What do you get when you mix a millennial with an entrepreneur? According to a recent report, the "millennipreneur" is an exciting, new generation of savvy, young and creative business owners that are blowing their parents out of the water. How do they do it? How can they inspire you? Let's find out.
They're investing in the best.
This group saw an impressive investment increase in 12% over the last year, concentrating a large chunk of investments abroad. They also diversify their investments -- averaging 20% of investments in their own business and 17% in real estate.
They're starting young.
According to the report, the average age that this group considered starting their business was 29.4 years old and actually started a business at 31.1 years old. When it comes to making money, why wait? Compared to Baby Boomers, this generation is starting much earlier and have launched almost twice as many businesses.
If at first they don't succeed…
The Millennial attitude is different from that of its predecessors. These young business owners know that they'll have to try a bunch of different strategies before succeeding. They are resilient to failure and bounce back in order to attack a problem from a different angle.
They're technologically advanced.
These days, technology is a huge sector to take advantage of. With apps and other online services being vital to the modern consumer, young people have new opportunities to turn virtual success into physical dollars. They're skilled in coding and other web development techniques that contribute to their DIY sensibility.
They work together.
Millennial entrepreneurs thrive on collaboration and a model of constructive feedback. No one works in a bubble, but everyone's skills can be pooled to create the best product or service. Older generations have been known to be territorial about their ideas. But with open floor plans and a mixture of virtual and physical communication, Millennials are able to succeed even remotely.
Now that you know how they did it, it's your turn. Even if you're not a Millennial, you can still follow in the footsteps of these young business super stars. With a positive attitude, resilience, and knowledge and curiosity of profitable domains, you too can be on the track to entrepreneurship.
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.