the pandemic. Some consumers appear to be making a more permanent switch to them.

See inside New Orleans Saints QB Drew Brees’ $2.05 million Kauai home

New Orleans Saints quarterback Drew Brees is looking to pass his townhome in Princeville, HI, to a buyer for $2.05 million.

My parents gave my brothers and me $8 million in bonds, stocks and ETFs. I’d like to use my profit to travel. My parents refuse

‘I’m a 36-year-old man with no plans on having children, and I’d like to be able to use this very small amount to pursue one of my passions in life.’

As pending home sales fall in September, concerns emerge about a housing rebound

Contract-signing activity dipped across most of the country last month, suggesting that buyers aren’t having an easy time making a deal.

‘I cannot express how little I care that you hate the photos’ — Chrissy Teigen speaks out for first time since miscarriage

Pregnancy loss takes a huge emotional and financial toll — which many people still don’t talk about. Teigen is breaking that silence.

Elsewhere on MarketWatch
Prospects for post-election fiscal stimulus package brighter amid softer Washington talk

The Senate returns to Washington the week after next and the House a week later. A coronavirus relief package may not be far behind, if House Speaker Nancy Pelosi and President Donald Trump are to be believed.

Record 33% GDP surge still leaves the U.S. economy in a world of hurt

The U.S. economy is still in a deep ditch even after a record-shattering 33% burst of growth during the summer. Nearly $700 billion in economic activity is missing and it’s not coming back soon.

The popularity of old-school hobbies skyrocketed in quarantine, boosting this stock 25% Thursday

Shares in Hornby, a small cap British toy company that can trace its roots back to 1901 in Liverpool, surged more than 25%, after half-year earnings revealed how the popularity of modeling hobbies skyrocketed during the brunt of the coronavirus pandemic.

The pandemic has sent people flocking to Pinterest and Snap, which could be a bad sign for Facebook

Pinterest Inc. is seeing a boom in new users as shut-in DIYers looked for new home improvement projects during the pandemic, and its revenue benefitted from a boycott by many large advertisers of Facebook.

The First Crypto Currency Auto Finance Company in the U.S.

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Crypto Cars Online

Available now with Crypto Cars Online

Dallas/Fort Worth, Texas— October 26, 2020 — Crypto Cars Online announced immediate availability of purchasing vehicles with crypto currency, after partnering with top rated auto dealers in the Dallas Fort Worth area.

“Our system is simple when you buy a car with Crypto Currency,” said Spokesman Roger Lee, Managing Partner of dr2marketing and head of media relations for Crypto Cars Online.

How It Works

Purchase your vehicle online with multiple crypto currency options including, Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and USD Coin. Crypto Cars Online recently committed to deploying a single payment processor, enabling customers to shop all makes and models of vehicles with crypto currency.

“Once you find your car, you will be able to proceed to checkout and complete your purchase via our payment processor. We will handle the payment at the car dealer and clarify all needed paperwork for you,” said Spokesman Roger Lee, head of media relations for Crypto Cars Online.

Availability

Crypto Cars Online, is a service driven by customer feedback and is part of Crypto Cars Online’s commitment to deliver the latest vehicle options with one convenient payment processor.  Purchase is available immediately at www.cryptocarsonline.com and Crypto Cars Online can assist with vehicle delivery anywhere in the world.

Founded in 2020, Crypto Cars Online is the first Crypto Currency Auto Finance company in the United States. The company offers a wide range of vehicles and services designed to make purchasing vehicles with crypto currency simple.

###

Crypto Cars Online is a registered trademarks or trademarks of Crypto Cars Online in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

For more information:

info@cryptocarsonline.com

For more information on inventory:

Please visit www.cryptocarsonline.com

Featured image: DepositPhotos © VitalikRadko

Please See Disclaimer

Outside the Box: Trying to find the most tax-friendly place to retire?

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One of my favorite things to do is sit on our local beach with a cold beverage on a beautiful day, and talk finance with interested friends and family members. This past Labor Day weekend, I did just that with a soon-to-be retiree.

One of the big issues facing him and his wife: where to live. He had been relocated to New York by his employer. But he and his wife are natives of the Philadelphia region, and they want to return to the area to be closer to friends and family.

As often happens when retirees and near-retirees talk, the subject of taxes in retirement came up. They’re considering Pennsylvania, New Jersey and Delaware for their retirement years. My wife and I are wrestling with the same issue.

Check out MarketWatch’s Where Should I Retire? tool

Fortunately, there’s extensive information on the internet. Thirty-seven states and the District of Columbia don’t tax Social Security. But many of these states tax other forms of retirement income. Kiplinger has a good site that provides a detailed state-by-state explanation of the taxes that retirees face, grading each state on its tax-friendliness.

Read: There is more to picking a place to retire than low taxes — avoid these 5 expensive mistakes

I analyzed locations in the three states that my friends are considering. Specifically, I looked at: Lewes, Del.; Ocean City, N.J.; and Blue Bell, Pa. I assumed annual income of $145,000, comprised of a $60,000 pension, $45,000 in Social Security and $40,000 of retirement account withdrawals. I also assumed a married couple filing a joint return. Here’s what I found:

1. Real estate. I compared the property taxes for a $500,000 home in the three locations. I used real estate listings and public records to compare similar-sized homes. Delaware was the clear winner at $1,700. Ocean City and Blue Bell were almost the same at $4,900 and $4,600, respectively.

2. Social Security. None of the three states tax Social Security.

3. Pension and retirement income. Delaware taxes income from pensions and retirement accounts, but provides a deduction of $12,500 for those age 60 and older. The deduction is $2,000 if you’re under 60. Tax rates can be as high as 6.6%. This highest rate kicks in on taxable income above $60,000.

New Jersey is a little complicated. The state taxes income from pensions and retirement account withdrawals, but provides a special pension exclusion for those 62 and older who fall below a certain income threshold. In 2020, filers meeting the age requirement, and who have total annual income of $100,000 or less, can exclude retirement income of up to $75,000 (single filers) or $100,000 (joint filers). Above $100,000, the exclusion disappears entirely. Tax rates range from 1.4% to 10.75%.

Meanwhile, Pennsylvania doesn’t tax either pensions or withdrawals from IRA and 401(k) accounts.

4. Sales tax. Delaware is famous for having no sales tax. Many nearby nonresidents take advantage by making large purchases there. Pennsylvania’s statewide rate is 6%, but there are exemptions for products such as clothing, groceries, prescription drugs and residential fuels.

The New Jersey statewide rate is 6.625%. Again, there are exemptions for items that are especially important to seniors. Medicine (prescription and nonprescription), groceries and many types of clothing are exempt from New Jersey’s sales tax.

5. Capital gains. Delaware, New Jersey and Pennsylvania tax short- and long-term capital gains as regular income.

6. Estates. Delaware repealed its estate tax in 2018. New Jersey has an inheritance tax. Bequests to non-relatives, siblings and distant relatives are taxed at rates ranging from 11% to 16%, with the first $25,000 exempt.

Pennsylvania also has an inheritance tax. The inheritance tax rate varies depending on the relationship of the inheritor to the decedent. The tax is 0% for spouses, 4.5% for direct descendants like children and grandchildren, 12% for siblings and 15% for everybody else.

The table below summarizes the scenario I evaluated. Delaware is a modest winner once sales taxes are factored in. If we assume that $40,000 of the $145,000 income is spent on taxable items, it adds another $2,600 or so to the New Jersey and Pennsylvania tax bill. The upshot: A retiree who lives in Ocean City, N.J., would pay about $2,000 more in taxes than a similar retiree in Lewes, Del. That’s not necessarily a game changer, but certainly something to consider.

Tax Lewes, Del. Ocean City, N.J. Blue Bell, Pa.
Federal $16,764 $16,764 $16,764
State $4,330 $252 $0
Income tax $21,094 $17,016 $16,764
Property tax $1,700 $4,900 $4,600
Sales tax rate 0% 6.63% 6%
Sales tax on $40k $0 $2,650 $2,400
Total tax $22,794 $24,566 $23,764
Inheritance tax No Yes Yes

One important factor not captured in this analysis: the cost of housing. I used $500,000 as the assessed value, but that can buy very different homes in the three locations. Also, depending on the age of the house, the assessed value for tax purposes could be much lower than the market value.

A final caveat: It’s critical to understand the New Jersey hard limit of $100,000 in total income to get the retirement income exclusion. An additional $1,000 of income raises the New Jersey state tax from $252 to $2,746.

Richard Connor is a semiretired aerospace engineer with a keen interest in finance. His previous articles include Paradise Lost, Much Appreciated and Victims of the Virus. Follow Rick on Twitter @RConnor609.

This column first appeared on Humble Dollar. It was republished with permission.

Mark Hulbert: The asset class you probably haven’t even considered

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Would you be interested in an asset class that’s not bonds, but safer than stocks, and yields 4.7%?

Of course you would.

Strangely, though, this class gets very little attention from many retirement financial advisers, and few retirees even guess what it is when I describe it to them. I struggled defining a web search that came up with more than a handful of articles per year about this asset class.

I’m referring to preferred stocks, which lie between stocks and bonds on the risk spectrum. They are called “preferred” because, in a bankruptcy proceeding, they are senior to the issuing company’s common stock. Their claim on the issuer’s assets is junior to bondholders’, however.

Preferreds are hybrid securities, neither fish nor fowl. On the one hand, they are more like stocks than bonds in that the company is not legally obligated to pay its dividend. But, on the other hand, they are more like bonds than stocks in that their dividends are usually expressed as an interest rate rather than a set dollar amount. So, like bonds, preferreds typically trade inversely to interest rates—rising when rates fall, and vice versa.

To complicate things further, preferreds come in many different flavors:

• One variety is the “cumulative” preferred. In this event and the issuer is unable to pay a dividend, unpaid amounts accumulate and are owed to the shareholder before any dividends get paid to common shareholders. Other things being equal, a cumulative preferred is safer than a preferred without this feature.

• A “convertible” preferred means that it can be converted into a certain number of shares of common stock. Depending on their relative prices, the convertible will sometimes trade in tandem with the common and at others times in tandem with the issuing company’s bonds. This feature gives the preferred an upside potential that a nonconvertible preferred does not have.

• Some convertibles are “callable” by the issuing company at a preset price. It often does so when interest rates fall, since by doing so the firm can substitute a lower yielding preferred. Notice that this call feature eliminates much of the upside potential a preferred otherwise would enjoy.

Given these intricacies, you might wonder if preferreds even deserve to be called a single asset class. It’s a fair question, and one I won’t try to answer. But I will note that, within the “equities” and “fixed income” asset classes, there is just as much variation and complexity as there is within the preferred category (if not more).

Regardless, this discussion shows that the devil is in the details. If you’re interested, by all means do your homework.

But how have they performed?

The $64,000 question, of course, is how have preferreds actually performed. The accompanying chart answers this question with regard to the S&P U.S. Preferred Stock Index, which S&P Dow Jones Indices describes as “an investible benchmark representing the U.S. preferred stock market.”

This index’s inception was September 2003, and the chart plots this index’s total return since then, along with those of the S&P 500 and the iShares Core U.S. Aggregate Bond ETF AGG, -0.02%. Consistent with preferreds being riskier than bonds but list risky than stocks, this index has outperformed the iShares Core U.S. Aggregate Bond ETF but underperformed the S&P 500 SPX, +0.77%.

Upon digging deeper into the data, however, preferred stocks’ performance is less than it seems. For example, when judged by the volatility of returns, the S&P U.S. Preferred Stock Index has been riskier than the S&P 500—10% more, in fact. Since in theory preferred stocks are safer than stocks, it wasn’t supposed to turn out this way. It’s a losing combination to be riskier than the S&P 500 while also producing an inferior return.

Preferred stocks also failed to provide downside protection during the last two major stock market declines, as you can see in the following table.

Total return between October 2007 stock market high and March 2009 low Total return between February 2020 stock market high and March 2020 low
S&P 500 -55.3% -33.8%
S&P U.S. Preferred Stock Index -65.3% -31.0%
iShares Core U.S. Aggregate Bond ETF +7.4% -1.3%

Preferreds’ future

If all you had to go on were these data, then no one would give preferreds a second thought. There are several reasons to nevertheless do so.

One is that there is the distinct possibility that the markets will behave in significantly different ways over the next several years. For one thing, interest rates are unlikely to decline as much as they did over the last couple of decades. On the contrary, the consensus bet is that rates will remain low for the foreseeable future.

It’s furthermore unlikely that the stock market will produce future returns anywhere as close to what they have over the last decade. Equity valuations are already in the overvaluation zone, and stocks won’t be able to count on lower interest rates to support their sky-high valuations.

In such a scenario, preferreds begin to look more attractive. The current yield of the S&P U.S. Preferred Stock index is 4.73%, for example. And, because interest rates are unlikely to decline very much from current levels, it’s unlikely that callable preferreds would be called away. Locking in a nearly-five-percent yield is not a bad prospect.

Exchange-traded funds are the preferred way of getting access to the preferred stock asset class, since they provide instant diversification. The list below shows the five preferred-stock ETFs with the most assets under management:

• iShares Preferred and Income Securities ETF PFF, +0.65%. SEC yield 5.39%

• Invesco Preferred ETF PGX, +0.47%. SEC yield 5.06%.

• First Trust Preferred Securities and Income ETF FPE, +0.07%. SEC yield 5.04%.

• Invesco Financial Preferred ETF PGF, +0.64%. SEC yield 4.87%.

• SPDR Wells Fargo Preferred Stock ETF PSK, +0.41%. SEC yield 4.58%.

But, to repeat the caution from above, the devil is in the details. So by all means discuss the various possibilities with your financial adviser.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com.

The Moneyist: I filed for bankruptcy after rehabbing my husband’s home. Now he wants an open marriage and says I own nothing. I feel trapped and bamboozled

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Dear Moneyist,

I have been with my partner for 5 years and married for 1 year. I left my apartment, threw away all my furniture and moved into their home they own from an inheritance. I racked up debt from helping to rehabilitate the home so we could be comfortable. During the pandemic, my spouse and I decided to file a Chapter 7 so we could start over fresh and do things differently.

Once the bankruptcies were done, my spouse asked me for an open marriage! I was taken back and shocked. I declined and asked for a divorce. Here is where the problem comes in. I have no savings, no furniture and no place to move. During recent arguments, he told me he owned the house 15 years prior to marrying me and, therefore, I have no claim to it.

The Moneyist:I offered my son $30K for a down payment on a home. His fiancée wants a written agreement for my gift to be split 50/50

I asked for the furniture and TV, which I bought on my credit card, and he told me it’s not mine, and I didn’t pay for it anyway because I filed for bankruptcy. I paid for his car and my truck. Now he says he doesn’t want the car. I can’t afford to keep paying for both.

Can I force him to pay for the car even if the loan is in my name? Do I have to file for divorce and let the courts decide on the material things versus me just moving and taking it anyway? Right now, I’m still in the home until I save enough money to get my own place, and I have to help pay the taxes on his home.

I feel trapped and bamboozled. What should I do? I don’t pay bills, which has left me pondering the idea of just staying with him out of convenience, but at what cost to me mentally?

Blindsided by love

Dear Blindsided,

I’m not sure what’s worse: To cheat or, after you say “I do,” to essentially give you notice that he intends to sleep with other people. Human beings, like the stock market, are notoriously unpredictable. They surprise you with flowers one day, and they pull the rug from under your feet the next. I’ve stopped trying to figure other people out. But I do know this: People’s actions, when you have behaved consistently and honorably, almost always have nothing, zero, zilch to do with you.

That frees you up to consider your next steps. To that end, I’m stuck on the word “rehab.” If you paid money toward the mortgage or financially helped to renovate the house itself, it’s likely that the property moved from being separate property to marital property. Similarly, paying property taxes can have the same effect. If you merely fitted out your home with “all mod cons” you will in all probability take what you brought into this marriage with you when you leave.

Ultimately, taking on debt was your decision. You, not your spouse, are personally accountable for that. If your name is on the loan for the car, you are responsible for it. The contract is between you and the lender. In the game of rock-paper-scissors, divorce decrees do not supersede loan contracts. In some states, debts acquired during the marriage are considered marital property and a court may take that total figure into account when dividing your assets.

The Moneyist:My parents gave my brothers and me $8 million in bonds, stocks and ETFs. I’d like to use my profit to travel. My parents refuse

I caution against moving out and taking items. Ashley Wood, an attorney at Barton Wood in Salt Lake City, Utah, said people don’t give up their legal right to a marital home by moving out. “That said, courts are generally inclined to preserve the status quo in divorce cases. So if you want to live in your marital home, but you move out during the divorce, it’s somewhat less likely that the court will turn your spouse out of the home and reinstall you there.”

There is obviously a trade off between your mental and financial health. “Legally, your spouse can’t force you to move out of the house in most cases — nor can you force them to move out,” Wood adds. “This is especially true if your spouse was the one who filed for divorce in the first place. If your spouse does ask you, or try to force you to leave, you should assume things are going to deteriorate quickly.” In the meantime, seek legal aid and document everything.

Don’t make any hasty decisions. If you can save money, and prepare your exit plan while remaining in your current home, do that. If there was any threat to your physical safety, that would be a horse of a different color. But from what you have told me, your husband has a clear idea of how he would like to live his life with or without you, and you should start making plans for your future too. Pandemic or no pandemic, it’s best to do that with a roof over your head.

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com

Hello there, MarketWatchers. Check outthe Moneyist private Facebook FB, -5.51%  group where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

NerdWallet: What is the S&P 500 and how do I invest in it?

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This article is reprinted by permission from NerdWallet.

For those would-be investors wanting to jump into the stock market but wondering which stock to buy, legendary investor Warren Buffett has a suggestion: Try buying 500 stocks instead.

“In my view, for most people, the best thing to do is own the S&P 500 index fund,” Buffett said at Berkshire Hathaway’s annual meeting in May. But what is the S&P 500 SPX, -3.52%  , and how do you invest in one of its funds?

Here’s an intro to how S&P 500 funds work, and whether one might be a good fit for your portfolio.

What is the S&P 500?

The S&P 500, or S&P, is a stock market index comprising shares of 500 large, industry-leading U.S. companies. It is widely followed and often considered a proxy for the overall health of the U.S. stock market.

Standard & Poor’s, an American investment information service, created the index in 1957. Every quarter, its investment committee meets to review which stocks belong in the index based on each company’s market size, liquidity and group representation. Today, 505 stocks constitute the index, since some of the 500 companies have more than one class of shares.

Contrary to popular belief, the stocks forming the index are not the 500 biggest U.S. companies, but they are arguably the 500 most important companies. Over $11.2 trillion is invested through the index, with these 505 stocks representing about 80% of the total U.S. stock market’s value.

You might like: Invest simple with lazy portfolios

The S&P 500 is a cap-weighted index, meaning each stock within the index is weighted according to its market capitalization, or total market value (number of shares outstanding multiplied by current market price). The larger the company, the greater its influence on the index.

As of Oct. 22, 2020, these are the top 10 companies by index weight in the S&P 500:

How do you invest in the S&P 500?

An index is a measure of its underlying stocks’ performance, so you cannot directly invest in the index itself. Buying every company’s shares would be an arduous task (think 505 separate transactions), but thankfully there are index funds and exchange-traded funds, or ETFs, that replicate the index, effectively doing that work for you.

While all S&P 500 funds track the holdings of this index, an investor must consider whether using an index fund (a passively managed mutual fund) or an ETF makes the most sense for them. The good news when weighing index funds versus ETFs is that there are solid S&P 500 options in each category, and all of these products leverage the diversity of the index itself.

Learn more: How to get started buying stocks

Because the S&P 500 is weighted by each company’s market capitalization, the larger companies in the index can sometimes have an outsize impact on the performance of the larger index. In other words, a big dip in price for Apple shares can create a dip in the index as a whole. Because of this, some investors prefer to purchase the S&P 500 in an equal-weighted format, so that each company has the same impact on the index. This is meant to create an index that is more representative of the overall U.S. market.

After deciding your preference for an index fund or ETF, cap-weighted or equal-weighted, you can begin narrowing down which S&P 500 fund to purchase. To minimize your costs, look into each fund’s expense ratio — the percentage of your assets you’ll pay in fees each year — to see how they compare.

Fees are important here since all of these funds track the same index, which means their returns should be roughly the same. The lower the fee, the more of that return you keep.

Should you invest in the S&P 500?

There are a number of things to think about before you choose any investment. But an S&P fund can generally be a good choice if you want to add broad exposure to the U.S. stock market to your portfolio.

Learn more: Mutual funds— Everything you need to know

“The S&P 500 is a key part of a diversified investing strategy because it’s a good bet that the U.S. economy will continue to succeed and grow in the long term,” says Tony Molina, senior product manager at Wealthfront. The U.S. has the largest economy and stock market in the world, and is one of the most resilient and active, especially when it comes to innovation. That’s why it’s a no-brainer to include the S&P 500 as part of your portfolio.”

Larger companies are generally more stable to invest in because they are well-established and widely followed. Thus, these stocks usually have less risk and lower volatility. The S&P 500 combines large companies across various industries, so investors access a broad, diversified mix of companies when investing in it.

Choosing an index fund or ETF can also help investors avoid — or at least minimize — the behavioral pitfalls from stock picking, which is a losing strategy, says Dejan Ilijevski, president of Sabela Capital Markets.

Ilijevski cites the May 2018 study by professor Hendrik Bessembinder at Arizona State University, which examined investments in publicly traded U.S. stocks between 1926 and 2016 and found that just over 4% of the companies accounted for the total wealth created.

“Picking those few individual winners is impossible,” Ilijevski says. “Your best bet is to own as much of the market with a fund that tracks the index.”

Using index funds and ETFs can help investors generate strong returns while also minimizing their costs, says Kevin Koehler, chartered financial analyst and director of the investment strategy group at Miracle Mile Advisors in Los Angeles.

“Investing in the S&P 500 the past 25 years would have given an investor over a 10% annualized return, proving that an investor does not need to be paying high expenses to get good market returns,” Koehler says.

Are there drawbacks to investing in the S&P 500?

There are caveats to consider. The S&P 500 consists of only large-cap U.S. stocks. Portfolio diversification encompasses buying mid- and small-cap companies along with large-caps; allocating funds to international companies along with domestic ones; and including bonds, cash and potentially other asset classes with stocks.

Read: Do cash management accounts keep my money safe?

Koehler also notes drawbacks in the S&P 500 related to its market-cap weighting.

“As passive investing increases, investors are continually investing in S&P 500 funds, which has contributed to a ‘rich get richer’ problem, where the largest stocks are getting larger due to S&P 500 investing, rather than individual stock investing,” Koehler says. “This can lead to higher volatility, as active managers sell an individual stock on top of index funds selling a portion. The market could continuously be overvalued compared to its underlying value.”

But relative to the downsides of many investment types, the flaws of S&P 500 funds seem relatively minor, especially when used as a part of your overall portfolio and held for the longer term. This helps explain why icons like Buffett have so publicly endorsed them.

Also see: 5 things to do if you inherit a Roth IRA

“I happen to believe that Berkshire is about as solid as any single investment can be, in terms of earning reasonable returns over time,” said Buffett at the May meeting, speaking about the investing company he’s turned into an empire. “But, I would not want to bet my life on whether we beat the S&P 500 over the next 10 years.”

More from NerdWallet:

Tiffany Lam-Balfour is a writer at NerdWallet. Email: tlambalfour@nerdwallet.com.

NerdWallet: Countries that will give you a remote-work visa, and how to get to them

This post was originally published on this site

This article is reprinted by permission from NerdWallet.

Due to the coronavirus pandemic, more people are working remotely than ever before. However, working remotely while living through various stages of stay-at-home orders has caused many to reconsider their living arrangements, sometimes leading to an exit from big-city living to a new location in search of more space, better weather or greater access to nature.

Some countries have taken notice and decided to capitalize on the opportunity by offering remote work visas to help attract those who can do their job from their laptop. So, if you’ve dreamed of living on a tropical island during the winter, or amid the picturesque landscapes of Europe during the summer, you’re in luck.

Here’s what you need to know about which countries are offering remote work visas, how you can take advantage of this unique opportunity and how you can travel there on points and miles. Each country is paired with the length of the remote work visa and the cost of acquiring that visa.

Georgia (1 year, free)

Georgia is a country on the Black Sea that borders Turkey, Russia, Armenia and Azerbaijan. The country is a popular digital nomad hub, so it is no surprise that Georgia has begun offering digital nomads greater access. For Georgia, it’s more a form than a traditional visa, which makes the process even easier. Currently, only five countries (Germany, France, Latvia, Lithuania and Estonia) are allowed direct, no-quarantine entry into Georgia. Since the U.S. is not on the approved list, this free, one-year visa is the only way U.S. citizens can live and work remotely in Georgia.

To apply, you will need to fill out an online application and, upon approval and arrival into the country, need to quarantine for eight days at an approved location. You will need to show proof of financial means and health insurance coverage that is valid for at least six months.

Key details

Internet: Georgia has good Wi-Fi speeds and plenty of places to work from, whether that’s coffee shops or co-working spaces.

Community: Georgia has a strong digital nomad community.

Weather: High temperatures in Georgia from April through October are pleasant, ranging from the 60s to the high 80s. In the winter months, the weather is still relatively mild, especially if you’re comparing that to winters in the Northeastern U.S., with highs in the 40s.

Language: Georgian is the official language, but younger generations are more likely to speak English.

Money: The local currency is the Georgian lari, and the exchange rate fluctuates around $1 USD = 3 GEL.

How to get there on points and miles

There are no direct flights from the U.S. to Georgia so you will likely need to connect in Europe or the Middle East. We recommend flying on Turkish Airlines (Star Alliance) since you will connect in Istanbul, which is fairly close to Georgia. You can use Air Canada’s ACDVF, -4.73%   Aeroplan miles to get a one-way economy ticket partner award on Turkish from the continental U.S. to Georgia for 37,500 miles, while business class will cost 57,500 miles.

Other good Star Alliance options include Lufthansa DLAKY, -5.38%   and United Airlines UAL, -4.59%  . You can also consider Oneworld Alliance members Qatar Airways and American Airlines AAL, -2.49%  .

Bermuda (1 year, $263)

Work remotely on a pink sand beach in Bermuda.

istock

The Work From Bermuda certificate is a one-year visitor visa aimed at attracting digital nomads and remote workers to live and work from the island. To apply, you must be at least 18 years old, not have been convicted of a crime, have proof of employment or school enrollment, have health insurance and have means of financial support. The website boasts that the application will take only 15 minutes to complete. Although the visa fee is minimal, Bermuda is known as an expensive destination, so you won’t be saving a ton of money by moving there.

Key details

Internet: Although high-speed internet is available, plans can be quite pricey.

Community: Bermuda is a relatively safe destination so could be a great option for those traveling with a family.

Weather: The weather is pretty consistent year-round, ranging from the high 60s to the mid 80s. Hurricane season is June through November, so keep that in mind as you plan your travels.

Money: The local currency is the Bermuda dollar, and it is pegged to the U.S. dollar at a 1:1 ratio.

How to get there on points and miles

Our recommended way to get to Bermuda on miles is to fly on American Airlines, which offers round-trip MileSAAver off-peak and peak one-way flights from the continental U.S. to Bermuda for only 12,500 miles and 15,000 miles, respectively. Off-peak dates are from April 21 to May 20 and Sept. 9 to Nov. 18.

Other options include flights on JetBlue JBLU, -6.48%  , Delta DAL, -3.45%   and Air Canada.

Estonia (1 year, $118)

Estonia has launched a Digital Nomad Visa, allowing location-independent employees and digital nomads to live in the country for up to a year. You will need to show that you have an employment contract with a company registered outside of Estonia or that you work as a freelancer with non-Estonian clients. In addition, you will need to show that you’ve met the monthly minimum income threshold of 3,504 euros (about $4,130) in the six months preceding your application, which can be a steep requirement for some. The application must be printed and submitted at the Estonian Embassy or Consulate, and it can take up to 30 days to review the application.

It’s important to note that Estonia states that if you’re a resident of a country that is prohibited from entering the European Union, your application for the visa will not be successful. So, if you’re American and were hoping to get into Europe using this visa, you will need to wait until the U.S. is on the approved country list.

Key details

Internet: Speeds are solid, which is an important decision point if you’re thinking of relocating.

Community: Tallinn, Estonia’s capital, is a digital nomad hub, making the city an excellent option for those looking to settle into a community of remote workers. Estonia is also considered a safe country for travelers.

Weather: Since Estonia is in Northern Europe, the warmest time to be in the country will be from June through September, when average daily temperatures are above 62 degrees Fahrenheit.

Language: The local language is Estonian, but as with many countries in Europe, a lot of people speak another language. In Estonia, that language is most commonly English.

Money: Estonia is on the euro with a varying exchange rate to the U.S. dollar.

How to get there on points and miles

There are no nonstop flights from the U.S. to Tallinn, Estonia. Our recommended way to fly is to use 22,500 (off-peak) or 30,000 (peak) American Airlines miles. Off-peak MileSAAver rates to Europe are from Jan. 10 through March 14 and Nov. 1 through Dec. 14.

You might like: The best places to live in America in 2020

Other airline options include Lufthansa, KLM KLMR, +0.10%   and Turkish Airlines.

Antigua and Barbuda (2 years, $1,500)

The country of Antigua and Barbuda comprises two islands in the Caribbean. It’s offering a Nomad Digital Resident, or NDR, visa to attract remote workers. Unlike the Bermuda and Barbados visas, the NDR is valid for two years. To apply, you will need to certify that you expect to earn at least $50,000 a year while on the NDR visa and have sufficient means to support yourself. You will also need to provide a police clearance letter, evidence of employment (self-employment is sufficient), a passport-size photograph and other passport information. For a couple, the visa fee increases to $2,000, and a family of three or more will be required to pay $3,000.

Key details

Internet: While we couldn’t find average internet speeds for the islands, there are several internet providers available including Antigua Computer Technology, Antigua Public Utilities Authority and BSNL Mobile.

Community: The islands aren’t known as a digital nomad hub yet, but the country is looking to change that with the issuance of the NDR visa. It is generally considered one of the safer nations in the Caribbean.

Weather: The climate is pretty consistent, with temperatures ranging from the 70s to the 80s year-round.

Language: English is the local language.

Money: The local currency is the East Caribbean dollar, and the exchange rate fluctuates around $1 USD = 2.7 XCD.

How to get there on points and miles

Antigua and Barbuda is also part of the Caribbean region on American Airlines, and using 12,500 (off-peak) or 15,000 (peak) is a great way to get there on points and miles.

Other good options to get to Antigua and Barbuda from the continental U.S. include JetBlue and United.

Also see: Change for the better? How travel might look after the pandemic

Barbados (1 year, $2,000)

The Barbados Welcome Stamp is a new one-year visa that allows you to work from your laptop while living on the Caribbean island. You can apply online and, along with your application form, will need to submit a passport-size photo, the bio-data page of your passport and proof of relationship of any dependents traveling with you. The visa costs a steep $2,000 for an individual and $3,000 for a family. Barbados states that it will take roughly five working days to process the visa application. Valid medical coverage is a prerequisite for visa approval; however, if you’re unable to purchase a policy in advance, Barbados will offer medical insurance options.

Key details

Internet: According to the government, Barbados offers high-speed fiber internet with very fast download/upload speeds (up to 1,000/500 Mbps) and 4G mobile services.

Community: While Barbados isn’t known as a big digital nomad hub, this new visa is looking to change that. The country is considered relatively safe and is known as a family-friendly destination.

Weather: The weather is similar to Antigua and Barbuda and is pretty consistent all year long with highs in the 80s and lows in the 70s. Hurricane season lasts from June through November, so if you’re planning on making Barbados your home in the winter, you’re in luck. Similar to Antigua and Barbuda, English is the official language in Barbados, which makes it easy for remote workers moving from the U.S.

Money: The local currency is the Bajan dollar and is pegged at a rate of $1 USD = 2 BBD.

How to get there on points and miles

Similar to Bermuda, flying on American Airlines is the best way to get to Barbados using 12,500 (off-peak) or 15,000 (peak) AAdvantage miles.

Other major U.S. carriers with good options to Barbados include Delta and JetBlue.

Other remote work visa options

Costa Rica, Germany, the Czech Republic, Mexico, Portugal and Spain are some of the other countries that offer various forms of long-term visas that allow you to work remotely. However, these countries have slightly stricter requirements ranging from needing a specific city address (Germany) to having a minimum savings account balance (Spain) and many other criteria. Croatia is also expected to issue a digital nomad visa, which would present an excellent option because of Croatia’s beautiful landscape and perfect weather in the summer.

The bottom line

The boom in telecommuting due to COVID-19 has provided plenty of options to people who’d like to move abroad while keeping their remote job. Countries have taken notice and have offered various forms of long-term visas aimed at attracting remote workers.

Due to the variety in remote career options, your individual situation may be more suitable for one country’s visa program compared with another’s. Be sure to check with your employer, too, because there are often tax regulations relating to the location of your work.

Read next: Here are 20 of the best jobs and careers for being remote

Furthermore, while certain countries may have easier application requirements, the cost of living or lack of a community might be a barrier. But the abundance of options is a step in the right direction and is providing a lot of food for thought for those who’d like to try out the digital nomad lifestyle.

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Elina Geller is a writer at NerdWallet. Email: egeller@nerdwallet.com. Twitter: @elina_geller.