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REACH YOUR GOALS
Can Financial Planning Really Be Life-Changing?
When you think about financial planning, chances are it's not an exciting proposition. However, it could be a truly life-changing event if you take a few minutes to envision the possible results.
Recently, a financial planner shared two examples of how he had inspired some of his clients to consider this task a rewarding pursuit.
A 50-something couple realized that their dream of buying a ranch for their retirement was closer than they realized. They had both worked hard to invest in a home and put their two children through college. After we completed a quality-of-life analysis, they realized that they were almost ready to begin the lifestyle they had been dreaming about for years.
An elderly client who remembered a difficult childhood during the Great Depression had been working well into her 70s. She had never reviewed the results of her savings, or what it could do for her. It was a life-changing event when we added up her $3 million in savings, which included bags of U.S. savings bonds in her closet. She could retire immediately in lasting comfort, and gift up to $1 million to her favorite charity upon her passing.
If your current financial plan is uninspiring, it may be time to review it. Even smaller changes, such as portfolio shifts, insurance coverage or retirement contributions, could bring you closer to what you've been working for.
Source: forbes.com
MORTGAGE IQ
Adjustable-Rate Mortgage Basics
While most home buyers opt for the simplicity of a fixed-rate mortgage, some will consider an adjustable-rate mortgage (ARM), especially when interest rates are stubbornly high. This is why ARMs surged in popularity earlier this year, with just over 15% of all mortgages in May 2024 closing as ARMs.
Here's a quick refresher course if you're not familiar with this type of mortgage.
- ARMs begin with a lower interest rate for up to 10 years, which is one of their most attractive features.
- This introductory rate will eventually adjust, usually within five to 10 years. This means your payments will adjust as well and can increase or decrease.
- Generally, an ARM's rate adjustments will be determined by the benchmark rate index indicated at closing, usually the Secured Overnight Financing Rate (SOFR).
The biggest selling point for ARMs is the initial low rate, and since it can be locked for up to 10 years, you'll have time to decide whether to retain the ARM or refinance. For example, if you know that your salary will increase during the next few years, or that you'll be moving and need to sell your home, an ARM could be a smart choice.
ARMs do have some drawbacks; mainly, they're considerably more complex than a fixed-rate mortgage. For example, ARMs have several interest rate caps that control a borrower's maximum interest rate increases during different times.
Source: nerdwallet.com
FINANCIAL NEWS
Why a Vibecession May Be Here to Stay
While our economy's not in a recession, more than a few consumers actually believe it is. Some economists are calling this disconnect between consumer sentiment and economic data a "vibecession".
During a recent NBC poll, nearly half of voting Americans claimed that they were financially worse off now than they were four years ago. However, the economy is growing, inflation has slowed significantly, and unemployment numbers are still low.
Economists consider the most recent bout of inflation to be a main contributor to the current vibecession, as it's something consumers particularly hate. An economics professor at Columbia Business School explained it in detail:
"Americans' lingering frustration with the economy and their personal circumstances appears rooted in the persistently high prices that remain post-pandemic," he said. "This makes for daily sticker shocks when buying groceries, getting a burger, paying rent and filling up the car."
Source: cnbc.com
DID YOU KNOW?
Why You'll Want to Check Out The Work Number
If you haven't heard of The Work Number, don't worry...plenty of us haven't. It's an employment verification system managed by Equifax that provides details of your work history. This is called an Employment Data Report (EDR).
While an EDR is mainly used to verify dates of past employment, it may have your wage and salary details as well. While this probably won't cause problems if you're renting commercial space or a new apartment, it could make your life difficult in other cases.
For example, if you're secretly working a side hustle, this may not be a secret anymore if an employer orders your EDR. It could also undermine your salary negotiations at work, or when you're applying for a new job. However, you can freeze your EDR in a similar way to freezing your credit report. This puts you in control of your EDR's potential viewers.
To review your EDR data, check for errors and decide whether to freeze it, here's what you need to do.
- Go to the official Work Number website and click on the link at top right that says Manage my Employment Data.
- Click on Log In and find a past or current employer. If you can't find an employer, you can click on a link that will take you to this page.
Once you've identified yourself, you can view your employment and salary history and decide whether you'd rather freeze it from prying eyes or leave it as is.
Source: lifehacker.com
PERSONAL FINANCES
An Introduction to ETFs
If you're putting together an initial investment portfolio, you may have seen some products called ETFs and wondered what they were. Since they're different from stocks and bonds, they can help diversify your portfolio, so it's worth taking a few minutes to learn the basics.
An exchange-traded fund (ETF) is a pooled investment security that can be bought and sold like an individual stock. ETFs can be structured to track anything from the price of a commodity to a large and diverse collection of securities. For example, the first ETF, SPY, was launched in 1993 to track the S&P 500 Index.
Various types of ETFs are created for income generation, speculation, and price increases, and to hedge or partly offset risk within an investor's portfolio. Generally, ETFs offer low expense ratios and fewer broker commissions than if you bought the stocks within an ETF individually.
Source: investopedia.com
FOOD
Mushroom and Sweet Potato Pot Pie
If you're looking for a Thanksgiving side dish for vegetarian guests, this Mushroom and Sweet Potato Pot Pie proves that they're just as welcome at your table as other gobblers.
REAL ESTATE TRENDS
Thanksgiving Decor Your Guests Provide
If you're cooking for families or three generations, you may be wondering how to keep everyone entertained while preparing Thanksgiving dinner. Here are a few simple, fun activities that don't involve fighting over the television remote.
- Buy a roll of plain white paper, seasonal stencils and some colorful paint so children can create a table runner.
- Create some paper leaves out of card stock and ask your guests to write down what they're thankful for, then hang them on a rope or twine garland.
- Got pine cones outside? Bring them indoors so everyone can dress them up as turkeys. Colored paper, feathers and stick-on eyes are all you need.
- Buy some tiny pumpkins and ask younger guests to paint every guest's name on them with silver or gold paint. They'll be ready to use as place cards in just minutes.
- Ask every guest to bring a photograph of something or someone they're thankful for and pin them all to a pre-decorated corkboard.
Source: goodhousekeeping.com
