Investment

Google reportedly launched an AI investment program

Google has reportedly launched a new program to support promising AI ventures. The initiative will provide services ranging from mentorship to workspace, according to Axios.

The most promising startups or projects may receive co-investments from the new initiative and Google Ventures ranging from $1 million to $10 million.

A Google spokesperson declined to comment.

The new initiative could have something to do with Google’s recent acquisition of…

89% of CIOs are investing more heavily in innovation due to uncertainty

Nine out of 10 chief information officers are investing more heavily in innovation, according to an annual survey by recruitment firm Harvey Nash Group and accounting firm KPMG.

Two-thirds (64 percent) of organizations are adapting their technology strategies in the midst of unprecedented global political and economic uncertainty, the survey found.

More than half of the respondents (52 percent) said they are investing in more nimble technology platforms. It is clear digital strategies have infiltrated businesses across the globe at an entirely new level. The proportion of organizations surveyed that now have enterprise-wide digital strategies increased 52 percent in just two years, and organizations with a chief digital officer have increased 39 percent over last year.

“From an organizational and cultural perspective, the CIO is now faced with a full transformation to digital, enterprise-wide,” said Harvey Nash president and CEO Bob Miano in a statement. “Digital is without question the CIO’s priority, but especially for legacy organizations, leading this change to a complete, unified digital strategy is top of mind. CIOs are responding by tackling this head-on with innovation and agility.”

To deal with that change, companies are increasing their demand for enterprise architects — the fastest growing technology skill this year, up 26 percent compared to 2016.

Cybersecurity vulnerability — as demonstrated by the latest ransomware case — is at an all-time high, with a third of IT leaders (32 percent) reporting their organization had been subject to a major cyberattack…

Don’t Let Outdated Money Advice Endanger Your Money

We’ve all received unsolicited financial advice, often from well-meaning relatives and friends. In many cases, this advice is useful. But a lot of “classic” personal finance advice simply hasn’t aged well, and is now viewed as flawed. It’s just not applicable anymore in today’s world.

Before you blindly accept any money advice you receive, be sure to do some additional research to find out if the advice is outdated. Here are nine examples of financial tips that may no longer apply.

“Find a good employer and stay forever”

Many of us know an older relative that began working at a company as a teenager and then retired from that same firm four decades later. Often, they walked away with a sizable pension and even health benefits for life. (See also: If You’re Lucky Enough to Receive a Pension, Here Are 6 Things You Need to Do)

This doesn’t happen much anymore. Job security is not what it once was. A decline in labor unions means that guaranteed annual pay increases are a thing of the past. And a pension? Forget it.

There’s a lot of evidence now that switching jobs periodically will result in higher pay increases. And with the introduction of 401(k) plans, retirement savings are portable when your employer changes.

“Pay off all of your debt as soon as you can”

This is not so much “bad” advice, it’s just less than ideal. Yes, it’s a fine goal to remain as close to debt-free as possible, but in the current environment, carrying some kinds of low-interest debt may be more beneficial for you in the long run.

Let’s say you have a 30-year fixed-rate mortgage and were fortunate enough to lock in a low 3.5 percent interest rate. Let’s also say stock market returns are averaging 7 percent per year. Over time, you’re going to be better off using any extra money you have to invest in stocks rather than pay off your loan early. Generally speaking, if your investment returns outpace current interest rates, there’s not much incentive to pay off debt early.

“Technology is a fad”

There was a time when some of the most savvy investors dismissed many tech stocks because they didn’t understand them. The bubble collapse of advertising-dependent dot-com companies in the late 1990s didn’t help the image of this sector. But there’s no denying the fact that investing in technology companies with solid business models has been a clear path to wealth in recent years.

All you need to do is look at the incredible returns for companies like Amazon, Apple, Netflix, Facebook, and others. A full 15 percent of companies in the S&P 500 are technology companies, and they comprise most of the companies traded on the NASDAQ.

Tech stocks are still notoriously volatile, but if you ignore the sector completely, you’re ignoring some…

We Do the Math: Save for Retirement or Pay Off Credit Card Debt?

Should you save for retirement or pay off credit card debt? If you’re carrying a card balance, you may be wrestling with whether to put all your resources into attacking the debt, or start building your retirement nest egg while you slowly pay off debt.

Which one will give you a better net worth? There’s no simple answer. For some people the situation may warrant clearing credit card debt first; for others, it’s better to start investing right away. To figure out which scenario is better in a given situation, we’ll need to do some math. Don’t worry, we’ll show you how to do it in a few easy steps.

Step 1: Gather important numbers about your debt and your retirement plan

First, look through your credit card statements and accompanying information to pull up the following numbers:

  • Credit card debt. You’ll find this on the front of your credit card statement.
  • Credit card interest rate, or APR (Annual Percentage Rate). You’ll find this further down on your statement, in a section labeled “Interest Charged” or something similar.
  • Minimum payment. You’ll find this in your card’s terms and conditions, under a discussion about how minimum payments are calculated. It will probably be a percentage, but there may also be a flat sum.

Next, consider any retirement plan you are enrolled in or have available. What is the average annual return? You can identify past returns by reviewing your retirement account statements. For example, your 401(k) plan account may list your annual return. Note that past returns don’t guarantee or predict future returns, but we’ll use the average annual return as a proxy for future returns in this case, knowing that if our portfolio takes a long-term downward turn, our calculations will change.

Finally, how much extra do you have in your monthly budget that you could put toward credit card payments, retirement investments, or both?

Follow along as we consider a hypothetical debt situation and retirement opportunity. Let’s say there’s $500 in our monthly budget, which equals $6,000 annually ($500 x 12 months = $6,000) to put toward debt or retirement.

Currently, the balance on our credit card is $5,000. Our APR is 22%. Our minimum monthly payment is 3% of our outstanding balance or $25, whichever is greater.

Our employer offers a 401(k) plan. For the sake of keeping this illustration simple, we’ll say our employer doesn’t match employee contributions and we choose to make taxable contributions with a Roth designated account within the 401(k).

In reality, you might choose instead to make tax-deductible contributions to a traditional retirement account. With a Roth 401(k) there are no immediate tax benefits, which makes our calculations simpler and therefore better suited for this purpose.

We’ll say the default investment in our 401(k) is a target-date mutual fund with an average annual return of 6.3% since its inception. We know that future performance is unpredictable. But to run the numbers for the retirement vs. debt decision, we’ll apply an annual return of 6% to our retirement account.

We’ll look at the retirement account and credit card balance after five years to compare the two choices: 1) making minimum payments on our card balance so we can start investing right away, or 2) putting all our extra money toward our credit card debt before we consider retirement investing.

In both scenarios, we’ll assume that we won’t make additional charges on our credit card. In addition, we’ll contribute to our retirement account when we have money available to invest.

Step 2: Calculate net worth if you prioritize retirement savings over paying off credit card debt quickly

In this scenario, we’ll see what happens if we only make minimum payments on our credit card so that we can get started investing for retirement right away. Your credit card statement should state very clearly how long it will take to pay off your balance if you make minimum payments.

You can also find an online calculator to help you with these calculations. Here’s the information we’ll enter for our example (you can put in your own numbers from your real-life situation):

  • Current credit card balance: $5,000
  • Annual percentage rate: 22%
  • Proposed additional monthly payment: $0

LEGO Reaches 100% Renewable Energy Goal 3 Years Early

After expending almost $1 billion in investments, LEGO has finally achieved its target of balancing 100% of the energy used by all of its factories, offices, and stores worldwide, with clean renewable energy three years earlier than anticipated.

Their most recent investment was buying a 25% stage in the Burbo Bank Extension wind farm, which helped them reach the goal that they set in 2012: funding over 160 megawatts of sustainable energy development worldwide.

RELATED: Colombians Are Building Houses Made of Wasted Plastic—Shaped Into Huge Lego Bricks

The Liverpool,…

Passive Income Streams: What They Are and Where to Find Them

Passive income is money received on a regular basis that requires little effort to maintain. Sounds great, doesn’t it?

passive income

Generating passive income is a great financial goal because it’s a smart way to build wealth. One thing to realize is that creating passive income requires an upfront investment — whether it’s money or time. You’ll need to be committed in order to be successful at creating a passive income stream. Here are three passive ideas and how they work:

Idea #1: Investing

Investing is a tried and true way to make passive income. Of all the passive income ideas, investing is probably one of the most passive. The most significant investment you’ll make is your money upfront. There isn’t much upkeep after that.

Whether you’re starting out with $1, 000 or $100, 000, you can make money in the stock market. The important thing to know is that investing doesn’t come without its risks. The value of your stock portfolio will continue to fluctuate as long as you own it. If you’re in it for the long haul, however, you can ride out those fluctuations and see profits over time.

There are many methods for investing your money in the stock market. One way is to invest in dividend-paying stocks. A dividend is a payout some companies provide to shareholders on a regular basis. Dividend yields vary from company to company, so keep that in mind.

It’s important to not merely go after stocks with the highest dividend yield. Instead, focus on companies that have a proven track record of increasing dividend payouts over the years. You can either receive your dividend payouts as cash or choose to reinvest them in the same stock. The latter is known as DRIP, a dividend reinvestment plan.

One way to invest your money that doesn’t involve the stock market is peer-to-peer lending. Peer-to-peer lending involves funding personal loans to borrowers through an intermediary like Prosper or LendingClub. As a lender, you make money through interest payments on the personal loans.

Although peer-to-peer lending doesn’t have the risk of stock market fluctuation, your money isn’t completely secure. Borrowers have the ability to default on loans. To mitigate this risk, you can diversify your portfolio with multiple personal loans. You can also review personal loan requests and decide which ones you’d like to fund. For example, you can review criteria such as credit worthiness and the reason for the loan.

Idea #2: Rental…

9 Expensive Mistakes of the Newly Retired

Transitioning to retired life on a fixed income will undoubtedly have a few bumps in the road. This is a brand-new chapter of life for you, and it’s reasonable to expect some challenges ahead. The last thing you want to do, however, is compromise your nest egg with costly, easily avoidable mistakes. After all, you need that money to get you through the rest of your life.

As such, consider these costly mistakes of the newly retired so you don’t follow suit.

1. Not balancing your portfolio

Retiring doesn’t mean you have to stop investing. You can still dabble in the stock market, but perhaps not as aggressively as you once did. Risky bets could cost you your life savings, which means that you’ll either have to go back to work past age 65, or put your hat out on a street corner. Neither of those options sound great in the golden years of life, so it’s important to ensure your retirement portfolio is balanced.

“Annuitizing a significant portion of one’s retirement income can complement a portfolio of stocks and bonds,” says Jim Poolman, executive director of the Indexed Annuity Leadership Council. “Fixed indexed annuities (FIAs) can serve as part of a balanced financial plan because they do not directly participate in any stock or equity investments and [they] protect your principal from fluctuations in the market.”

2. Not changing your lifestyle after retirement

Your spending habits as a retiree will need to change if you’re going to make it for the long haul. This is especially true if you’re not receiving any kind of monthly payments, like Social Security or disability, to help with bills. You can live off what you have in the bank (hopefully; otherwise you shouldn’t be retiring yet), but you may have to downsize and rethink your spending strategy.

This means you need to start learning how to save money on everyday expenses, and re-evaluate your budget to find places for cuts. Don’t expect yourself to suddenly drop 30 percent or more of your spending. Work your way to it by making small cuts at a time before you retire.

3. Not evaluating risk

When you start saving for retirement, you may have a certain monetary goal in mind — either based on what financial sources have told you, or what you’ve calculated you’ll need based on your lifestyle. But you may not be accounting for the ups and downs of Wall Street and inevitable inflation.

“Revisit your retirement plan to make sure your savings reflect your new needs, and adjust for market conditions,” Poole advises.

4. Spending too much money too soon

When you retire, what you have is what you have. Unless you still have income coming in somehow, you have to…

6 Money Moves to Make If Your Net Worth Is Negative

One of the most illustrative financial figures to know is your total net worth. This is the value of all of your cash and assets, minus your debts. For many people, that figure is below zero.

Building a high net worth should be the ultimate goal of anyone seeking financial freedom. If your net worth is less than zero, consider making these moves ASAP. (See also: 10 Ways to Increase Your Net Worth This Year)

1. Reduce your spending

One of the most direct ways to end up with a negative net worth is to spend more than you earn. Cutting unnecessary expenditures is the first step in having a net positive income each month. This can mean some tough choices, like eliminating cable, eating out, and your annual vacation. It may also require more extreme measures, like getting by without a car.

You can help yourself by tracking your spending meticulously in a budget so you know where money is going each month. Even if you think you are already living frugally, there’s a chance you can find savings just by taking a closer look.

2. Pay off your high-interest debt

If your net worth is negative, it may be partially due to high interest credit card debt and other loans. Interest can quickly pile up and eventually overwhelm your earnings, putting you in negative net worth territory. Tackling debt starting with the highest interest rate first is called the avalanche method, and this can save you a lot of money on interest payments in the long run. Sometimes, even paying off just one credit card can make a huge difference in your financial situation. (See also: The Fastest Way to Pay Off $10,000 in Credit Card Debt)

3. Bring in more…

What You Need to Know About the Easiest Way to Save for Retirement

If you have a 401(k), chances are you’ve been given the option to invest in a “target-date” fund. This is a balanced mutual fund that gradually changes its investment mix depending on how close you are to retirement. It’s designed to hold a higher percentage of riskier, growth-oriented investments like stocks when you’re young, and increase the proportion of more conservative investments, such as cash and bonds, as you age.

Many brokerage firms offer target-date funds, which come with names like Fidelity Freedom 2050 or Lifepath Index 2045. The idea is to pick one associated with the year you expect to retire.

There are advantages to these funds, especially for those who don’t want to spend a lot of time managing their investments. But there are some drawbacks, too.

Pros

Let’s start with the upsides.

1. They automatically rebalance

Target-date funds are designed to build wealth while you’re working, and protect it as you approach retirement. They accomplish this by gradually and automatically changing the investment mix over time, which is referred to as rebalancing. Because it’s not particularly easy for the average investor to make these kinds of changes on their own, a target-date fund offers the convenience of “set it and forget it,” saving you time and extra work.

2. They are easy to select

Picking which mutual fund is right for you is tricky, because there are often so many choices. There are funds for specific industries, funds for growth, and others for income — it can be overwhelming. When choosing which target-date fund is right for you, though, all you need to do is pick one that lines up best with the year you expect to retire. So if you are now 30 years old and plan to retire at age 63, you would pick a fund labeled with the year 2050.

3. They offer diversification

Most target-date funds are essentially “funds of funds.” In other words, they are comprised of a mix of mutual funds, which are…