Low-Risk Investments that Yield Worthy Returns

While most investors will stay away from day trading or trying to find a short-term investment that booms in a very short time, many still want a good yield on a safe investment. Usually, you’ll hear that risk is proportional to reward in that the more risk you take, the more reward you get. Now the important thing to keep in mind is that there is no such thing as a risk-free investment because whether you’re talking about market changes, inflationary risks, or even political-related risks, any one of those things could affect an investment. But there are a few investments that will usually bring in pretty good returns while not putting your portfolio in jeopardy.

Preferred Stock Investments

Not all stocks are the same, and generally, they’re classified as either preferred or common stocks, though there are even more categories within these. The advantage of owning preferred stock is that you can own a piece of a company if you want to do so without being heavily involved in it. You also have priority for dividend payments if the company is doing well and makes them, and you also could still recover your principal investment if the company has to liquidate its assets, although bondholders still have the top priority in this. The disadvantage is that preferred stocks can be more influenced by the Fed’s interest rate movement, but they still tend to have higher returns than most bonds.

Established Bond Fund Investments

The bond market can be a little trickier than the stock market, and one of the risks that come with it is liquidity, or being able to sell bonds when you need to. With bond funds, which are mutual funds that have a variety of bonds in their portfolio from corporate bonds to municipal bonds, there’s a chance you may have higher yields than most “safe” bonds while still having about the same level of risk. This is because some of these mutual funds in the bond market are made up of high-yield below investment grade bonds, but they’re also balanced out by investment-grade corporate bonds or low-risk government bonds. The bottom line is you don’t have to relegate your investments to US Treasury bonds to have low risk in the bond market.

REIT Investments Or ETFs Based In REITs

A real estate investment trust (REIT) can be a good asset to add to your portfolio that doesn’t require as much hands-on work with real estate. If buying individual REIT shares is too much for you, you can invest in them through an exchange-traded fund (ETF). Now compared to the stock and bond market, there can be a little more risk to REITs, and events like what happened in 2008 are reasons you shouldn’t put too many eggs in this basket. But they can have huge rewards such as being required by law to pay out 90℅ of their income in dividends. Also, they can be a hedge at times against inflation, and they can perform well when the Fed’s interest rates are low without the volatility of stocks. If stocks, bonds, mutual funds or other ETFs aren’t looking too attractive at the moment for you, a REIT may provide a great alternative.

This article was originally published on YoussefKabbaj.com

How to Get the Most Out of Your 401k

One of the best vehicles for building wealth is a 401(k) plan. Those who have employers who offer these plans should be happy, and should an employer offer to match some of the contributed funds, employees should be very happy. A 401(k) plan has tax advantages. For traditional plans, the contributions can cut a person’s taxable income. Roth 401(k) plans allow for tax-free withdrawals as long as the withdrawals take place after age 59 1/2.

Most workers can contribute $19,000 annually as of 2019 while those who have reached age 50 can add another $6,000 to their accounts. Maxing out an account might seem like a daunting task. However, with enough planning, it can happen. Here are some steps to take to max out a 401(k) account.

Take Advantage of Tax Breaks

By allowing for the deferral of taxes, a 401(k) plan provides tax efficiency. Every dollar that gets saved in a traditional 401(k) account is exempt from taxation in the current year. Therefore, a saver will get the full benefit of each dollar of income saved. For example, a person with a 22% marginal tax rate would be able to save more than 92% of each dollar in a 401(k) after accounting for FICA taxes while a person saving in an ordinary taxable account would be able to save only 70% of each dollar when accounting for FICA and income taxes.

Make Savings Automatic

Putting money into a 401(k) plan through direct deposit is the way to go. Those who never see the money hit their checking accounts will not be tempted to spend it. Additionally, people tend to adjust their level of spending in relation to how much they take home each month.

Increase Savings Incrementally

Many people will get performance bonuses or a cost-of-living increase in their paychecks. Those who find themselves in this position should use at least some of the extra income toward 401(k) savings. Over time, these increases will add up and make maxing out a 401(k) more likely.

Take on a Side Hustle

With a few exceptions, not every dollar of income has to come from one employer. By taking on a side hustle, it can be possible to increase income. This additional income should go toward saving rather than spending. When used properly, money from a side hustle could do much to offset 401(k) contributions from regular income. This could make maxing out a 401(k) much more feasible.

This article was originally published on YoussefKabbaj.com

Tips to Help You Start Your Own Philanthropy

Philanthropic giving is an idea that is gradually gaining traction in society today. Businesses and individuals are equally channeling more contributions and donations to charity. Charity organizations are also being founded for various causes, old and new. What does it take to establish a successful philanthropy?

Setting the foundation

The first step involves setting foundations that help govern the philanthropy. Just like in any other establishment, you must have a clear vision and goal or objective to achieve at the end of the day with your philanthropy. The goal gives you the focus in terms of who you intend to reach out to. All these should be put down on paper.

Incorporation

The second step involves incorporating the philanthropy as a legal entity within the society. The incorporation process may vary from state to state and country to country. You should endeavor to understand the legislation and legal requirements for establishing a charity foundation in your area. Among the universal steps in this process include setting an appropriate name for the group, drafting articles of incorporation, naming the board members, as well as paying the necessary fees for incorporation.

Setting financial guidelines

Every philanthropy operates as a non-profit organization. The organization, at this stage, should have a well-founded financial policy, which details important aspects as regards money. Some of the important areas to pay attention to in this regard include how the organization intends to raise funds and the distribution of funds across various channels of charitable projects in the society.

Internal administration and staffing

Another important area to ensure that your philanthropy runs smoothly is setting in place a strong internal administration. Whereas the philanthropy operates on a non-profit basis, it may be essential to bring onboard permanent employees for key positions, such as manager and accountant. The rest can be brought onboard on a volunteer basis. In either case, it is highly advisable to consider working with individuals who are passionate about charitable giving and who are willing to share in your vision.

Progress evaluation

After successfully launching the non-profit organization in the market, the last progressive step involves steering the philanthropy in the right direction to ensure it achieves its objectives. This is quite a tedious and intensive process, which requires commitment in terms of resources and time. Patience is necessary for the philanthropy to gain traction and realize meaningful goals.

This article was originally published on YoussefKabbaj.org

Staying Motivated at Work During the Holidays

Staying motivated in the workplace can be a challenge, especially during the holiday season. However, the show must go on. Regardless of your industry, it is essential to remain focused on your work and execute your responsibilities with efficiency. Even though you may be looking forward to enjoying the holidays this year, ensure that you have created a work life balance that allows you to succeed at work, while experiencing the joy of the season.

Organize Your Responsibilities

At the start of your day, write a list of all of your work responsibilities. By jotting down these essential tasks, you will be better able to manage your workload. Instead of multitasking, you can focus on completing one goal at a time. By doing this, you will avoid feeling overwhelmed by work duties in addition to holiday pressure.

Keep Work and Home Separate

Leave work at work. If you take your work home during the holidays, you will become less motivated during your regular workday. Instead, be sure to create boundaries between your professional and personal responsibilities.

Eliminate Distractions

Don’t shop online, while you are working. Leave the holiday gift shopping for when you are off the clock. Tell your family and friends to respect your work time, which means that you should avoid answering unrelated work texts, emails, calls and direct messages during work hours, according to Forbes. In addition, if listening to holiday music at your desk causes you to get distracted, change your playlist to instrumentals or choose a non-holiday music selection.

Set Deadlines and Rewards

It’s easy to fall behind during the holidays if you don’t prioritize. By creating and adhering to both soft and hard deadlines, you can prevent yourself from losing sight of your calendar and important tasks. Additionally, once you successfully meet your deadlines, you should treat yourself to a reward as an incentive. Be proud of your small and large accomplishments so you can maintain a high level of motivation throughout the season.

Communicate and Be Honest

If you think that you need more time on a project, communicate with your needs with your management. It is essential that your team understands what you need to be effective in your role. If the holidays typically present a more complex timeline with production or execution, you should always be honest to properly set and meet expectations. You should also communicate with your family and friends and be transparent about what you can and cannot accomplish during the holidays.

Even though the holidays can be tricky to manage, it is a wonderful time of year. If you set your mind to creating firm boundaries in your life, then you will be able to succeed at the workplace during this season. Your dedication to success could even motivate a coworker or two.

This article was originally published on YoussefKabbaj.net

Youssef Kabbaj Covers the Different Styles of Leadership

As a leader, it can be challenging to identify what style works best for you. You may have adopted a technique from someone that you worked under, or that you have heard or read about. If that style works, you tend to stay with it. However, based on your work environment and personality, it may not be the best approach. Having an understanding of different styles of leadership can help you to become a more effective leader.

Youssef Kabbaj is a leader in the financial industry, gaining invaluable experience by holding various positions with many of the world’s most well-known companies. With years of knowledge and insight as a leader, Youssef provides his expertise on the different styles of leadership.

Transformational Leadership

Transformational leaders work with their teams to identify needed change and motivate the process through inspiration. These leaders create an environment that promotes analytical thinking and questioning.

Servant Leadership

Do you always go above and beyond to address the needs of your team? Servant leaders always put the needs of others as a top priority. Servant leaders are not afraid to delegate power and help their subordinates perform at the highest level possible.

Transactional Leadership

These leaders value order and structure within their teams. Their followers are expected to be self-motivated and focus on results. This leadership style works best for employees who have clearly defined roles and are motivated by incentive systems.

Laissez-faire Leadership

These leaders give the least possible guidance to subordinates and believe that people excel best when they are left alone to respond to their responsibilities and obligations. The followers make their own decisions and rules.

Autocratic Leadership

Do you like to be in complete control of your team? Autocratic leaders take control of all decisions and little input from group members. This style can work best with smaller groups where leadership is non-existent.

Charismatic Leadership

If you have a strong and likable personality, charismatic leadership may be right for you. This style relies on effective communication and persuasion to drive desired behaviors.

Situational Leadership

This strategy is an adaptive leadership style. Leaders can choose the method that best fits their goals and environments. You’ll be able to build a rapport with others and bring out the best in them.

As you will experience in any industry you work in, each style of leadership is unique in the qualities that a manager can deliver for a team. Understanding the different leadership styles will allow you to implement your skills to get your team performing at its best.

Originally published on ThriveGlobal.com

Why Philanthropy is Good For Business

Philanthropy not only serves as a way to uplift a community, but it’s also good for business. Companies all around the country have implemented charitable giving and volunteerism into their social responsibility policies. These organizations realize that philanthropy is good for business for the following reasons, and have benefitted immensely from adapting them into their culture.

Improves the Image of the Business

Good branding is essential to the success of any business. Philanthropic endeavors such as volunteering ensure that the public will associate the brand with positivity and community involvement. Viewing the company in this way will endear the public to the brand and increase the likelihood that the public will purchase goods and services from the business. Shareholders and potential investors also want to know that the business is giving back to the community.

Establishes Relationships With Potential Clients

Community involvement and volunteering are also essential because it allows a business to build relationships with potential clients. Volunteering allows companies to build networks with people who share similar values and may result in the development of business relationships in the future. This type of networking is extremely valuable and can be difficult to quantify. However, most successful businesses understand the importance of nurturing such relationships through community engagement.

Assist With the Recruiting and Retaining of Employees

When recruiting new employees, the consistent and far-reaching philanthropic endeavors of a company may set it apart from the competition. As such recruits may be more likely to accept a position with a company that is committed to helping the less fortunate. Additionally, philanthropy is good for the morale of employees.

The people that work for a company want to know that they will also have the opportunity to give back to their community. A recent study found that 74% of employees reported finding more fulfillment while working when they were also able to volunteer through opportunities presented by the business. The study also found that more than 50% of employees will not work for a company that isn’t dedicated to community engagement.

Businesses should seek to have meaningful and effective community engagement. In doing so, the business will improve its image, attract stellar employees, and establish relationships with potential clients. Philanthropic work is not only beneficial to society but to the individual businesses that endeavor to assist others in their time of need.

This article was originally published on YoussefKabbaj.org

Embracing AI’s Impact on the Financial Industry

As Artificial Intelligence (AI) empowers any industry that can be touched by computers, the financial sector needs to both embrace and protect itself from tech advances.

There’s a massive opportunity for wealth when it comes to streamlining financial data, but there are opportunities to manipulate the rules–or even create bad exceptions to the rule. Manipulation can happen in high-tech ways that tech novices aren’t likely to question because they don’t know what they’re reading.

AI-Powered Credit Decisions

Credit decisions need to lack human bias. Whether they’re conscious of their bias or not, people may make decisions based on a name, someone’s appearance, or details about someone’s life that triggers the decision-makers’ stigma. It’s not about being hostile on purpose; unconscious bias can create negative, but unnoticed decisions that trickle down into incorrect decisions.

AI is a driving force in removing as many points of unconscious bias as possible. Lenders can instead generate raw data about details that matter to financial decisions, such as credit history, income, the intended purchase, market pressures, and other details. That said, what if some bias points are right? This is hardly a justification for some of the worst examples of bias that step into unjustified bigotry, but what if a team wants to analyze related data that seems unrelated.

Until proven, that data shouldn’t be factored into an automated decision. However, a separate set of analyses that consider the removed factors alone, the financial sector-approved factors alone, and then those factors together for experimental decisions can be done. This grinds out many instances of unconscious bias, delivers information for the curious, and makes it harder for intentional discrimination by putting a brighter spotlight on fewer individuals who make the final call–all while making that final call easier to make.

Fraud Prevention in the Automated Age

Detecting fraud is about more than catching obvious thieves. Crime and justice are constantly evolving after each other, with innovative methods of stealing coming from innovative ways of catching a crime. AI is at the frontier for everything, crime and justice included.

For fraud prevention, the financial sector has common theft to handle in bulk and innovations in fraud. For standard instances of fraud that are simply written off as losses, fraud prevention simply needs to detect known patterns and flag them for review. That kind of flagging automation is where automation and AI thrive, and represent the proven, standard use for AI in the business world. You know what the problem is and you know how to find it, so you build or buy AI that can detect it.

Concerned about catching the wrong people? You don’t need to program AI to flag and penalize people. AI can simply become the system that helps your fraud specialists find the most suspicious accounts for immediate review. At the frontier of fraud prevention, discovering new, erratic patterns can help you find the newest criminals. Any sophisticated criminal will make their activities look as legitimate as possible, and the current method of finding sophisticated thieves is via random checks.

Those random checks can be automated along with manual, human-managed checks. The AI can learn alongside the human worker, and they can verify each other’s work for both speed and getting a second set of eyes–real and artificial. A flagged, but legitimate, random check is no different than a human’s random check, so the worst-performing AI will at least help workers pick random accounts. Better systems will find eccentricities and possibly stumble upon previously unseen fraud patterns that will help humans detect fraud.

Its automating coincidence and luck in some ways. Humans will still have an instinct or simple luck, but augmenting those opportunities with AI is still helpful.

This article was originally published on YoussefKabbaj.com

Overcoming Leadership Stigmas

While overcoming the stigmas that exist around leadership in the workplace can be a difficult process, the truth is that time and effort can significantly aid us in reaching our full potential as leaders. Here are just a few ways that we can help challenge outdated notions of leadership in our own careers, and why doing so can be a life-changing experience.

Leaders Cannot Be Open

To a certain generation of business professionals, leaders were often seen as cold and distant figures; if you were an employee of such a person, you probably wouldn’t want to earn their attention. In recent years, however, the notion that leaders should not be emotionally open has earned many critics. When people do not feel that they can approach their managers about problems or concerns, in other words, they are unlikely to make those managers aware of critical problems in the workplace. For many businesses, that lack of two-way communication can spell disaster.

Leaders Must Be Excessively Strict

For many of even today’s greatest business leaders, overcoming the myth of the hardline manager who is excessively strict with employees can feel insurmountably difficult. For years, the image of the arrogant, overly-strict boss has been reinforced in the public imagination via Hollywood films and popular television shows such as “Mad Men” and “Billions”; in reality, excessively strict leaders usually face an uphill battle in maintaining employee loyalty.

To be a truly good leader in this day and age, a person must be both flexible and willing to meet employees halfway on important decisions. That does not mean being a pushover, of course, but it does mean that leaders must cultivate an attitude of understanding and empathy with their charges to truly succeed.

Leadership Skills Must Come Naturally

When they experience difficulties in managing people effectively, many leaders feel that they are not “cut out” to run a business. They may feel that leadership skills are simply beyond them, or that they do not have enough natural talent to be a truly successful leader.

According to Stanford psychologist Carol S. Dweck, however, such negative beliefs can arise from the “fixed” mindset that many leaders develop early in their careers. In Dweck’s estimation, we sell ourselves short when we ascribe excellent performance in the workplace to natural talent. For most people, in other words, cultivating leadership skills is a process rather than a fixed destination. When we view the development of leadership through this “growth” mindset, we’ll be far more likely to move forward in life when we experience difficulties or setbacks.

For these reasons, challenging negative stereotypes around business leadership can be a profoundly positive way to reach new chapters in our business careers. While negative stereotypes about leaders can be pervasive and even harmful in today’s society, “being the change that we want to see” in the workplace can often help us forge a new path towards career success. Truly, that is leadership at its best!

This article was originally published on YoussefKabbaj.net

6 Tips For Improving Your Credit Score

Improving your credit score goes beyond quick-fix tips and tricks. The best place to start is by paying bills on time and being aware of your credit utilization. Using more than 30% of your available credit limit starts to lower credit scores. Failing to pay bills on time stays on a credit report for the duration of the account.

Changing credit usage and paying bills on time is the best starting point for turning things around. Here are a few tips to improve your credit score further.

Payment Reminders

Start by writing down all payment deadlines for the month on a calendar. Use a smartphone app to set up reminders that give plenty of notice before bills are due. Frequently referencing this document and changing it as your debt obligations evolve can help keep finances on track. Consistently paying bills on time is the best way to improve your credit score.

Pay Twice A Month

Budgeting in an additional payment per month can help pay down debt faster. Paying down debt is another great way to improve your credit score by lowering credit utilization.

Contact Creditors

For people who are struggling to make ends meet, discussing the situation with creditors can help. Creditors can lower interest rates, set up monthly payment plans, and may give you some leeway on one missed payment. Communicating with creditors about debt shows a willingness to acknowledge a bad situation, and most creditors appreciate that.

Be Careful With Old Debt

Missing payments on old credit cards may significantly lower a credit score. It may be tempting to make payments on old debt that is marked charged off, but that might be a bad idea. Charged off accounts mean the creditor expects no more payments to be made. Any payment made on the account may reactivate the debt, and that could lower your credit score.

0% Transfer Offers

For people who are serious about paying down their debt in favorable conditions, a balance transfer offer may help. Many credit card companies offer a 0% interest on transferred balances for an introductory period. Paying off the transferred debt within that period gives you 12-18 months of interest-free payments.

Debt Consolidation

Debt consolidation plans can help get debt under control, but they also temporarily impact credit scores. Making payments to the plan on time means a definite improvement to credit scores.

This article was originally published on YoussefKabbaj.com

Common Misconceptions About Philanthropy

Charity and philanthropy are major concepts that often feel out of reach to the average person. While the everyday consumer may make a donation here and there, substantial contributions are typically reserved for the wealthy and famous. As a result, there are many misconceptions about philanthropy that could stop people from being as actively contributive as they may like to be.

All Charities Help the Poor and Needy

Although people donate with the intention of helping people in need, the U.S. charity industry is a thriving business that benefits many people who are not in crisis. Each year, American charities earn over $1.5 trillion dollars. Although money does go toward its designated cause, it is not granted to the recipients in its entirety.

Consider hospitals, the largest sector of charitable contributions in the United States. While some donations go to improving general healthcare, much more is reserved for installing luxury upgrades and services that benefit guests and staff more than patients.

The truth is that many organizations are run as a charity without doing much good at all. The Internal Revenue Service approves 99.5 percent of all charity applications, which is why there are many popular groups that are earning tax-free income without making any generous contributions. These organizations include the U.S. Golf Association, Renegade Roller Derby team in Bend, Oregon, and the All Colorado Beer Festival.

It’s important to extensively research the organization behind any donation. Any group that is worth donating too will have a viable track records with tangible results.

All Money Goes to Support the Cause

Whether someone donates $10 or $10,000, they want all of their contribution to go directly to the cause. Unfortunately, not all charity organizations reduce overhead costs to give recipients as much financial support and resources as possible.

Any organization will have expenses, so it’s a mere logistic that some money from donations has to go toward the general operation of the group. However, some charities contribute as little as 15 percent of their total income to their cause.

Tax Breaks Motivate Wealthy Donors

Research shows that those with the lowest incomes actually donate the greatest percentage of their income to charitable causes. Most low-income donors rarely itemize their deductions, and they have far less disposable income than their wealthy counterparts.

Although there is a definitive increase in charitable donations before the year’s end, most Americans simply give because they want to help others, and charities may be the easiest way they can do so.

The Importance of Activism

Anyone who wishes to donate to a charitable organization should first research the group extensively. When they are unable to find any proof of how past donations have been used to benefit a cause, they should find means to contribute directly to those in need as well as offer other services.

Donation does not always have to be monetary; time, labor and resources can be just as meaningful in people’s lives.

This article was originally published on YoussefKabbaj.org