The way that young people make money is rapidly changing in an ever-evolving digital world. Traditional methods such as taking on part-time jobs, saving up money from an allowance, or working for an hourly wage are being replaced by innovative ways to make money using technology.
One of the most popular ways for young people to make money is through apps and websites. Services such as Uber, Airbnb, and TaskRabbit allow young people to make money in a variety of ways, including becoming a driver, host, or tasker. With these services, young people can set their own hours, find flexible gigs, and make money on their own terms. Another popular way for young people to make money is through online freelancing.
There are a variety of websites such as Fiverr, UpWork, and Freelancer that allow young people to find gigs related to their skills and interests. Whether it’s writing, graphic design, programming, or virtual assistant work, young people can find jobs that fit their skills and make money in a flexible way.
Finally, the rise of social media has allowed young people to make money through influencer marketing. Services such as YouTube, Instagram, and TikTok have enabled young people to monetize their content and profit from it. Through sponsorships, affiliate links, and other revenue streams, young people are able to make money through their social media accounts.
Overall, the way young people make money is changing rapidly. Traditional methods of making money are being replaced by innovative ways of making money through technology. With these methods, young people are able to make money on their own terms and find flexible gigs.
But what are some of the more traditional ways young people can still gain wealth?
DailyVeracity does not offer financial planning services or advice. This article, and articles like it, are for informational purposes only. Do your own research.
Do What Rich People Do
There is no single perfect investment product. If there were, everybody would simply buy that one. There are always pros and cons, usually revolving around risk, reward, and duration.
One interesting financial product is called an indexed universal life (IUL) insurance policy. It is basically a regularly funded life insurance policy with its asset value backed by a stock market index fund. The outstanding feature is that one can take a very low-interest loan (usually 0.2%) against the asset value, and not pay income or capital gains taxes. Life insurance pays off the loan when exercised.
The cash value of the amount of the premiums paid (basis) can be accessed without being taxed since those premiums were paid in after-tax dollars. There are also no age restrictions or penalties on borrowing against the cash value.
How It Works
First some definitions. The floor is the minimum guaranteed interest. The participation rate is the gain percentage credited to the policy. Cap is the maximum percentage that can be gained. In the case of an indexed policy, the floor is usually 0%, and the participation rate is 100%.
How can there be gains without losses? The life insurance company purchases options on the market index. This investment strategy generally gains money when the stock market is up, and reduces losses when the market is down, but also does not benefit from stock dividends.
This is where the cap is applied. Generally, the cap is set at 8-12%. If the market performs better than that, then the policyholder is limited to the cap rate.
The option investment strategy and cap work together to maintain insurance company operations and shield the customer from market swings. The drawback is the customer benefits less when the market is doing great. Not necessarily a bad tradeoff.
Note that it is important during the initial years to maximize the paid premium. The floor is 0%, but if starting in a bear market, a minimally funded policy can result in a negative cash value.
Final Thoughts
An IUL is only as good as its selected features. It is important to be familiar with various available riders, and how different options, long-term care for example, can affect an individual situation. An indexed universal life policy is a solid and reliable product that provides a specific set of benefits. For those who want the benefits of a bull market without the bite of the bear, it may be a good choice.
DailyVeracity does not offer financial planning services or advice. This article, and articles like it, are for informational purposes only. Do your own research, and consult tax professionals when appropriate.
Investing in Gold and Silver
The money we earn represents storing the value of our talent and labor. Except through unlimited printing of fiat paper money and incurring more debt, the federal government Is stealing our property through an accounting back door. It makes sense to want to preserve otherwise stolen value.
One way to preserve the value of the otherwise inflated United States dollar is to store it as gold or silver which has intrinsic worth. There are a few ways to accomplish this, and the set of approaches chosen depends on individual financial goals and purposes for the investment.
ETN/ETF: Exchange Traded Notes (ETN) and Exchange Traded Funds (ETF) can be purchased directly or as part of a mutual fund as a regular stock market transaction using any number of brokerages or brokerage apps. A related possibility is to purchase stocks in mining and refining businesses that produce precious metals.
It is interesting, but unsurprising, to know that commodity reporting loopholes enable stock traders to exchange “paper” that represents more precious metal than physically exists.
IRA: An Investment Retirement Account (IRA) has the benefit of tax deferment, where the IRA expense can be deducted from annual income, within legally defined limits. IRAs backed by precious metals may include physical bullion and/or any combination of precious metal-related stocks.
IRAs are long-term investments, meaning that the value should not be accessed until retirement age. It may be possible to take a short-term loan (up to $50K in 1 year) against the value of an IRA, but that feature needs to be chosen when establishing the IRA, and not all IRAs allow loans. IRA value can be liquidated in dire emergencies, but it is a really bad idea: it’s taxed at 50%.
Direct purchase: This is popularly called stacking, and there are countless informative online videos of enthusiasts and their precious metals. Some are coin collectors, some want to store value, and others plan for barter needs. Purchases can be made through local dealers or online. A few popular sites are sdbullion.com, jmbullion.com, apmex.com, and monex.com. Shop around for the best deal.
The first thing to be aware of is the dealer buy/sell spread. Purchases from dealers are made at one price, and sales back to dealers are made at a lower price. This is how dealers turn a profit to stay in business, and the spread can be significant.
Keep in mind there is the spot price, which is the market value of the metal itself, and the numismatic price—a fancy term that encompasses the processing costs to manufacture a specific form factor of bullion or mint a coin. Coins also have a perceived desirability, which makes the buy/sell spread higher for them compared to bullion.
Anti-Money Laundering (AML) laws and Financial Crime Enforcement Network (FinCEN) reports are required for certain transactions, usually above $10K. Reporting requirements differ between bullion and coins. The United States minted silver eagle, gold eagle, and gold buffalo are considered legal tender by the Constitution, for example. However, capital gains taxes apply to the sale of both bullion and coins and are reported to the IRS on form 1099-B. The upper limit on short-term (1 year) capital gains is 37%. The upper limit on long-term (more than 1 year) capital gains is typically 20%, but in the case of precious metals it is 28%.
If you plan to have some precious metals handy for bartering, it is best to keep that information to yourself. Depending on the quantity, a bank-safe deposit box might be a good idea. Alternatively, some online dealers offer vaulting services, which have monthly fees to cover overhead and insurance costs, and will ship your metal to you on demand. Shop around for the best deal in vaulting services too.
When choosing a vaulting service, pay attention to how precious metals are stored. Avoid unallocated storage, which means the vault maintains a record that you are owed a number of precious metals but does not necessarily physically possess your property. Use a vault with allocated storage, which means deposited precious metals physically exist in the vault. Segregated storage is more precise allocated storage, and means what you bought is what you get if they send it to you. This is generally only important if you require unique property, such as when collecting coins.
Exchange Account: Timing, buy/sell spread, and potential storage costs make the precious metal not very liquid when compared to simply using United States dollars in a bank account. Some gold exchanges, such as upma.org, focus on silver and gold coins since those have special status as a currency, and offer accounts that incorporate the vault fees into the competitive purchase price.
In addition to trading directly in gold and silver dollars between exchange members, and having account statements that can be used as collateral to obtain loans from traditional banks, one big benefit to a upma.org account is the ability to pawn the value (up to $10K per month) of vaulted coins to a debit card in United States dollars for spending. An account holder could regularly save income as gold or silver dollars to take advantage of dollar cost averaging, more easily spend the stored value when needed, and avoid capital gains taxes as pawning an asset is not the same as selling an asset.
