Times are a changing and paradigms are a shifting. One rising trend is that of the digital nomad. Armed with wireless internet, their smartphones, tablets, laptops, cool travel bags, and their wits digital nomads work remotely wherever they decide to live or travel. As long as you can do/submit you work via the web, these days you can roam as freely as your hearts content. Add cool services like Airbnb and Turo, and you can find an affordable place to stay and a car to get around pretty much wherever you go. Digital nomads also make use of coworking spaces, cafes, house sitting agreements, and shared offices in to do their work. It's really up to you to get as creative as you'd like. So what do you think? Could you be a digital nomad? Before you start dreaming of filling your Instagram feed with pictures of you and your laptop in exotic places, let's examine so of the pros and the cons of the digital nomadic lifestyle.
The most obvious advantage to the digital nomad lifestyle is of course the ability to travel freely. With no brick and mortar location to tie you down, you're free to work anywhere you can get yourself set up. There's also the freedom from a rental agreement. What most people find they dislike most about their jobs is not the work itself, but rather the work environment, the co-workers and the management. Being a digital nomad offers recompense from what has become the standard stale office archetype. Traveling often means you're also getting accustomed to new cultures and worldviews and new environments. Seeing more helps to expand perspective and creativity. With proper budgeting and taking advantage of travel and lodging savings programs, you can begin to build savings to invest in your business and to enjoy and experience more life.
It's not all sunshine and rainbows on the digital nomad trail. Being far away from friends, family, and familiar environment can be difficult. You will have to adjust to different laws, customs, time zones, and life philosophies. Majority of digital nomads rely on wifi to get their work accomplished, and there are times when travel can present a difficulty finding steady, reliable wifi. Your most constant and heaviest expenses will be food and lodging, and it works a little differently everywhere you go. Perhaps the most difficult aspect of digital nomadic life is maintaining your work leisure balance. Traveling in and of itself can be exhausting and of course you'll want to explore and enjoy your new environments. Finding the ideal balance between work and play is the most quintessential element in in making the lifestyle work and be enjoyable.
Being a digital nomad is not of everyone, but if you find yourself intrigued it can provide a very rewarding alternate lifestyle. Some people prefer the security that a stable 9-5 brick and mortar career offer, but as the world changes and paradigms shift, new opportunities are opening up. It's on you to do your due diligence and decide whether life on the road is for you or not.
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.