How to become a copywriter (even with zero experience)

Being a copywriter is AWESOME.

You get to jet around the world, eat in the finest restaurants, and date supermodels.

Totally legit text exchange I had recently.

Okay, maybe it’s not THAT extravagant — but being a copywriter is still great. You make a good amount of money while flexing creative muscles you wouldn’t be able to otherwise.

The best part: You also don’t need any formal education. In fact, some of the most sought after and highest paid copywriters in the world never took a writing class in their life and clear six figures a year.

Check out these rates that copywriters charge:

From our sister site GrowthLab.

A relatively new part-time copywriter can make $283 from just ONE blog post. The best part? It’s easily scalable, meaning you can earn even more if you have the right systems.

I’m going to show you how.

• What is a copywriter
• The two paths: Freelance and in-house
• How to become a copywriter
  • Step 1: Define your copy niche
  • Step 2: Find your clients
  • Step 3: Know what to charge
  • Step 4: Scale
• Earn more money today

What is a copywriter?

A copywriter is anyone who is paid to write copy — aka the words used for marketing products and/or services. This includes things like:

• Sales pages
• Email funnels
• Landing pages
• Blog posts / articles
• Social media posts
• White papers
• Case studies

Despite the name, copywriters are more than just writers. They’re writers, salespeople, and behavioral psychologists all rolled into one. To be a good copywriter, you need to learn to master all those elements.

Luckily, it’s easy to start getting the experience you need.

The two paths: In-house and freelance

There are two ways you can start getting experience as a copywriter:

• In-house. Working for a company or marketing agency.
• Freelance. Working as a freelance copywriter (aka being your own boss).

And both have their pros and cons.

IN-HOUSE COPYWRITING

IN-HOUSE PROS	IN-HOUSE CONS
Stable income and benefits	You get paid the same even if your work makes millions
Mentorship if you work under an experienced copywriter	Have to deal with office life (commute, traffic, Steve from accounting who steals your lunch every day, etc)
Work for big brands and contracts	Might have to write for brands and projects you’re not passionate about
Hone skills for copywriting more quickly since you have consistent work and mentorship	Have to work a LOT. This means stress and late nights at the agency in order to complete deadlines

FREELANCE COPYWRITING

FREELANCE PROS	FREELANCE CONS
Be your own boss	Might be hard to stay motivated without anyone keeping you in check
Choose your own hours, projects, and rates	Unstable income — including lean periods where you have very little work coming in. May have to take jobs you don’t enjoy
Work from home — which means you won’t have to worry about running late for work and paddle boarding across the Hudson River	Learning curve is steeper
Hustle on the side. This means you don’t have to quit the stability of your full-time job	Going mad after not leaving your house for weeks

If you want to learn more about getting an in-house copywriting job, be sure to check out our best resources on finding your dream job.

• Video: How to find a job
• Dream Job Blueprint
• The 80/20 guide to finding a job you love

For this post, I’m going to focus on creating your own freelance copywriting hustle — even if you have no experience. 

How to become a copywriter (even with zero experience)

The art of writing (and doing it well) is one you’ll learn with experience — so you might not be great at it if you’re just starting out at first.

To help offset the steep learning curve, though, here are some fantastic resources on copywriting from our sister site GrowthLab:

• 20 copywriting books you need on your shelf
• How to write copy
• The 6-part outline every good sales page has in common
• How a $100,000 sales page is made
• The Ultimate Guide to Remarkable Content (This is from our sister site I Will Teach)
• The Ultimate Guide to Email Copywriting

The good news is the more you do copywriting, the better you’ll get. So let’s get started on the four steps to becoming a freelance copywriter.

Step 1: Define your copy niche

Before you start looking for clients, before you start putting pen to paper (or fingers to keyboard?), before you do anything at all, you need to first define your niche.

This is the specific area and audience you’re going to target as a copywriter.

“But why would I want to limit myself? Wouldn’t I get more work if I open myself up to more people?”

It’s paradoxical — but you’ll actually be able to find more work AND charge more if you niche down your audience and specialization.

Imagine there are two fitness coaches. Which one do you think gets more business?

• The coach who says that he’ll help anyone feel and look better
• The coach who only works with middle-aged men to get six-pack abs

The answer is the second one! That’s because that coach is specialized. He knows who his clients are and offers a clear goal: To get six-pack abs. As such, he’ll attract more customers.

A few niche copywriters for inspiration:

• VeryGoodCopy. Eddie gears his copywriting to helping SaaS companies craft … well, very good copy.
• SusanGreenCopywriter. Susan helps nonprofits gain more funding through their copy.
• TheGymCopywriter. Gyms aren’t all about lifting and getting swole — they’re also about high-performing copy techniques.

So first, think about what role you want to own — and there are a lot of them.

• Emails / Sales funnels
• Social media / Community management
• Search engine optimization (SEO)
• Blog posts / Articles
• Video / Podcast scripts

There’s no right answer here. The important thing is you pick what’s interesting to you and get started. And you can always change it later if it’s not a right fit.

Now you’re going to niche down your target market.

This will be your prospective clients. Ask yourself:

• What industry are they in?
• What are their services?
• How do they use copy currently?

Once you have the answer to those questions, you can come up with your niched-down role.

Here are a few examples:

• Email funnel copywriter for SaaS companies
• Social media manager for nonprofits
• Blog posts for personal finance websites

Once you know how you want to approach your copywriting hustle, it’s time to find your first clients.

Step 2: Find your first client

Finding clients can be a little intimidating — especially when you’re new.

Luckily, once you find your first few clients, the process becomes MUCH simpler, since they’re likely to refer you to their network (more on this later).

There are a lot of different ways you can find your first client. And you already have a lot of different platforms to find work as a copywriter.

One of the most popular: Upwork, a job and gig site catered toward freelancers.

Getting started with the website is simple. You simply create a freelancer profile and start applying for various projects on the site such as copywriting, SEO, social media, and more.

It should be noted that while Upwork can be a great place to find clients and build a portfolio, you shouldn’t necessarily rely on it to find all of your clients.

Instead, we suggest you go to where your clients live. This means going to message boards, forums, and websites your client might frequent and be incredibly helpful.

It’s what Luisa Zhou, entrepreneur and writer for GrowthLab, did to help her earn $1.1M in eleven months.

From Luisa:

I started spending all my free time hanging out where my potential clients were online (free Facebook groups) and directly engaging with them by sharing valuable content and answering any questions I could about advertising.

That’s how I got my first client. A woman I’d been helping for free — answering her questions about how to set up a basic advertising campaign — asked me how she could work with me, and when I told her the price — $5,000 for six months — she said, without missing a beat, “I’m in.”

You can apply the same framework for your potential clients:

• Are you a graphic designer? Find a Facebook or subreddit group for small business owners who need your services.
• Are you a writer for a niche industry? Start answering questions on Quora regarding your niche.
• Maybe you’re a video editor. Find online groups for bloggers looking to expand their content media.

Start going to these places and providing value. Not only that, but you should be doing it consistently. I’m talking on there every day for AT LEAST one hour a day.

By being engaged and providing immense value, you’ll build a network of clients organically and develop a rock steady reputation.

Step 3: Know what to charge

This is the part where most freelance copywriters get tripped up. That’s because there’s no official rate for your services.

Like many things freelancing, though, you need to remember not to worry too much about it when you’re starting out.

In fact, you can even work for FREE if you do it strategically.

Some good examples when it’s okay to work for free:

• You’re building a portfolio of work you can show to future paying clients
• You want to build connections with businesses you admire
• The person you want to work for is well-connected. And if you do a good job, they’ll connect you with other people
• You already have a full-time job so you can afford to trade time for experience

This is something I’ve done when I was starting out as a freelance copywriter AND it’s something that Ramit has done many times before. 

This flexibility is key to any freelance marketer starting out.

Of course, you’re going to want to eventually charge, you know, actual money.

To help, we have four different pricing models you can use to base your rates off of:

• Hourly. You set an hourly rate and a client will pay you per hour. The benefit for the client is that they mitigate their risk since they can just stop paying you whenever they want if they’re dissatisfied. It also stops the clients from piling on work without paying you.
• By project. You’ll know exactly what you’re getting paid for an entire project, with more concrete deliverables for the client. This method is nice because when you’re done with the project, you’re done. So you might end up getting paid more than your hourly rate. However, you do run the risk of the client adding more work onto the project as you move along, so communication about what a “project” entails is important.
• By retainer. Your client will pay you a set amount monthly. This allows the client to have access to you at any given time during that month. As a beginner, you’re probably not going to find a client who is willing to hire you on retainer until you’ve built up enough experience working with them. However, it’s a good goal to have and something to keep in mind as you get into freelance marketing.  
• Commision/bonus. This payment model can work in conjunction with all of the other ones and can provide a healthy incentive for you to get your work done. For instance, if your client promises you a $1,000 bonus for attaining X amount of leads with your landing pages.  

If you’re a beginner, I suggest you charge hourly, because most clients are going to be unsure about whether or not you’ll be able to do a good job. As such, they might not want to give you a fat project fee.

Once you’ve gotten your first three or so clients though, then you can move on to different pricing models.

And when it comes to how much exactly you should be charging, there’s no right answer.

However, we here at IWT have a few solid rules of thumb that can help you ballpark a good rate:

1. Drop Three Zeros Method
   
   

   Simply take your ideal (read: realistic) salary, drop three zeros from it, and voila, you have your hourly rate!

   For example, say you’d really like to earn at least $40,000. Just take the three zeros from the end and you now have your rate: $40/hour.

2. Double your “resentment number”
   
   

   I love this one because it’s both really interesting and effective. Ask yourself: What’s the lowest rate you’ll work for that’ll leave you resentful of your work?

   Say you’ll work for $15/hour at the VERY LEAST. Just double that number so now you’ll earn $30/hour.

3. Do what the next guy does
   
   

   Go to Google and search for the average hourly rate for whatever service you’re providing. You’ll get a good sense of where to start when you’re charging your clients.

If you need even MORE help, here’s that handy chart from professional copywriter Abbey Woodcock. She surveyed 68 copywriters for GrowthLab to find out how much they charged:

What do you notice about the rates above?

First, there’s a HUGE disparity between a highly experienced copywriter and a beginner copywriter. This should be encouraging for anyone just getting started.

Also, even when you’re a relative beginner, you’re still making a good amount of money for your services. Say you write an “About” page for a company and charge $85. If that “About” page only took you an hour to write, that’s a fantastic ROI on the time spent.

Of course, you don’t want to just charge the same rate forever. Which is why, when you get more and more experience, you’re going to want to scale.

Step 4: Scale

Scaling means growing your copywriting hustle to earn more and get more clients.

And the best way to do this is through referrals. These are potential clients that you get from existing clients.

When your current client refers your copywriting services to another business, that’s a referral.

They’re incredibly valuable for a few reasons:

1. You can raise your prices when you get a referral. The client who referred you has automatically added value to your work by recommending you. That means you can charge more for your work.
2. You get better clients. When you charge more, you’ll start attracting high-quality clients who can afford you. They’re also much less likely to waste your time if you’re being paid top dollar. It’s a win all around.
3. You can more than double your income. Check out this case study from a freelance project manager who went from charging $25/hour to $75/hour just by getting a referral. This is a HUGE win.

And asking for referrals is easy — if you have the right script.

Luckily, we have a proven script from our article on how to get clients to help you ask for referrals:

CLIENT’S NAME,

I’m so happy to hear that you enjoyed my work. If you know of anyone else who’s looking for my services as well, I’d be grateful if you passed my contact information along to them.

Thank you,

YOUR NAME

It’s simple, direct, and gets results. Over time, you’ll start getting so many referrals you’ll have to deny some prospective clients — which is an awesome problem to have.

Earn more money today

If you’re really interested in making money as a freelance copywriter, we here at IWT have a gift for you: The Ultimate Guide to Making Money.

In it, we’ve included our best strategies to:

• Create multiple income streams so you always have a consistent source of revenue
• Start your own business and escape the 9-to-5 for good
• Increase your income by thousands of dollars a year through side hustles like freelancing

Download a FREE copy of the Ultimate Guide today by entering your name and email below — and jump into freelance marketing today.

How to become a copywriter (even with zero experience) is a post from: I Will Teach You To Be Rich.

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Saving to Survive the Unthinkable

The following is a guest post by my friend Chris (@yegct) on the importance of having an Emergency Fund for something you never want to need an Emergency Fund for.  Emergency funds are important, right? I mean, everyone says so. The rule is always six months of essential living expenses, saved up in cash and easily accessible. But, come on. You have real financial responsibilities that are a hell of a lot more urgent. You have to pay off your credit card debt, maybe get ahead on your mortgage. You still have those student loans, for crying out loud. Besides, you have life insurance (term life, not cash-value insurance) if the worst happens. You’re covered, right? I thought I was. I’m Chris Thompson. That was me in 2011, all financial bases covered. I was married. I had a mortgage, life insurance, a good job, plus just a little bit saved […]

The post Saving to Survive the Unthinkable appeared first on Money After Graduation.

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This family spends $36,000 / year on luxury services — here’s why.

The Rich Life is about earning and spending money to live the life you want, and forgetting all the rest. Last week, we spoke with a freelance copywriter who boosted her income by 50% by hiring a nanny.

Today, we talk to one Texas couple who spends roughly $36,000 / year on luxury services to look at how they built a Rich Life for their family — and the stigma experience as a result.

HARD NUMBERS AND FACTS

• Who: Jonathan and Shannon
• Children: 4 (ages 1 – 6)
• Cost of childcare: $2,600 / month (includes nannies, day care, and preschool)
• Cost of maid/cleaner: $100 / biweekly
• Cost of lawn care: $100 / biweekly  
• Profession: Own and operate a CPA firm and meal prep business
• Income: ~$300,000

Why do you invest in these luxury services?

JOHN: We view our time differently than a lot of people do. We outsource things to buy back our time. We have four kids, and the beauty of having a nanny, or maid, or lawn service, or meal prep is that we don’t lack any quality time with them. We see them for many hours a day because I don’t need to do things like mow the lawn and Shannon doesn’t have to worry about cleaning the house.

SHANNON: We even have our groceries delivered to us! By automating as much as we can, we get to spend more time with the family and on our businesses. Everything that doesn’t fall under that, we avoid.

JOHN: And when you do it, you carve out significant hours of your week towards quality time with your family. We think that’s a precious commodity. We don’t get a ton of time with our kids. They’re going to be up and gone before we know it. I can either spend that time mowing the lawn or I can pay someone else to do it and spend that hour with my kids.

What kind of stigma, if any, have you experienced because of this?

JOHN: We live in the South. So our parents and a lot of our peers live in traditional households — women stay at home to clean and cook. That sort of thing. Shannon deals with the social pressures around it. She’s a part of mom groups and things through church, where a lot of the moms are stay-at-home, so it can be tough.

SHANNON: It’s harder to connect with other women. We have nannies and we have a chef who preps our meals each week. So the way we handle money is so much different from our friends.

How does it feel to see that your lifestyle is so different?

SHANNON: When people ask, I feel embarrassed about it. The cultural environment we’re in is such that it’s essentially my job to raise the kids and cook the meals — but we have a nanny and meal prep business that does that! I feel like it’s different. People don’t really get it.

JOHN: I think friends and family sometimes think that the wheels are going to fall off eventually. Like, “How can you sustain this?”

SHANNON: They wonder where the money comes from — but they don’t realize it frees us to build our company and earn more because we’re not mowing our lawn or grocery shopping. That’s what we’re trying to focus on.

JOHN: The financial reality for some people is that they don’t have the money for things like a nanny or food prep. So when we say something like, “Why don’t we all go out to eat!” it’s not the reality of the situation. It makes you just not want to talk about it, invite people out, or do things. You just don’t know their situation!

That sounds like it can be very lonely.

SHANNON: It can be. I’m actually a part of a women’s business owner organization. That’s been a really good outlet for me because there aren’t a lot of women running companies in general. And the group of women almost feel like a support group for me. Last month I went, I felt very encouraged to be with people who understand where I’m coming from.

JOHN: Our lifestyle has led to countless moments where I’ve put my foot in my mouth too. I remember once we signed our kid up for a soccer league that cost about $75 per kid. I was talking to another family and asked if they signed their kid up. They told me that they were going to have their kid doing something else, so I said, “Why don’t you just do both?”

What I didn’t realize — and Shannon revealed to me later — was that the family couldn’t afford to do both those activities.

What kind of pushback have you received from your lifestyle, if any?

JOHN: I know Shannon has gotten comments from her family members in the past like, “You don’t see your kids enough.” Honestly, it might not be the same as other families, but she gets to spend a lot of quality time with our kids.

SHANNON: It’s just that it looks different than what they think it should look like. The perception is because I run my business, I have no time to spend with my children.

Since we have [these services], our routine is every evening we spend quality time together as a family. We also have a few hours with them every morning. It’s not my calling to be a full-time stay-at-home mom. So this is a good mix that works for the family and me.

JOHN: We’ve got close friends and family who think we’re crazy because of the way we live our life. For us, though, it’s not abnormal to work seven days a week raising four kids, six and under. We did the hard work early on so we can afford the life we have now.

Have friends ever commented on it?

SHANNON: I’ll hear the occasional backhanded comment every once in a while like, “Oh, that must be so nice to have a meal-prep company or a maid.” I remember once there was going to be a party at one of my kids’ schools. One of the moms made a comment about how all of the moms were setting up the party but I wasn’t because I was working. I couldn’t tell if it was supposed to be backhanded or not. [laughs]

JOHN: Or if they ask us to bake cupcakes or something for class. We would just buy the cupcakes. Some people like to take the time to make it themselves. We choose not to. Our attitude is that we’re not the best bakers in town — but we know someone who is.

SHANNON: I love my kids, and I want to give them all the things they love too. But it’s just not a good way to spend my time … and that’s something I feel judged about.

How frustrating is that?

SHANNON: It can be very frustrating. But I also feel comfortable just making those decisions because it works for us. It’s different than what works for other families and I completely respect that. I think it’s wonderful that other moms want to do all those things. There’s no judgment from me. Every family does what works for them.

JOHN: Once you start putting a value on your time, like us, some of this stuff like the pre-prepped meals can end up saving you a boat load of money too. Especially when we took a look at our grocery bills and accounted for our time spent working instead.

Sometimes the things we perceive to be luxury services are a better use of time and money — and that’s completely worth it to us.

This family spends $36,000 / year on luxury services — here’s why. is a post from: I Will Teach You To Be Rich.

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The 3 best IRAs to open in 2018

I got this question from a reader named Kelsey a while back:

“I haven’t started a Roth IRA yet, but I intend to once I graduate from college. Where should I begin looking for the best one, and how can I tell that they are good?”

Great question. Not only is it important to start investing early, but you should also make sure that you pick the right accounts to do it in.

That’s why I’m going to show you how to evaluate a good brokerage as well as give you my recommendations for which ones you should open.

• The 3 best IRAs of 2018
  • Vanguard
  • Charles Schwab
  • Ally
• How to find the best IRAs
• How to open an IRA
• What’s an IRA and why should I have one?
• REMEMBER TO INVEST!
• Automatic investing

The 3 best IRAs of 2018

Below are some of my favorite IRAs for 2018. When you’re done checking out the recommendations, be sure to keep reading to find out how you can set up an automatic system so you invest passively.

1. Vanguard

Click here to open an account

Vanguard is what I use — and they’re a fantastic brokerage due to their low-cost funds and great customer support. They’re a tried and true option when it comes to the investing world.

• No account minimum
• Automatic investing
• Most funds require a minimum $3,000 BUT there are funds you can purchase for as low as $1,000
• $20 account service fee BUT it’s waived if you sign up for their statement e-delivery service
• Commission-free ETFs when traded within your brokerage account

2. Charles Schwab

Click here to open an account

Schwab is a very reputable and reliable brokerage on top of offering one of the best checking accounts out there. Plus if you do have a checking account with Schwab, they’ll automatically link the brokerage account to it. Very handy for automatic investing.

• $1,000 minimum to open (waived with a $100 automatic monthly contribution)
• Automatic investing
• No maintenance fees
• No commissions for Schwab ETFs
• Great low-cost funds

3. Ally

Click here to open an account

Ally is an online bank — and they’re a great choice for anyone looking for an IRA. Since they’re online, they don’t have to deal with a bunch of overhead and pass their savings onto their clients.  

• No minimum opening amount
• No maintenance fees
• Low commissions
• Offers many other IRA products like IRA CDs and IRA Online Savings Accounts to add to your account.

How to find the best IRAs

Contributing as early and as much as possible is important since each dollar you invest will be worth much, much more with time.

To start, you’re going to need to open an investment brokerage account with a trusted investment company. Think of the “investment brokerage account” as your house, and the IRA as one of the rooms.

Although this account will probably hold only your IRA, you’ll be able to expand it to hold other accounts later (e.g., taxable investment accounts or additional IRAs for your spouse and kids).

When it comes to finding a good IRA, you need to look at three areas:

1. Low open fees

You’ll want to compare minimum required investments before you open the investment account. For example, some full-service brokerages require you to have a hefty minimum amount to open an account.

A while back, I called up Morgan Stanley and a representative recommended a minimum balance of $50,000.

 “Technically, you can open an account with $5,000,” she said, “but the fees would kill you.”

This is why you use a discount brokerage. Most do require a minimum fee of $1,000 to $3,000 to open an IRA — but sometimes they’ll waive it if you set up an automatic transfer fee. Which brings us to…

2. Automatic investment

The second thing you want to look for is an IRA that’ll allow you to automatically invest your money.

IWT is all about automation. It takes the pain out of investing yourself each month and allows you to put a financial system in place that’ll earn you money passively.

With an IRA automatic transfer, your brokerage will automatically take money out of your checking account each month and invest it where it needs to go.

Even if they don’t, that’s okay. You can set up a monthly automatic transfer so your money will grow without you having to think about it (more on that later).

3. Good features

You should also investigate the features of the account.

Will you have 24/7 customer service? Is the online interface easy to use? Are there reputable fiduciaries ready to answer any question you have? You should be able to call them up on the phone and get recommendations for people like you to invest.

While you should absolutely spend some time looking for an IRA with those three things, the important thing is you get started.

Yes, you could spend hundreds of hours doing a detailed comparison of the total number of funds offered, frequency of mailings, and alternative-investment accounts available, but more money is lost from indecision than bad decisions.

Just pick one of the three above and get started.

How to open an IRA

All of these places offer an excellent variety of funds to choose from, so you can’t go wrong with them.

Signing up is easy too. Follow the steps below to open one up today.

NOTE: Make sure you have your social security number, employer address, and bank info (account number and routing number) available when you sign up, as they’ll come in handy during the application process.

• Step 1: Go to the website for the brokerage of your choice.
• Step 2: Click on the “Open an account” button. Each of the above websites has one.
• Step 3: Start an application for an “Individual brokerage account.”
• Step 4: Enter information about yourself — name, address, birth date, employer info, social security.
• Step 5: Set up an initial deposit by entering in your bank information. Some brokers require you to make a minimum deposit so use a separate bank account in order to deposit money into the brokerage account.
• Step 6: Wait. The initial transfer will take anywhere from 3 to 7 days to complete. After that, you’ll get a notification via email or phone call telling you you’re ready to invest.
• Step 7: Log into your brokerage account and start investing!

The application process can be as quick as 15 minutes and will put you on your path to a Rich Life.

What’s an IRA and why should I have one?

An individual retirement account (IRA) is an investment account that gives you amazing tax advantages for retirement saving.

The two common types:

• Traditional IRA. This account allows you to invest pre-tax income. You’ll roll over your 401k into a traditional IRA whenever you leave a job. Currently, anyone younger than 70 ½ -years-old is allowed to contribute to a traditional IRA. Once you hit that age, you are required to take out a minimum withdraw each year that is a specific percentage of your funds.  
• Roth IRA. This account uses your after-tax money to invest, giving you an even better deal on your investment, as you’ll also pay no taxes on any gains when you withdraw on it. There are currently no age restrictions on a Roth IRA — however, there are income restrictions.

Currently, there’s a yearly maximum investment of $5,500 to both accounts ($6,500 if you’re more than 50 years old). A Roth IRA currently has an income limit of $135,000 for single tax filers and $199,000 for married couples joint filing. A traditional IRA has no such limits.

However, these limits change often, so be sure to check out the IRS contribution limits page to keep updated.

Though there are advantages to both IRAs we highly recommend you get a Roth IRA. It’s one of the best investments you can make as a young person. It’s simply the best deal I’ve found for long-term investing.

If Roth IRAs had been around in 1970 and you’d invested $10,000 in Southwest Airlines, you’d only have had to pay taxes on the principal amount. When you withdrew the money 30 years later, you wouldn’t have to pay any taxes on it…

…which is good because that $10,000 would have turned into $10 MILLION.

Overall, time is your best friend when it comes to your Roth IRA. And over many, many years, that’s an amazing deal.

REMEMBER TO INVEST!

An IWT reader wrote me about a conversation she had with her friend a while back. The friend mentioned she’d been contributing to her IRA for almost 20 years.

And then … she sent me this email.

“Wow that’s great!” I said. (The IWT reader.)

“Yeah, but it’s barely increased at all.” I felt a sinking feeling.

“You know you have to buy the funds right? It’s not enough to transfer money into an IRA, you have to choose the allocation.”

“What?” she said.

RAMIT, MY FRIEND HAS BEEN PUTTING MONEY INTO A ROTH FOR OVER 10 YEARS AND NEVER SELECTED FUNDS. IT’S A GLORIFIED SAVINGS ACCOUNT. SHE’S MISSED 10 YEARS OF INVESTMENT GROWTH WITH COMPOUND INTEREST. I DON’T KNOW IF I’M MORE ANGRY OR SAD.

Holy shit.

She’s right. Very few experts are ever crystal-clear in telling you that you need to actually INVEST your money when you have a Roth IRA (you can find these instructions in Chapter 7 of my book).

The worst part? The $3,000 her friend “invested” could have been worth more than $12,000 today. That’s $9,000 in EFFORTLESS money — and because it’s a Roth IRA, those earnings would have been tax-free.

You know I had to ask how her friend felt when she learned the truth.

“I feel kind of cheated,” she says. “I could have been earning more money for all of these years, yet no one ever told me about this important step.”

This is why I started writing IWT. This woman went out of her way to get educated. She went as far as opening a Roth IRA and even contributed thousands of dollars. But because she didn’t understand the tiny technical features of this retirement account, she lost out on $9,000 of tax-free earnings.

Should she take some responsibility for not knowing exactly how a Roth IRA worked? Of course.

But it shouldn’t be this hard. You shouldn’t have to be a financial expert to have your money do the right thing, just like I shouldn’t have to understand how a carburetor works to drive my car.

That’s why I wrote my New York Times best-selling book on personal finance — so you could use my financial system, and in six weeks, automatically make your money go where it needs to go.

Get your copy here.

So remember: An IRA is just an account. Once your money is in there, you have to start investing in different funds to see your money grow. I love target-date funds for most investors, which you can find in Chapter 7 of my book.

Invest in your IRA automatically

Finding a great IRA to begin investing is just the first step to saving for your future. If you REALLY want to build a financial system that’ll help you earn money passively, you need to automate your finances.

To help, I’ve created a 12-minute video on how to do exactly that. Just enter your name and email below and I’ll show you how to create a personal finance system that’ll save and earn you money passively for years to come.

The 3 best IRAs to open in 2018 is a post from: I Will Teach You To Be Rich.

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The Canada Child Benefit Explained

The Canada Child Benefit (CCB) is a monthly payment made by the Government of Canada to eligible families with children. Given the high costs of raising a child, this payment is a welcome boost to most family bank accounts. How do I get the Canada Child Benefit (CCB)? When you have a child and register their birth, you will be automatically assessed for the Canada Child Benefit. Typically your first CCB payment will arrive the month following your child’s birth month. For example, my daughter was born in August and I received my first CCB payment in September. You will then continue to receive the CCB on a monthly basis. The CCB is completely tax-free, and deposited directly into your bank account or mailed as a cheque to your home. I find my CCB payments are typically deposited in my bank account on the 20th of every month. How is the Canada Child […]

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Best money market rates and accounts of 2018

The best money market account will have two things:

1. High rates. While not the most important aspect, a high APY can help boost your savings in the long term.
2. Good features. A good money market account will allow you to easily access your money. That means convenient, easy-to-use web access and even things like checks and ATM cards.

These things combined allow you to save effortlessly while having easy access to your money. But with so many money market accounts out there, which do you choose?

Below are a few of my favorite money market accounts and rates for 2018.

Best money market rates & accounts of 2018

Capital One 360 money market account

I’ve always been a HUGE fan of the Capital One 360 savings account — and their money market account is no exception.

• No fees, no minimums
• 1.6% APY
• You can do everything online in an ultra-simple interface
• No annoying upsells sent via postal mail
• Links to your checking account via electronic transfer
• BEST PART: Multiple accounts (or sub-savings accounts)

Discover Bank money market account

Discover does all of its banking online and comes with an excellent and highly rated app to help with your banking needs. Not only that, but it also comes with a debit card and checks — though you’ll only be able to use them six times a month.

• 1.50% APY for balances less than $100,000 and 1.55% APY for balances more than $100,000
• $2,500 minimum balance and deposit
• $10 monthly fee
• 60,000 ATM network
• Debit card and checks

CIT Bank money market account

Aside from its crazy high APY, the CIT Bank money market account also requires a smaller minimum deposit than other banks. Adding to the draw is the lack of monthly fees as well. An all around great money market account.

• 1.85% APY
• No monthly fees
• Handy mobile app for convenient banking
• Minimum $100 to open for account

Ally Bank money market account

Ally is another online bank — and they’re a great choice for anyone looking for a solid savings account.

• .9% APY for less than $5,000 balance, 1% APY for $25,000 balance or more
• No fees, no minimums
• Can create multiple accounts
• Easy online interface
• Interest compounded daily

Like Capital One 360, Ally doesn’t technically have sub-savings accounts. However, it does allow you to create multiple accounts that effectively do the same thing.

.

What is a money market account?

At first glance, a money market account seems a lot like a glorified savings account — but that’s not a case.

Though they share a lot of similarities, the big difference is how easy it is to access your funds. In a savings account, you’ll typically need to wait three to five business days in order to withdraw or transfer your money.

However, money market accounts allow you to use ATM or debit cards to access your money. Often, you also receive check writing abilities.  

If a checking account and savings account had a baby, that baby would be a money market account. Only a money market account will typically have a higher APY than both checkings and savings, and is also FDIC insured.

There is a trade-off: Money market accounts often require a high minimum deposit and balance in order to maintain it.

The important thing to remember…

A money market account is great for anyone who values ease of access to their money — but also doesn’t mind having to maintain a minimum balance.

Let me offer you another word of advice though: Don’t chase rates.

This is important for a few reasons. For one, interest rates are variable. That means they are always changing depending on the economy. So even the rates I outlined above might change by the time you read this.

Also, the difference between rates is minuscule. So small that they’re not even worth your time.

Consider a 1% difference on a balance of $10,000. That’s just $8.33 a month (aka a latte win).

So if you write me and say, “But Ramit, XYZ bank has 0.2364% higher interest rate. LOL! U R WRONG!” I am going to (1) mock you, (2) make you my “troll of the week” on Instagram so everyone can join in.

Instead, you should be looking at three things when searching for a good bank:

1. Trust. This is one big thing Big Banks (e.g., Bank of America, Wells Fargo, Chase) lack. I know because I had a Wells Fargo account (aka Wells “Let’s open millions of fake accounts” Fargo) for YEARS because their ATMs were in my area — but I’ve since learned better. You can’t trust banks that do skeezy things like double charging you for using other ATMs or nickel-and-diming you through minimums and fees. Their offers should be clear and easy to set up.
2. Convenience. Your bank needs to be convenient — otherwise you’re not going to be able to take full advantage of it. You need to be able to get money in and out and also transfer it easily. You can make sure that a bank is convenient by browsing around its website and making sure that they have a reliable customer support team.
3. Features. The best high interest savings account is going to be the one with other great features like prepaid envelopes for depositing money, sub-savings accounts, and online savings goals tools.

Find a bank with those three things and you’re set for life. Once you do, it’s time for you to automate your finances to optimize your savings potential.

The importance of sub-savings accounts

A few of the accounts above offer sub-savings accounts, or at least the ability to create multiple accounts — and this is crucial if you want to be able to save for anything.

Here’s a screenshot of my old sub-savings accounts:

Using my automated personal finance system, I use monthly automatic transfers to funnel money into each of my sub-accounts. Now that these transfers are in place, I’m getting closer to each of my goals automatically, month after month, without having to remember to set money aside.

This is how people get rich “passively.” You don’t see the money when it’s automatically withdrawn from your checking account and shunted to specific savings goals — you will never miss it. However, a few months later, you’ll be amazed at how fast you’re accomplishing your goals.

By the way, it’s possible to simulate sub-savings accounts with any savings account (for example, by manually creating your own “sub accounts” in Excel).

But I like Capital One 360 and Ally because they just do it for me. Why give yourself another financial chore to think about? Don’t take more than five minutes deciding. Just pick one and move on.

I cover the use of sub-savings accounts in more detail in my blog post “Sub-savings accounts: How to save for anything in 3 steps.” It’s an incredibly powerful way to make your savings more streamlined and purposeful.

Automate your money market account

I. Talk. About. This. A. LOT. But that’s only because it’s the best way to invest, save, and earn money. This system allows you to automatically send your money where it needs to go as soon as you receive your paycheck.  

And it’s simple: Each month, your paycheck is automatically divvied up and sent exactly where it needs to go (pay bills, pay rent, invest, save, etc.) without you needing to touch it. This allows you to save for any goals passively, making it easier to save than ever.

Some spending recommendations for your system:

• 50%-60% fixed costs: This includes things like utilities, rent, internet, and debt.
• 10% investments: This includes your Roth IRA and 401k plan.
• 5%-10% savings: This is money that goes towards things like vacations, weddings, home down payments, and unexpected expenses.
• 20-35% guilt-free spending: Fun money! Spend this on anything you want from nice dinners to movies.

To find out more on how to automate your finances, check out my 12-minute video explaining it here:

If you want to cut down the time it takes to save for your goals even more, I have something for you:

The Ultimate Guide to Making Money

In it, I’ve included my best strategies to:

• Create multiple income streams so you always have a consistent source of revenue.
• Start your own business and escape the 9-to-5 for good.
• Increase your income by thousands of dollars a year through side hustles like freelancing.

Download a FREE copy of the Ultimate Guide today by entering your name and email below — and get on your way to accomplishing your savings goals.

Best money market rates and accounts of 2018 is a post from: I Will Teach You To Be Rich.

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10 Essential Steps to Make Money Flipping Houses

The following is a guest post by Valerie Clark from Your Payoff. Many people think real estate is a surefire way to get rich, and then are surprised when their home turns into a money pit. Valerie shares how to make money flipping houses. This is worthy read of anyone browsing fixer-uppers, whether to resell or fashion into their dream home! As I scrubbed a subfloor in a small, stuffy bedroom that a dog had used exclusively as a toilet, I thought to myself, “Gee, isn’t house flipping glamorous? Little did I know that it was the beginning of my journey toward a mortgage-free life! I didn’t initially set out to make money flipping houses. It all started with a job loss that forced my husband and me to move to a new city in 2011. A year later, we bought the most affordable house we could find. It was […]

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Minimum variance portfolio: Definition, examples, and breakdowns

A minimum variance portfolio is a portfolio model made up of investments that are volatile individually but are seen by some as low risk when put together.

This portfolio model might not be right for individual investors though. In fact, we don’t recommend you build a minimum variance portfolio especially if you’re a beginner.

But we believe that you should get a full look at what a minimum variance portfolio is before you make a decision.

• What is a minimum variance portfolio?
• Examples of minimum variance portfolios
• The most important thing when it comes to investing
• The simple solution: Lifecycle funds

Personal finance is FILLED with varying perspectives when it comes to these advanced topics. It’s important you understand how and why certain things are before you jump into them.

What is a minimum variance portfolio?

At its core, a minimum variance portfolio mixes investments with low correlation.

Correlation measures how much two investments move with one another. For example, a very simple minimum variance portfolio could be 50% stocks and 50% bonds, as they are two investments with very low correlation to one another (stocks are highly volatile where bonds are mostly consistent).

Finding the exact correlation (known as R² or “R squared” for you math wizards) requires advanced knowledge of data and mathematics, so we won’t get into it in this article. However, it’s good to know about its utility when it comes to minimum variance portfolios (and it’s a fun term to throw around at cocktail parties so you sound smart).  

Most minimum variance portfolios vary from a traditional portfolio mix of bonds and stocks. Rather than investing in a mix of low risk (bonds) and high risk (stocks), it’s a mix of highly volatile individual securities with low correlation.

The logic goes: By mixing a set of volatile securities that don’t tend to move with one another, an investor can hedge against losses while maximizing earnings.

Let’s take a look at a few examples of minimum variance portfolios now to see it in action.

Examples of minimum variance portfolios

If you had a portfolio that was 100% U.S. small-cap stocks, or 100% U.S. large-cap stocks, or 100% international market stocks, that would be considered a very volatile portfolio as those are risky investments individually.

Not a minimum variance portfolio.

However, if you had a portfolio that was:

• 30% U.S. small-cap stocks
• 40% U.S. large-cap stocks
• 30% international market stocks

… you’d hedge your risks since those investments have a low correlation to one another. That means that this portfolio is built on the belief that if small cap goes down, it likely won’t affect the international market.

A minimum variance portfolio.

Remember: You don’t necessarily need to have a mix of highly volatile investments to have a minimum variance portfolio. You just need to have low correlation between your investments. However, that’s what people refer to when they talk about minimum variance portfolios.

The most important thing when it comes to investing

Like we said before, we don’t recommend this for the typical investor. This is a highly advanced topic for investors who really want to get into the nitty-gritty of their portfolios.

The returns you stand to gain just aren’t worth building it — especially when there are simpler approaches to investing that will still help you get rich.

Instead, what we recommend is focusing on one of the most important things when it comes to investing: Asset allocation.

While it’s important to diversify within individual assets like stocks, it’s even more important to allocate across different asset classes like stocks, bonds, and cash.

When you invest in any one of those asset classes, it’s a dangerous game — especially over the long term. This is why asset allocation is so important.

When you consider how you want to set up your asset allocation, you need to think about the returns of each asset class. Higher risk generally means higher potential for reward.

This means two things:

• If you want to get rich quick, you’ll probably fail — and big.
• You need to have a variety of assets in your portfolio.

A 1991 study discovered that 91.5% of the results from long-term portfolio performance came from how the investments were allocated. This means that asset allocation is CRUCIAL to how your portfolio performs.

The simple solution: Lifecycle funds

Knowing that asset allocation is crucial, I highly suggest getting lifecycle funds (or target date funds).

These are funds that diversify and allocate your assets based on your age. As you age, they automatically adjust for you.

Example:

If you plan to retire in about 30 years, a good target date fund for you might be the Vanguard Target Retirement 2050 Fund (VFIFX). The 2050 represents the year in which you’ll likely retire.

Since 2050 is still a ways away, this fund will contain more risky investment such as stocks. However, as it gets closer and closer to 2050, the fund will automatically adjust to contain safer investments such as bonds, because you’re getting closer to retirement age.

These funds aren’t for everyone though. You might have a different level of risk or different goals. (At a certain point, you may want to choose individual index funds inside and outside of retirement accounts for tax advantages.)

However, they are designed for people who don’t want to mess around with rebalancing their portfolio at all. For you, the ease of use that comes with lifecycle funds might outweigh the loss of returns.

For more information on lifecycle funds, check out my three-minute video on the topic below.

I spent years getting my asset allocation right — and that’s why I’m happy you’re here.

If you’re interested in things like diversifying your portfolio, I want to give you something that can help you start building that portfolio today.

The Ultimate Guide to Personal Finance

In it, you’ll learn how to:

• Master your 401k: Take advantage of free money offered to you by your company … and get rich while doing it.
• Manage Roth IRAs: Start saving for retirement in a worthwhile long-term investment account.
• Spend the money you have — guilt-free: By leveraging the systems in this book, you’ll learn exactly how you’ll be able to save money to spend without the guilt.

Enter your info below and get on your way to living a Rich Life today.

Minimum variance portfolio: Definition, examples, and breakdowns is a post from: I Will Teach You To Be Rich.

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Why You Need An Emergency Fund of Stuff

Most financial gurus will suggest you build an Emergency Fund with enough cash to cover 3 to 6 months of essential expenses. I’m going to suggest you also start building a 3-month stash of household and personal goods. Initially, my Emergency Fund of Stuff was an accident. I signed up for Amazon’s Subscribe & Save and wasn’t sure how quickly I’d use up a product before I needed my next shipment. If I ran out of something, I’d pick it up from the local grocery store and then have extra when my Amazon order came through. If I received too much of something, I’d store the extra and adjust my timing for my next order. But then I decided I really like having extra on hand of essential items, and I hate running out of things, so then I set out to purposefully amass 3 months worth of essential personal […]

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What credit score is needed to buy a car

Your credit score needs to be as high as possible before you buy a car — ideally this means more than 740.

A credit score this high puts you in prime position to get the best interest rates with the added benefit of not having to worry about whether or not your loan will get approved.

You can also save massive amounts of money on your car loan if you have your credit score in check.

How much can you save? Let’s assume you have a credit score of 600. If you improved your credit score by just 60 points, you can save over $2,500 on your car loan.

Surprise! It pays to have good credit.

Improving your credit score can seem very daunting though — especially if you have a really bad one (<600). If that sounds like you, don’t worry. We have a system that can help you improve your credit score and get you an awesome deal on your loan.

• What is a credit score?
• What credit score is needed to buy a car?
• How to improve your credit score
• • Step 1: Delete your debt
  • Step 2: Keep your cards
  • Step 3: Decrease your credit rate
  • Step 4: Automate your finances

What is your credit score?

There are essentially two elements that make up your credit. They are:

1. Credit report. This is a comprehensive report that gives potential auto lenders basic information about you and your credit usage. This includes things like the number and type of accounts you have open, your payment history, and purchases you’ve made using credit.
2. Credit score. This is also known as your FICO score, as it was developed by the Fair Isaac Corporation. It’s a single number between 300 and 850 that tells lenders how risky you are to lend to. Auto lenders will look at this number, along with other pieces of info like your salary and age, and make a judgment on your interest rate and whether or not they’ll lend to you at all. That’s why it’s so important that you have as good of a credit score as possible.

Your score comes from the information found within your credit report.

The actual number is determined by the following information and their associated weight in relation to your score (credit score formula courtesy of Wells Fargo):

What your credit score is based on:

• 35% payment history. How reliable you are. Late payments hurt you.
• 30% amounts owed. How much you owe and how much credit you have available, or your “credit utilization rate.”
• 15% length of history. How long you’ve had credit. Older accounts are better because they show you’re reliable.
• 10% how many types of credit. If you have more lines of credit open, the better your score will be.
• 10% account inquiries. How many times you have or a lender has checked your credit background.

Your credit score will be within a range of 300 and 850. The range determines whether or not your score is solid — but a good rule of thumb is the higher your credit score, the better you’re off.

If you’re confused, don’t worry. Here’s a handy chart to help you figure out how good your credit score is.

It’s also ludicrously easy to find your credit score. In fact, you should do it after you read this article. I suggest starting at Credit Karma or Mint. They’ll find your credit score quickly after you enter in some basic information about yourself (e.g., name, birthdate, SSN).

What credit score is needed to buy a car?

Imagine you want to get a new car that costs $20,000. Your credit score is 680. Not bad but not spectacular either. You decide to put down $5,000 and take out a 48-month auto loan with a principal amount of $15,000. Take a look at how much your monthly payment would be.

48-month new car loan

FICO Score	APR	Monthly payment	Total interest paid
720 – 850	4.008%	$339	$1,259
690 – 719	5.387%	$348	$1,708
660 – 689	7.578%	$363	$2,435
620 – 659	10.411%	$383	$3,404
590 – 619	14.945%	$417	$5,018
500 – 589	15.922%	$425	$5,376

Source: MyFico.

Your monthly payment would be around $363 with a total of $2,435 in interest paid.

But do you know how much you could save if you took the time to improve your credit score from 680 to 720?

$1,176. That’s like getting 5.88% off the sticker price of $20,000.

For example, if your credit score was really bad (~500), you’d save $4,117 if you improved your credit score to 720.

You’d save even more if you’re taking out a used car loan, which typically has a higher interest rate than new ones. Check it out below.

48-month used car loan

FICO Score	APR	Monthly payment	Total interest paid
720 – 850	4.924%	$345	$1,556
690 – 719	6.6%	$356	$2,108
660 – 689	9.089%	$374	$2,948
620 – 659	11.509%	$391	$3,787
590 – 619	16.292%	$427	$5,513
500 – 589	17.549%	$437	$5,981

Source: MyFico.

Using the same principal amount as before ($15,000) we see that we stand to save $4,425 if we improved our credit score from 500 to 720. That’s a HUGE win.

How to improve your credit score

You need a good credit score to get a good interest rate on your loan. I won’t belabor the point.

So here are four things you can start doing today to get a great one:

1. Delete your debt
2. Keep your cards
3. Decrease your credit rate
4. Automate your finances

Step 1: Delete your debt

Debt is one of the most common factors contributing to a low credit score. It’s also one of the biggest barriers in the way of a Rich Life.

If you want to start earning, saving, and investing more, you need to be debt-free.

Luckily, we have plenty of resources to help get you there. Check them out below.

• The five steps to get out of debt fast
• Pay off your credit card IWT style
• IWT debt calculator

If you want even more insights on getting out of debt, check out my (very) old video on negotiating your debt.

Step 2: Keep your cards

It’s easy to think that since credit cards are often the source of debt, they need to be canceled in order to get a hold of your finances. That is a myth. Pure and simple.

15% of your credit score is determined by your credit history. That means every credit card account you close is going to negatively impact your credit history.

It also affects your credit utilization rate, which is crucial to getting a great credit score (more on that later).

Of course, there are going to be times when you need to close a credit account. Maybe you can’t afford the yearly fees. Maybe the APR is too high. That’s fine … BUT if you’re planning on applying for a car loan, consider holding off on closing the account until AFTER you get the loan. You want as much credit as possible going into the application process.

Also be sure to put a recurring charge on the ones you don’t use that often. This shows that your card is active and keeps your credit history healthy.

Step 3: Decrease your credit rate

This is also known as the amount you owe, and it impacts 30% of your credit score.

Figuring out your credit utilization rate is simple:

(how much you owe) / (total credit available)

The lower this number is, the better it is for your credit score.

For example, let’s imagine you have $1,000 in debt on two different credit cards. Each card has a $2,500 credit limit. How much is your credit utilization rate?

$1,000 in debt / $5,000 of total credit = .20 or 20%

That means your credit utilization rate is 20%. However, if you closed one of those cards, your credit utilization rate would jump to 40%!

The lower your credit utilization rate is the better. That shows auto lenders that you don’t spend all of the money you have in your available credit — indicating you probably won’t default on your loan and they won’t lose money.

There are two ways to improve your credit rate:

1. Don’t carry a lot of debt on your credit cards.
2. Increase the amount of credit available to you.

We’ve already hit the first part — so let’s take a look at a script to help you negotiate your credit limit with your card company:

YOU: Hi, I’d like to request a credit increase. I currently have $5,000 available and I’d like $10,000.

CC REP: Uh … why?

YOU: I’ve been paying my bill in full for the last 18 months and I have some upcoming purchases. I’d like a credit limit of $10,000. Can you approve my request?

CC REP: Okay. I’ve put in a request for an increase. It should be activated in about seven days. Anything else I can do for you?

Use this script to get a credit limit increase every six to 12 months. Only do this if/when you’re out of debt though.

Step 4: Automate your finances

Ahhh automated finances. This is my system to help get you out of debt, save for any huge purchase, and invest passively.

And since 35% of your credit score is determined by your payment history, it’s important to automate your system so you pay your bill on time and in full each month.

For more information on how to automate your finances, check out my 12-minute video where I go through the exact process with you.

Get the first chapter of “I Will Teach You to Be Rich” for FREE

To help you even more, I’d like to offer you something: The first chapter of my New York Times best-seller, “I Will Teach You to Be Rich.”

It’s all about credit cards and it’ll help you tap into even more perks, max out your rewards, and beat the credit card companies at their own game.

I want you to have the tools and word-for-word scripts to fight back against the huge credit card companies. To download it free now, enter your name and email below.

What credit score is needed to buy a car is a post from: I Will Teach You To Be Rich.

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How I Shed Nearly $50,000 of Debt in Less Than 2 Years!

The following is a guest post by Eric from Finances With Family.This is an awesome story of triumph over the worst possible kinds of debt — I’m talking payday loans and gambling debts, on top of credit cards and student loans! If you need a dose of inspiration for getting rid of huge debts fast, this is exactly what you’re looking for. Enjoy! Debt is something that is so easily accumulated, and once owned is incredibly hard to get rid. I found this out the hard way. My first run-in with the monster of debt was through student loans. My parents had been funding my in-state tuition but stopped when my grades dropped halfway through my junior year. However, I had been taught that a college education would provide me with a good paying job. I believed that order to make something of myself, I needed to obtain that piece […]

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Why Your Savings Strategy Needs GICs

**This is a sponsored post written by me on behalf of EQ Bank. However, as always, all opinions are my own. Guaranteed Investment Certificates (GICs) are an awesome way to save for a financial goal with a specific timeline. These are super-safe cash investments that offer better returns than savings accounts. What are GICs? GIC stands for Guaranteed Investment Certificate and is a type of investment that has both a fixed term and a fixed return. For example, you might buy a 5-year GIC that pays 3.50% interest. This means in order to get the 3.50% interest on the cash you invest, you cannot touch your principal for the 5-year term. GIC terms can range anywhere from 30 days to 5 years. Typically, longer terms offer higher interest rates as an incentive to keep your money invested longer. When a GIC term is completed, it is said the GIC has “matured”. […]

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