What are Online Currencies?

Bitcoin and other online currencies, explained

man holding gold bitcoins in his upturned palmsIn the past several years, one of the most confusing terms to appear in the financial world has been “online currency” or, more specifically, “cryptocurrency.” Some bear seemingly silly names, such as the internet-meme-inspired Dogecoin, but the most famous, and certainly the most discussed, is Bitcoin.

However, the question remains: just what are these online currencies?

The basics
As TechRepublic points out, there are a few terms commonly used interchangeably for online currency, but which have different meanings. The first is “virtual currency” or “online currency,” which was identified by the U.S. Department of Treasury as operating like traditional currency but without legal tender. The European Central Bank defined it as unregulated digital money, usually under control of its developers, and used among specific online communities.

The second term is “digital currency,” which is a virtual currency that is created and stored electronically.

The third term is “cryptocurrency,” i.e. a digital currency which uses cryptography for security to make it difficult to counterfeit. This most specific subset, of which Bitcoin is the best example, is notable for not being issued by a central authority.

Cryptocurrencies are the most-used online currencies and have gained significant traction with established merchants as well as individuals. However, security is a higher risk. CNN Tech points out that Bitcoin in particular is stored either on a personal computer, where the coins can be accidentally deleted or destroyed by viruses; or the cloud, which can be hacked.

Value of these currencies, according to Bitconnect, is affected by a large number of factors, such as supply and demand and its utility, but is made “because people think it has value and use it as a unit of exchange.”

The reasoning
According to a paper published by the creator or creators of Bitcoin under the pseudonym Satoshi Nakamoto, one major reason for the creation of cryptocurrencies is to eliminate the need for a “trusted third party” in online transactions, which for the most part are financial institutions. This also eliminates transaction fees and the need to share personal information along with the currency, which previously was needed to ensure trust between the buyer and seller.

More plainly, this means a transaction that only involves the buyer and seller with no associated handling fees, which can be performed entirely anonymously.

The sources
To describe where these currencies come from, we will stick with Bitcoin, as the most widespread cryptocurrency.

According to CNN Tech, Bitcoins are generated by a process known as “mining,” where people use computers to solve complex math problems with specific, open-source software. In this way, the more powerful a computer is, the faster is can “mine” for the specific number of possible Bitcoins—although, as TechRepublic points out, this process places high demands on hardware power and uses a lot of energy, leading some groups of people to pool the power of their computers and share the resulting profits.

The future
The future of these online currencies is presently unclear. Bitconnect points out that the value of online currency faces significant legal and governmental issues, as most countries have yet to form legal precedents relating to them. Some have even banned their use, or given them an official status so that they can be taxed as income. In general, regulations surrounding online currencies are still in development.

Meanwhile, the future within the cryptocurrency community, which according to Investopedia uses over 700 different currencies, is also uncertain. Wired explains that there is a growing movement to merge all of the online currencies with technology that would allow each to interact with one another, known as the “interledger protocol.” This is led by the company which oversees the cryptocurrency Ripple, with support from Microsoft and the World Wide Web Consortium. In essence, this would allow one person to send any currency and have it arrive as any other currency.

In any case, online currencies are clearly not about to disappear, and could potentially have a great effect on the future of worldwide commerce.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.


Staying Active at Your Desk Job

You don’t have to sacrifice your health for your 9-to-5

Young woman in workout attire performing a calf stretch on her desk at workStaying active and fit is difficult for everyone and for those with a desk job, sitting for eight or more hours per day and finding the time to be active can be even more challenging. But having a 9-to-5 doesn’t mean you have to sacrifice your health. Consider these few easy ways to increase your activity at work.

Standing desk
Many offices will arrange for you to have a standing desk upon request. Your desktop is raised to chest-height when you’re standing in your cubicle or office. Having a standing desk will improve your posture, circulation and overall energy levels. You can also have a chair nearby if you get tired of being on your feet. If your office doesn’t have a standing desk option, try sitting on a balance ball. It will help improve your posture and it forces you to focus on your balance throughout the day, therefore strengthening your core.

Take the stairs
If you work on an upper floor, opt for the stairs instead of the elevator. Now, if you work on the 35th floor of a sky rise, no one expects you to climb all the way to the top. However, by taking the stairs up or down three or four flights, then hopping on the elevator, you’re upping your activity levels in the morning and at the end of the day.

Make in-person visits
If you have a quick question for a colleague, skip the email. By walking over to their workspace to speak with them directly, you’ll add to your activity levels. Plus, you’ll strengthen your relationship with that individual and encourage a friendlier working environment.

Take a break
Instead of flipping over to one of your many social media accounts during your break, go for a walk. If the weather is nice, take a stroll outside and enjoy the fresh air. If it’s cold, take a few laps around the interior perimeter of the building. You may even run into someone you know or meet someone new.

Stretching doesn’t require a whole lot of space or excessive amounts of energy. From your seat, you can reach your arms up to the sky and stretch your arms, back and neck. You can even stand up and stretch your legs if you’re feeling antsy. Stretching will improve blood flow throughout your body and keep your muscles awake.

Go out for lunch
Instead of eating lunch at your desk, consider going out to eat. Even if you pack a lunch, take a walk to a nearby park or another dining area where you can sit and enjoy your food. Walking to and from the off-site location will help get your legs moving and give you a change of pace.

Finding time to exercise is tough when you’re working a full-time desk job, but you don’t have to give up an active lifestyle. Try incorporating these few techniques into your daily routine. The results may surprise you.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

How to Know if You Need a Cosigner

A look into what a cosigner is, why you might need one and the risks serving as one presents

close-up of a person's hand as they are signing a legal documentLoans are an economic staple in most people’s lives; they can help pay for education, transportation or living arrangements. Of course, getting a good loan from the bank or some other financial institution can be quite difficult for some people. This is especially true for buyers who are just starting out and don’t yet have a sound credit score.

For these individuals, seeking out a cosigner might just be the way to go. A cosigner allows people to receive a loan or transaction they otherwise wouldn’t have access to. Being a cosigner can be quite risky financially, so it’s important to know exactly when you need to ask somebody to serve as one on your behalf.

What is a cosigner?
Investopedia defines cosigning as “the act of signing for another person’s debt which involves a legal obligation made by the cosigner to make payment on the other person’s debt should that person default.” While the person requiring the cosigner isn’t always in debt, a payment due is always involved.

In summary, a cosigner is someone who agrees to make payments on a loan if the primary recipient of said loan is unable to do so. Oftentimes, the person who takes out the loan is more than able to pay it back, but is unable to receive the original loan without someone else backing them.

By having someone serve as a cosigner, individuals can gain access to much larger loans than they would have been able to by themselves. However, the Consumer Financial Protection Bureau notes that interest rates are usually much higher for individuals with a cosigner.

When do you need a cosigner?
Justin Pritchard of The Balance explains that the most common reason people require a cosigner to receive a loan is due to their credit score. If the individual has a poor credit score and history, they will be unable to receive stronger loans without the guarantee that someone with a better credit score is backing them.

Several different transactions often necessitate the need of a cosigner. Some of the most common are purchasing a car and renting or buying a house.

A cosigner is not necessary for just any transaction, though. Consigners should be found for important financial endeavors that are required to meet basic needs, like the aforementioned lodging or transportation.

Who can serve as your cosigner?
The individual who signs up to be a cosigner is required to have a strong credit history more often than not. They should have enough money saved up and have a strong enough credit score that signing up to cosign shouldn’t negatively affect them. Nevertheless, simply by serving as a cosigner, they do run the risk of hurting that credit score. For this reason most cosigners are people close to the person applying for the loan. The Consumer Financial Protection Bureau notes that most cosigners are family members and most often parents.

Your lender does not designate who must be your cosigner, but will accept anyone who meets their credit standard and guidelines.

What are the risks of serving as a cosigner?
Signing up to be a cosigner is a decision that requires a lot of forethought. If something goes wrong with payments, it will be the cosigner’s responsibility to cover those payments. Cosigners are held to an equal amount of responsibility for paying the loan as the original person who applied for it. Despite this, Kristy Welsh noted in USA Today that lenders will often take legal action against the cosigner first if payments are not made, knowing that the cosigner probably has a larger, more reliable amount of money.

Your lender will provide your cosigner with a disclosure that summarizes their obligations.

Before you consider seeking out a cosigner, it’s important to consider whether the loan you are looking to sign up for is for something that’s absolutely necessary. Settling for a smaller loan might mean settling for a smaller home or car, but it often means that neither you nor your potential cosigner will suffer serious financial burdens down the road.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

What Does a 529 College Savings Plan Cover?


529 college savings plans are only eligible for spending on certain expenses

Jjar of money labeled collegeThe cost of attendance at American universities is skyrocketing year after year, with a college education now costing up to six figures. 529 college savings plans offer a tax-free way to save money for your education. However, there are a few conditions since the money is tax-free, including what you can spend that money on. Here are a few of the qualified expenses included in the plan.

Tuition and education fees
Of course, the most obvious college expense is tuition. Any of your 529 savings money can be applied toward basic tuition. Many colleges charge mandatory fees such as application fees and additional course fees, and your savings plan can be used on those as well.

Keep in mind that your savings plan can only contribute to mandatory fees. Writer for Washington’s Top News, Nina Mitchell, warns against the use of 529 savings funds for fraternity and sorority membership dues or club and activity fees. “These are considered extracurricular and are not eligible,” says Mitchell.

Textbooks, computers and school supplies
Alongside the rise of tuition prices, textbook prices are also increasing each year. According to Brian Boswell, contributor at Forbes.com, your savings plan can be applied toward textbook rentals and purchases each year. You can also put your savings money toward school supplies, including items like pencils, pens, backpacks and notebooks.

Modern-day education often requires students to have their own personal computers or laptops. With advancing technology, laptops are more expensive than ever. Laptops and desktop computers can be purchased through your 529 savings plan, says Boswell, easing the burden of buying new, up-to-date technology. Printers are also covered under the plan.

Room and board
Your housing costs as a student are covered under your 529 savings plan as well. Whether you live in a campus dorm and are paying for student housing, or if you pay rent off-campus, your savings money can be used for your rent and utilities. While you’re a student, your savings money can also be applied to your dining plan and grocery costs.

However, Boswell explains there is a catch to off-campus living, “To be considered qualified, [off-campus living] costs must be less than or equal to the room and board allowance from the college’s cost of attendance figures. If the total cost living off-campus exceeds the school’s allowance, the student would have to pay the difference using funds from another source.”

If your university charges a fee for internet usage, or if you live off campus and have to purchase an internet package yourself, you can pay those expenses out of your 529 savings plan. Additional software deemed necessary for your education is also covered.

Disability equipment
If you have a disability that requires medical or mobility equipment, you can purchase those items with the money in your 529 savings plan, says Boswell. These items include wheelchairs, prosthetics and transportation costs.

Saving and paying for college tuition alone can be stressful enough, but having to worry about additional school-related expenses just adds to the frustration. Luckily, these expenses are all covered under your 529 savings plan. Consult your tax advisor regarding your personal situation and the possible impacts and benefits of this type of program.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

What You’ll Need for an Auto Loan

Make sure you have these things before you go into an office for a car loan

Car keys, calculator, and loan paperwork on a deskWhen buying a new car, getting a loan to cover the cost is an increasingly popular option chosen by new drivers. In fact, data from the Federal Reserve Bank of New York and reported by CNN Money shows that a record 107 million Americans currently have auto loan debt, a number which has been growing rapidly over the past 5 years.

If you plan to take out your own loan for your next vehicle, you are definitely in good company. However, first-time buyers may be surprised that getting an auto loan requires bringing along a certain number of items.

Proof of income
According to CarsDirect, proof of income is the first document that the lender will want to see, and the reasoning for it is fairly self-explanatory: whether the lender is a bank or an automaker, it wants to know that you are employed and therefore capable of paying back the loan. CarsDirect adds that proof of income generally would take the form of your last two pay stubs, or your direct deposit receipts if your employer prefers that payment method.

These pay stubs offer a good deal of information about your employment history, including how much money you have made to date, how much you pay in taxes, how long you have been with this employer and whether you have any wage garnishments.

If you are self-employed, you will need to provide at least a year’s tax returns, although it’s a good idea to bring more just in case.

Credit and banking history
According to LendingTree, the next thing a lender will want to see is your credit history. This may include mortgage or lease agreements, statements from credit cards or banks and records from any alimony or child support payments.

This also means that a lender will be looking at your credit score. This three-digit number encompasses the above information, plus other factors, to show how much risk would be involved in giving you a loan. As such, a good credit score would show a potential lender that you are trustworthy, and you’ll have a better chance of securing a loan and setting better terms for that loan.

Since holding a good credit score is so important to this process, the U.S. Consumer Financial Protection Bureau (CFPB) offers a few rules for doing so.

First, pay your bills and loans on time and take care of any missed payments as quickly as possible to stay current. Then make sure you’re not too close to your credit limits, since credit scoring models check to see if you are close to maxing out. On a related note, you should only apply for credit that you need. Many credit applications in a short amount of time signal that you are in dire economic straits and may not be able to pay back a loan.

In general, the CFPB adds, a long, consistent credit history is the end goal to achieving a strong credit score. The longer you continue paying on time (and catching any mistakes), the better the effect will be.

Proof of residence
According to CarsDirect, proof of residence confirms to the lender that you live where you say you do. This information is needed so you can be contacted by mail or, in a worst case scenario, so your vehicle can be located for repossession. This document can be a bill or driver’s license, showing both your name and the address given on the loan application.

Vehicle information
This refers to the vehicle you want to buy, not any trade-in that may be involved. For a new car, LendingTree says that you will need the dealer’s sheet or buyer’s order for the vehicle, including purchase price and vehicle identification number, as well as its year, make and model. If buying a used car, you will need the same information from the seller, along with the mileage, original title and disclosures of any loans currently on the car, called liens.

Proof of insurance
According to CarsDirect, you need to prove that the vehicle has current, valid insurance. This should take the form of a document showing the specific vehicle is insured, and not simply proof that you have insurance with a particular company.

With these documents (and a good credit score) in hand, securing an auto loan can be turned into a streamlined and easy process. However, LendingTree explains that all lenders are different, so it pays to call ahead to see what specific information they want you to bring to help speed up the process.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

How to Find the Best Loan for Your Next Car

Here are the best tips on how to get the best loan for your new carYoung man and young woman  applying for an auto loan
Purchasing a vehicle is one of the largest and most important financial investments that any individual will ever make during their lifetime, excluding the purchase of a home. But the process of acquiring loans for a vehicle can often be confusing. There are many questions to ask leading up to the purchase of a new vehicle and customers need to determine whether they want to buy new or used, whether they want to buy outright or lease and which type of vehicle that they wish to purchase.

However, before any of these decisions can be made, customers need to determine how they will pay for the vehicle. While paying in cash is an option for a select group of new car buyers, most people will have to rely on an auto loan. Determining from where this money will come from can be the trickiest part of the process. Fortunately, there are ways to make the search for the best loan a little bit easier.

Loan pros and cons
While automotive loans can carry several benefits, they are not without their drawbacks. The most obvious benefit is that by using a loan, customers don’t have to pay for their new vehicle in its entirety, all at once. Another benefit is that automotive loans can help build credit. While you need good credit to qualify for most loans, paying for those loans will only improve your credit score. Auto loans, of course, do add another monthly payment to your pile of bills. Keeping up with those payments will be a necessity for many months ahead.

Who provides loans?
Automotive loans are offered to customers through a number of financial institutions. According to Consumer Reports, banks and credit unions are often the most common sources. If you have a good credit standing, then you will be able to attain some of the best loan rates from these institutions. But if your credit score is less than desirable, you may not qualify. Another very common source for auto loans is the dealerships themselves.

Determining which loan is best
Once you determine where you want to apply for a loan, the next step is looking for the best rates across the board. It’s important to pay careful attention, as some loans may look good on the surface, but could spell financial trouble in the future. As vehicle prices increase with each passing year, longer loans become available. However, Herb Weisbaum at CNBC suggests that drivers choose the shortest loan that they can afford. Not only will longer loans cost drivers more in the long run, but paying off a loan sooner removes one more payment each month.

If you happen to find the loan that works best for you before you are ready to purchase your vehicle, then this can be used to your advantage. The DMV says that getting pre-approved for a loan can carry several benefits. If you are pre-approved, this removes a lot of uncertainty during the entire financing process when it comes time to pick up your next set of wheels.

There is no such thing as a perfect automotive loan, as each driver has specific wants and needs. Still, there are processes and guidelines set in place to help you find the right loan for you.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Choosing the Best Renters Insurance Policy

What’s the best renters insurance policy for you?Portion of a renter's Insurance form , keys and a pen on a desk
Whether it’s a busted pipe that floods your apartment, smoke damage from a neighbor’s kitchen fire or a broken window caused by a windstorm, renter’s insurance can mitigate your risk of losing valuable possessions due to events outside your control.

Renters insurance is a smart and surprisingly affordable way to protect your belongings when the unexpected happens, but there’s no one-size-fits-all policy. To determine the policy that best fits your material life, consider the following tips.

Take time to comprehend the contract
Although a renters insurance policy might be a dull read, it’s important to sift through the entire policy and understand it completely before signing off.

“When you have a renters policy, an insurer typically pays for damage to your personal property, the cost of staying elsewhere if your place is inhabitable (say, from smoke damage), and accidents for which you might be legally liable—for example, if a visitor gets hurt or has property damaged at your place and sues,” explains ConsumerReports.org writer Barbara Kiviat. “Make sure any policy you buy covers all three.”

For greater liability protection, Nerdwallet.com writer Juan Castillo recommends investing in “umbrella insurance, which gives you an additional layer of liability coverage above the limits of renters insurance.”

Kiviat also recommends paying special attention to the “perils” covered in the policy. According to Kiviat, you’ll be covered by most policies if your belongings are impacted by vandalism, smoke, riots, explosions, fire, hail and theft, but damage incurred due to floods and earthquakes typically require additional, distinct insurance policies.

Let circumstances dictate choice
Although renters insurance is considered an overall affordable expense because of the protection it provides, your budget still might be less than accommodating. If your budget is rigid, Castillo recommends you “consider increasing your deductible. But first ask yourself: ‘How much can you pay out of pocket in the event of a damage claim?’”

Your dwelling would not be a home without your furry best friend, and although a dog is usually a source of unconditional love, sometimes your precious Fido can exhibit Cujo-like behavior.

“A lawsuit against you over a dog bite could ruin your finances for years. If you want coverage for this, make sure dog bites are covered by the liability portion of your renters insurance policy,” advises Castillo.

The philosophy of “what’s mine is yours” is an amiable way to live with a roommate, but it probably shouldn’t extend to insurance matters.

“Before you sign a policy, have a frank discussion with your roommate about how to share insurance payments—especially if your roommate has a lot of stuff that could drive up the cost of the quote. Be sure you agree, too, on the type of renters insurance coverage you’ll get,” advises Castillo.

Do the math
Since most items lose value over time, it’s important to understand the difference between cost and value.

“Policies cover either the replacement cost of property or its actual value. The latter takes into account that older items may have lost value over time. You might save on your premium by opting for actual-value coverage, but it’s usually well worth the price to go with a policy that covers replacement cost, because that’s what you’ll have to pay to buy new things,” explains Kiviat. She also notes that you can purchase additional coverage if you posses high-ticket items that your policy won’t provide full replacement cost for.

Renters insurance is a must-have budget item, and with solid research and a thorough assessment of your belongings and lifestyle needs, you will be able to buy the right renters insurance policy.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.