Author: Jenny Smedra

10 Tips for Beginners Investing in Diamonds

Tips for Beginners Investing in Diamonds

With current market fluctuations and conditions, many more people are looking for alternative assets to add to their portfolios. While many investors have traditionally turned to physical commodities like gold and silver, diamonds are becoming an increasingly popular investment option. If you are looking for new ways to diversify, here are a few tips for beginners investing in diamonds.

Why Are People Investing in Diamonds?

Here are a few of the most common reasons why more investors are turning to diamonds as a new portfolio option.

Market Volatility

The recent stock market volatility has many nervous investors looking at alternative assets. Physical commodities like gold, silver, and diamonds have always been a popular option to protect investors. However, there is an increasing interest in physical commodities that are not correlated to the stock market as prices continue to fluctuate.

Portability

Another reason people are investing in diamonds is their portability. They are small and easy to transport. Their size also makes them simpler to store than other types of assets.

Durability

Diamonds are the hardest known substance on Earth. Therefore, there is little to no chance of accidental damage or breakage. And, you won’t have to pay for maintenance or upkeep either.

Insurability

Many owners worry about theft or loss. However, you can insure your diamonds as an extra precaution to protect your assets.

Inflation-Proof

Market demands have always been high, so it’s very unlikely that diamonds will lose value. That’s why some think of them as “inflation-proof.” As mentioned above, some investors use them to hedge against inflation and market fluctuations. This is usually a smart financial move since their value keeps up and often outpaces inflation rates.

High Demand

Diamonds have an intrinsic value because of their limited supply and high demand. The fact that there are no open markets or exchanges also drives up prices. Historically, there has been a steady demand which is continuing to rise.

The Psychology of Security

There is also something to be said about the security you have from a tangible and valuable asset like diamonds. Having something that you can see and feel makes it more real than buying stocks and bonds. Keeping them nearby or on your person may make you feel that your investments are more secure.

Enjoyment

Lastly, you shouldn’t overlook their enjoyment factor. Diamonds are an asset you can enjoy without depreciating value. You can mount and wear them, using them for more than just investment purposes.

What Are the Risks?

As with all investments, diamonds also carry risks. The first comes from a lack of price transparency. It’s hard to place a standard value on them without an official price index. It’s even more difficult with rare and colored diamonds. Although diamonds are expensive, you need to become an informed buyer. Markups erode their investment potential. And, if you aren’t careful, you could be taken advantage of and overpay.

Another factor to consider is physical storage. Theft is the biggest threat. Therefore, you’ll need a safe place to store your assets. Then, there is the low liquidity and the time it takes to find serious buyers. And last but not least, it could take years for your diamonds to appreciate. So, if you’re looking for assets that have quick turnaround and resale value, diamonds probably aren’t the best option for you.

10 Tips for Beginners Investing in Diamonds

Despite these risks, many investors are not deterred. If you are interested in diamonds as an alternative asset, here are 10 tips from the experts for beginners who are investing in diamonds.

1. Do your research and get an expert opinion.

If you are just getting started, learn the basics and get familiar with diamond jargon. You can start with the 4 Cs of diamonds – carat weight, cut, color, and color – and how these factors affect their value.

But, remember each diamond is unique. Before you purchase anything, find a trusted professional to gain more knowledge about specific items. You should seek out multiple opinions before investing.

2. Know your financial goals.

You should also be aware of your financial goals. Diamonds are a great option for safe, long-term investments. However, they aren’t so great if you need a quick turnaround or appreciation.

3. Know your financial limits.

There’s no way around it…investing in diamonds requires more of an initial investment than other assets. But, this will be part of your portfolio. However, you should still know your financial limits and how much you are willing to spend.

4. Always look at the documentation.

This should go without saying. But, only purchase certified diamonds. Real gemstones come with a GIA or IGI certificate from the most renowned geological labs with the strictest standards. And, anyone you sell to will expect these documents as well.

5. Compare prices.

As with all large purchases, you should compare prices. Pricing on diamonds can be subjective. Especially since there isn’t a transparent pricing platform. But, you can compare prices for similar stones through online retailers or local dealers to make sure you are getting a good deal.

6. Look for quality and resale value.

When it comes to diamonds, you don’t want something that everyone else has. Yet, you want to buy something of quality that will have future resale value. Look for high-quality gems and desirable cuts that will bring a higher resale value.

7. Diversify.

Any advisor worth their salt will tell you that diversification is the key to protecting your portfolio. That’s why many investors turn to diamonds as an alternative investment. But, don’t put all your proverbial eggs, or in this case diamonds, in the same basket. Purchase different types, cuts, and sizes. You never know which one will increase in value or which one will be easier to sell down the line. And, if you need to liquidate a portion of your assets, it’s easier to sell smaller stones than with a single large diamond.

8. Mounting a diamond adds appeal.

Although the mounting isn’t included in the valuation, it can add appeal. While the buyer likely has their own plans, mounting it can showcase the diamond. Not only is it much more appealing than a loose diamond, but it can also help you sell it faster. Mounting the stone also allows you to wear it and show it off to potential buyers.

9. Skip the middleman.

One of the biggest mistakes beginners who are investing in diamonds make is buying from your local jewelers. Retail prices are much higher which erodes their value. Rather than pay the markup from brokers taking their cut, look for sources higher up the distribution chain. You can cut out the middleman and try to buy directly from manufacturers.

10. Don’t be afraid to speak up.

Finally, if you have questions or concerns, don’t be shy. Speak up! Ask consultants, experts, and online forums for advice. Or, talk to other investors about their experiences. Learn everything you can before delving into the world of diamonds. Knowing the market could help you find a diamond in the rough.

Read More

Finding the Top Travel Deals this Summer

How to Find the Best Travel Deals

After a very difficult year and my father’s passing, my mom decided that we needed some time away. So, this summer my mom, nieces, and I are going to finally take the family vacation that he always wanted to have with his grandkids. It may also be the last opportunity we have to do a longer trip since the girls are growing up and will be going off to college soon. Unfortunately, we only had a couple of weeks to figure out dates, flights, hotels, car rentals, and ticket reservations. Thankfully, I have years of experience in the travel industry and was able to secure some fantastic last-minute travel deals. This is one family vacation we are all looking forward to.

Sites with the Top Travel Deals

With only three weeks to plan, the first task was to pick the destination and figure out transportation. After some debate, we settled on flying to San Diego and spending the week driving back. With that in mind, I went online to compare rates and deals.

Full-Service Sites

I usually begin my search with travel sites like Travelocity, Expedia, or Kayak to estimate the total costs. They have the most competitive rates for hotels, flights, and car rentals. And, they offer package deals to local attractions to save you even more. Another benefit is that they check service providers and locations around the world. If you are looking to find last-minute deals, it’s the perfect option for one-stop shopping.

Google Flights

Rather than pigeonhole our trip with non-refundable tickets, I wanted to book directly through the airline. So, I bypassed the first offers and looked at individual flights. Google Flights gives you a great overview and compares rates across the greatest number of domestic and international airlines. And, you can browse their pop-up calendar to search for the lowest rates by day. I was quickly able to locate the cheapest flights and best routes.

Booking.com

For hotel reservations, I rely on booking.com since it checks all accommodation types. And, it doesn’t require a deposit for the reservation unless you choose a non-refundable rate. Furthermore, you can typically cancel within 24 hours of arrival if necessary. Since I have used them so much in the past, I have also received “genius” status from my reviews and get an additional 10% off. We were able to find dirt cheap deals on express hotels along our route home.

Airbnb

For the longest stay of the trip, we used Airbnb to look at vacation rentals. I find it to be the better option when traveling in bigger groups since you get more space without a huge price tag. We found an entire house for nearly half the price of two hotel rooms for the same stay. It’s also nice to have additional amenities like a full kitchen and laundry to reduce other costs for the trip. And since it’s in a prime location, we have easy access to all the places we want to see.

Hoteltonight.com

Although I haven’t used this site much in recent years, it’s a great option for last-minute reservations. You can find some unbelievable discounts if the conditions are right. However, there are no guarantees that you will get more than a standard room or discounts at a specific hotel. But if you’re looking for the best price, you can’t beat their rates.

When to Look for Travel Deals

Another thing to keep in mind is when to look for travel deals. During my time working in the hotel industry, several travel agents informed me that airlines evaluate their prices approximately 45-54 days before departure. If the flight is filling up, rates go up. However, if there are many open seats, you can find some huge discounts. When I find a potential flight, I set price alerts to notify me of rate changes to help me score the best deal.

You should also be aware of travel seasons and when certain locations hit their peak. If you are willing to wait until the low season, hotel and airline rates drastically drop.

I also try to avoid heavy travel days such as holidays and weekends. During the busiest travel times, rates can double or even triple. From my experience, the cheapest days to travel are usually Tuesdays and Wednesdays. However, you should also check their calendar travel dates for the lowest prices.

The Best Travel Deals

So, how much did all this save me? Let’s take a look…

Transportation

We decided to fly one way to San Diego, then rent a car to drive back to see the Grand Canyon and a few other attractions along the way. I booked tickets for about $200 per person when most other airlines are charging $500+. I also found a great deal on a weekly car rental through Budget that was $400 less than the initial offers. In total, this saved about $1,600.

Accommodations

For the longest portion of the trip, we booked a vacation rental through Airbnb for only $225 a night. Not only will it give us more space, but it was also much cheaper than comparable hotel rooms which started at $150 per room, per night. And, the cheap hotels didn’t offer proximity, laundry facilities, or free breakfast. Not counting all the extras, this alone saved $375.

The remainder of the hotel nights were either booked using points or will be chosen along the way. We are also planning to stay with family for a few nights as well which will also cut down on costs.

Tickets to Attractions

You can also find ways to save money when you buy tickets to local attractions. We will have free admission to the San Diego zoo since we already bought a national zoo pass. And, we can also use our National Park Pass from last year since it is still valid. Having these passes saved us an additional $300+ on tickets.

However, you can also get discounted tickets if you buy a package, book through an online retailer, or qualify with any memberships.

Tips to Find the Right Deal for You

On a final note, here are a few tips to help you find the best travel deals.

  • Know which things you can be flexible with and which you cannot. Flexibility with dates, desired location, and staying near public transportation can net you huge savings.
  • Book directly with the service provider. Not only is it simpler to cancel and change reservations, many offer price matching with third-party sites.
  • Check for discounts. It never hurts to ask and you may qualify for one of these discounts:
    • 10% discounts with car clubs and discount buying club memberships
    • senior citizen discounts
    • employee or contractor rates
    • friends and family discount

You don’t need to be a super sleuth to find the best travel deals. But knowing where to start will give you a headstart.

Read More

How Will You Spend Your Tax Refund?

How Will You Spend Your Tax Refund?

Many Americans like me count on their annual return and already have plans for how they will spend their tax refund. After brutal winter storms, rising inflation rates, and increasing prices the last few months, it couldn’t come at a better time. We have several large expenses on the horizon. Fortunately for my husband and me, we received a larger refund than we had anticipated this year. While I have always viewed this money as relief money to get ahead of our finances, others tell us they have other plans. Instead of paying bills, they want to use this “extra money” to splurge a little. Since we have a little more in the budget, this has led to some debate about how we should spend our tax refund this year.

How Do You Get a Tax Refund?

Every year, Americans must report their earned income by filing their federal and state tax returns. However, many people pay more than necessary. In fact, the IRS reports that nearly 75% of taxpayers overpay and receive a tax refund.

This usually happens because employers withhold more than the required amount. However, it also occurs when self-employed taxpayers overestimate their quarterly payments. Whatever the reason for overpayment, the government will reimburse the difference back to you. If the IRS owes you a refund, you can choose to have the funds issued by check or direct deposit to your bank account.

How Should You Spend Your Tax Refund?

For many full-time employees, this tax return adds up to thousands of dollars. In the past, I have always viewed this windfall as a means to gain ground toward my long-term financial goals. Sometimes I used my refund to pay bills, reduce debt, or invest in my future. While it was tempting to blow the money on large purchases, I erred on the side of caution. Instead of splurging, I used it to provide some financial breathing room.

However, we are now financially stable and have more discretionary funds with our return. Since we aren’t living on a student’s budget, would it be a terrible idea to spend some of it on things we enjoy? Or, should we be more conservative and reinvest it?

1. Invest it.

My knee-jerk reaction was to take the extra money and reinvest. Since I got into the investment game relatively late, I feel like I have several years to make up for. We already max out our annual contributions to our Roth IRA accounts. And, we also regularly add to our employer-sponsored 401ks and other brokerage accounts. We also have a healthy emergency fund and have topped off our Health Savings Account as well.

But we are always open to new opportunities. Although we have a well-rounded portfolio, my husband and I have recently discussed ways to further diversify our investments with alternatives asset classes. These conversations seem to have a way of returning to the real estate market. While in the past this was not an option, crowdsourcing platforms such as FundRise and Roofstock have made it more accessible to the average investor. And with rising demands for housing, this seems like a sound investment that offers profitable returns.

2. Put it towards home repairs and upgrades.

My husband’s response was to spend our tax refund on our home. There are several expensive maintenance issues and repairs that we have put off. For example, all the windows in the house need replacing. And, we also need a new HVAC unit. Moreover, our kitchen is long overdue for an update. But, all of these items come with a large price tag. The additional money would cover down payments and a considerable amount of the total cost. Not only would it improve the flow and functionality of our home, but it would also reduce our monthly utility bills. Any one of these projects would also increase the resale value of our home.

3. Spend it on our summer vacation.

Last but not least, we discussed using the money to pay for our summer vacation. We have both worked hard and look forward to getting away during the summer months. This year we will be driving across the country to hike state parks, visit friends, and go to a concert. Although we had budgeted to have a low-cost getaway, the extra funds would allow us to enjoy a few more indulgences along the way. Instead of relying on hotel points and basic meals, we could splurge and treat ourselves to a trip where we wouldn’t even have to think about the bottom line.

Being Practical vs. Indulging 

As with all our decisions, we sat down and compared the merits of each choice. Coming from a modest background, my first instinct is to save and plan for our future. However, after years of construction, my husband sees the value of investing in our home. Meanwhile, the idea of doing something for us is also enticing.

In the end, we decided it was best to find a compromise between being practical and splurging a little. So, half of our tax refund will go toward a new HVAC unit. We will then invest a quarter of it in a high-performing REIT. Then, the remainder will fund our summer vacation and allow us an additional excursion during our trip.

It’s hard to live in a world of extremes, so it’s best to find the middle ground. Although we will spend the majority of it responsibly, we also want to enjoy our hard-earned money. So, once we meet all our financial obligations, we will use the rest to reward ourselves and indulge a little.

So, to answer my own question…no, it isn’t terrible to treat yourself and use your refund for things you enjoy. But as with all things in life, everything should be done in moderation.

How do you plan to spend your tax refund? Share your plans in the comments below!

Read More