Month: September 2024

Apache is functioning normally

A new paper from Yale professor Kelly Shue argues that consumers mistakenly wait to take out mortgages and other long-term loans when the Fed is expected to cut rates.

Their confusion seems to be related to conflating short-term and long-term rates, which don’t necessarily move in tandem.

In fact, short-term rate moves are typically already baked in to long-term rates, meaning there’s no need to wait until the cut is official for an even lower interest rate.

The savings of short-term rate cuts should already be reflected in the interest rate of a long-term loan such as a 30-year fixed mortgage.

Despite this, home buyers and even professional forecasters tend to get this wrong according to the research.

Short-Term Rates vs. Long-Term Rates

Consumers have long misunderstood the relationship between the Fed and mortgage rates.

Many incorrectly believe that the Fed directly controls mortgage rates. So when the Fed announces a rate cut, prospective home buyers expect mortgage rates to come down as well.

For example, the Fed is widely expected to lower its fed funds rate by 25 (or maybe 50 basis points) at its September 18th meeting.

When this takes place, there will be a slew of articles written about how “mortgage rates fall” and the like.

Some may even assume that the 30-year fixed fell by the same amount, whether it’s 0.25% or .50%.

So if the 30-year fixed was 6.50% the day before the meeting, a hypothetical home buyer might think the going rate is 6.25% or even 6% the next day.

In all likelihood, they’ll probably be disappointed if and when they speak to their loan officer or mortgage broker.

Chances are mortgage rates won’t budge much at all. And perhaps worse, they could actually rise after the Fed announces a rate cut!

This all has to do with short-term and long-term rates, with the fed funds rate a short-term rate and the 30-year fixed a long-term rate.

While they can impact one another, there isn’t a direct correlation. This is why you don’t hear mortgage rate experts telling you to use the fed funds rate to track mortgage rates.

Instead, the 10-year bond yield is a good way to track mortgage rates, since historically they have a very strong correlation.

Simply put, they are both long-term rates and function fairly similarly because many home loans are paid off in a decade or so despite being offered a full 30 years .

Should You Wait for the Fed to Cut Rates Before Refinancing (or Buying a Home)?

That brings us to consumer behavior surrounding rate cuts and hikes. Before we talk about rate cuts, which are finally on the table, let’s talk about rate hikes.

When the Fed is expected to hike rates, people tend to rush out and lock their loan before rates go up even more.

The researchers, which include Professor Shue, Richard Townsend, and Chen Wang, argue that this too is “a mistake.”

They note that knowing “that the Fed plans to gradually increase short rates does not mean that long rates will gradually increase in tandem.”

Conversely, they say “the long rate jumps immediately in response to such an announcement,” meaning there isn’t a rush to lock your rate before the Fed acts.

Now when we flip the script and consider a rate cut, the same logic applies. If you’re waiting to buy a home or refinance your mortgage due to an impending rate cut, it might be a mistake.

The Fed rate cuts are mostly telegraphed in advance and known to market participants. So there won’t be a big surprise on the day of the announcement that leads to a significant improvement.

At least not with regard to the rate cut announcement itself. This is why mortgage rates often defy logic on the day Fed announcements take place.

Sometimes the Fed raises its rate and mortgage rates fall. And sometimes the opposite happens.

And again, this is due to the disparity between short-term and long-term rates.

What About Long-Term Monetary Policy?

While I agree with the researchers on the point of short-term rate cuts already being baked in to longer-term rates like 30-year mortgages, there’s one other thing to consider.

The expected long-term monetary policy of the Fed. If they are just beginning to cut short-term rates, there is a chance long-term rates continue to improve over time.

I know, the researchers already debunked this with their talk about gradually increasing rates, saying people “fail to recognize that the current long rate already reflects future expected changes in short rates.”

And at the moment, the consensus is for the Fed to cut rates 200 basis points or more over the next year, per CME.

By the September 17th, 2025 meeting, the fed funds rate could be in a range of 3% to 3.25%, down from 5.25% to 5.50% currently.

Sure, you could argue that this too is somewhat baked in to long-term rates at the moment, but there’s still a degree of uncertainty.

If and when the Fed does actually begin cutting rates, instead of merely hinting at it, we could see longer-term rates trickle down further.

Of course, that will depend on economic data and things like inflation and unemployment, which will only reveal themselves over time.

But if you look at the rate tightening cycle, which involved 11 Fed rate hikes between early 2022 and mid-2023, you’d see that mortgage rates kept getting worse and worse.

Granted that too was driven by the underlying economic data, namely out-of-control inflation.

Still, the 30-year fixed surged from roughly 3% in early 2022 to around 8% during that span of time. So those who did go out and lock their rate ASAP were rewarded.

Even someone who chose to take out a 30-year fixed in March 2022 was able to snag a ~3% rate versus a rate of nearly 6% by as early as June of that same year.

In other words, what the Fed has already indicated might be baked in to rates today, but what we’ve yet to find out could push rates even lower as time goes on.

There’s no guarantee mortgage rates will continue to decrease from here, but it’s decently likely if economic data continues to come in cold.

Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.
Latest posts by Colin Robertson (see all)

Source: thetruthaboutmortgage.com

Apache is functioning normally

More than one in five adults age 65 and older reported not taking medications as prescribed due to cost, according to a 2023 study published in JAMA Network Open.

There’s help available, but many beneficiaries might not be aware of their options.

“Far too many people don’t know that there are resources out there to help them,” says Amy Niles, chief mission officer at the PAN Foundation, a nonprofit organization that helps people get needed prescription drugs and medical treatments.

Here are three potential resources that might help you or a loved one afford medications with Medicare Part D.

Still deciding on the right carrier? Compare Medicare Part D Plans

1. Government assistance programs

If you qualify, Medicare’s Extra Help program covers all costs for your Medicare Part D plan and covered prescription drugs, with the exception of copays of up to $11.20 per drug in 2024.

The eligibility requirements for Extra Help are fairly strict. The income limit is $22,590 per year for an individual or $30,660 for a married couple in 2024, which is 150% of the federal poverty level. There are also limits on resources, the label given to assets you own and convert to cash to support yourself if needed, such as bank accounts, retirement funds, stocks and bonds.

Extra Help enrollment isn’t automatic, and many people might be missing out because they haven’t applied. “Three million people are eligible for the program but not yet enrolled,” according to a February 2024 press release from the Centers for Medicare & Medicaid Services.

“Medicare Part D beneficiaries should apply for all Medicare Savings Programs, including Extra Help,” Michele McCourt, executive director of CancerCare’s Co-Payment Assistance Foundation, said in an email.

Most states also have a pharmaceutical assistance program and/or some kind of discount prescription program. Benefits and eligibility requirements vary, but it’s a good idea to look into what’s available where you live.

2. Help from foundations

Nongovernmental organizations can help if you or a loved one are struggling to afford health care. For example, the PAN Foundation offers assistance across about 80 different disease funds, Niles says, and the “overwhelming majority” of people who receive its financial assistance are Medicare beneficiaries.

These charitable foundations might be more flexible on eligibility requirements than government programs. For example, Niles says the PAN Foundation usually can offer assistance to people at or below 400% to 500% of the federal poverty level. (500% of the FPL is $75,300 per year for an individual or $102,200 for a married couple in 2024.)

If you’re not sure about Extra Help eligibility, McCourt said it may be best to apply for Extra Help and help from foundations at the same time. (If you find you’re eligible for Extra Help, contact the foundations to let them know you no longer need assistance, she suggested.)

Foundations often offer help with more than just prescription drug costs, too. Assistance might be available for health insurance premiums, transportation, lodging, childcare or pet care, for example, as well as counseling, navigating insurance rules, and referrals and coordination with other patient advocacy and assistance groups.

The PAN Foundation, Accessia Health and CancerCare are three charitable organizations that might be able to help patients struggling with costly prescription drugs or other medical expenses. Other options include the HealthWell Foundation, Good Days and the National Organization for Rare Disorders.

The foundations’ websites offer details on eligibility and application processes for their individual programs.

3. A new $2,000 out-of-pocket cap

Medicare Part D will have a new $2,000 out-of-pocket cap on copays, coinsurance and deductibles for covered prescription drugs starting in 2025. But many beneficiaries might not know this change is coming.

Only about 40% of registered voters age 65 and older are aware of the law capping out-of-pocket prescription drug costs, according to an April-May 2024 tracking poll by KFF, a health policy nonprofit.

“The $2,000 out-of-pocket cap will have a significant impact on beneficiaries,” Anna Brown, vice president of marketing and communications for patient assistance nonprofit Accessia Health, said in an email.

“However, it’s important to acknowledge that while the $2,000 cap increases affordability for Americans, we know that many will still struggle to afford even this reduced out-of-pocket maximum, especially those with chronic and rare medical conditions,” Brown said.

Both Brown and Niles indicated that their organizations are committed to continued advocacy, education and direct support to make Medicare prescription drug coverage even more affordable in the future.

Source: nerdwallet.com

Apache is functioning normally

Your home is more than just a place to live, it’s a canvas for self-expression. Every corner, every piece of furniture, and every decorative item tells a story about who you are and what you value.

Expressing your personal style through your living space not only creates a more inviting atmosphere but also contributes to your overall well-being.

That’s why today we’ll look at five easy ways to infuse your unique personality into your home, creating a space that truly reflects you.

Curate a gallery wall that speaks volumes

Photo credit: Steph Wilson on Unsplash

One of the most effective ways to showcase your personal style is through a carefully curated gallery wall. This versatile design element allows you to display a collection of art, photographs, and mementos that resonate with your aesthetic and experiences.

Start by selecting pieces that hold special meaning to you — family photos, travel souvenirs, or artwork that captures your imagination.

Mix and match different frame sizes and styles for an eclectic look, or stick to a uniform design for a more polished appearance.

Embrace color psychology in your palette

Photo credit: Spacejoy on Unsplash

Color has a profound impact on mood and perception, making it a powerful tool for expressing your personality.

Choose a color palette that resonates with the atmosphere you want to create in your home. Bold, vibrant hues might reflect an energetic and outgoing personality, while softer, muted tones could express a more introspective nature.

To top it off, consider using color-blocking techniques to create focal points in your rooms. For instance, you might paint an accent wall in a rich, deep tone to add drama to your living room or use a bright, cheerful color in your home office to inspire creativity.

Showcase your passions through functional decor

Photo credit: Beazy on Unsplash

Your hobbies and interests are integral parts of your identity, so why not incorporate them into your home decor?

If you’re a book lover, create a cozy reading nook with floor-to-ceiling bookshelves and a comfortable armchair. Music enthusiasts might display their vinyl collection as wall art or repurpose vintage instruments as unique decor pieces.

For those with a green thumb, integrate plants into your living space with hanging planters, a vertical garden, or a statement indoor tree. Not only do plants add life and color to your home, but they also improve air quality and contribute to a sense of well-being.

Personalize your space with DIY projects

Photo credit: Kate Darmody on Unsplash

Nothing says “personal style” quite like handmade items.

DIY projects allow you to create unique pieces that perfectly match your vision and budget. Try your hand at reupholstering an old chair with a fabric that complements your decor scheme, or create custom throw pillows with patterns that speak to your aesthetic.

For a more substantial project, consider building a custom piece of furniture, like a coffee table or bookshelf. Not only will you have a one-of-a-kind item, but you’ll also have the satisfaction of knowing you created it yourself.

Extend your style to outdoor spaces

Photo credit: Jan Antonin Kolar on Unsplash

Don’t forget that your personal style shouldn’t be confined to the interior of your home.

Give your outdoor space some personality by treating it as an extension of your indoor living areas. Create an inviting patio or balcony with comfortable seating, outdoor rugs, and ambient lighting.

Add personal touches like colorful planters, wind chimes, or a small water feature to reflect your taste and create a serene atmosphere. If you have a garden, use it as an opportunity to express your creativity through landscaping.

Expressing your personal style through your home is an ongoing process of creativity and self-discovery. By implementing these five ideas – curating a meaningful gallery wall, embracing color psychology, showcasing your passions, engaging in DIY projects, and extending your style to outdoor spaces – you can create a living environment that truly reflects who you are.

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Source: fancypantshomes.com

Apache is functioning normally

The bachelor party decided to go to the casino. I happily went along for the ride. The behavioral finance nerd in me was ready to witness fascinating behavior. Gambling can certainly be entertaining, but it’s not financially savvy. As long as you know that, you’ll be ok – albeit a little lighter in the wallet.

This particular casino had an engaging “loss leader.”* They offered $15 in free casino credit to new gamblers. The scheme, of course, is cynical. They hope those free bets hook you, knowing that a regular gambler will surely lose back more than the free $15 over a long period of time.

*a strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services.

And all it takes is one true addict to make up for hundreds of free giveaways. Like I said…cynical.

Most of our friends went to the blackjack table (where the per-hand odds are ~42% for the player, 50% for the house, and 8% ending in a tie), betting in their own cash on top of the free $15 credit.

My buddy, Trey, and I cheaped out. We took our $15 casino cards and went to the dollar slots. Let’s push some buttons and have free fun until the $15 disappears.

But we got lucky.

Trey turned his $15 into ~$80 of real money, and I left with ~$200. Our $30 in free credit became $300 real dollars. We counted our blessings and walked away. Appetizers are on us, fellas!

Meanwhile, the blackjack players ultimately played until their chips disappeared. They had fun but they lost their money. And yes – a few of them learned of our “success” at the slots and felt aggrieved by our dumb luck.

But if we look strictly at the financials, I see a clear takeaway:

  • Trey and I “played” in a way that was literally impossible to lose. As long as we didn’t succumb to any impulse to wager our own money, we had a 0% chance of losing. Granted, we got lucky to leave with gains. But we weren’t going to lose money.
  • The blackjack guys played in a way guaranteed to lose, barring any luck. The more hands they played – each a bet with odds against them – the more likely their loss.

It’s true – I’m not the most fun guy at the casino.

But implore you to apply a similar idea to your investing.

The Market Ain’t A Casino

First things first: the market isn’t a casino, and investing isn’t (or shouldn’t be) gambling.

I understand why it can feel that way, especially when we hear stories about GameStop, AMC, or Enron. Big bets, big wins, and big losses over short periods.

The market, as a whole, isn’t roulette, though. It simply represents the ownership of businesses—a small slice of the global economy that we each own. Owning a business is not the same as blind gambling. You’re not depending on dice or cards to fall your way.

Stock investing involves exchanging money today for the future income stream of a particular business. Or, in the case of a broad fund of stocks, the future income stream of the global economy. The economy doesn’t over- or under-perform based on dice or cards.

Investing in stocks – at least the way I implore us all to approach it – isn’t gambling.

Bets in the Market

But the stock market isn’t a guarantee, either. There will be times when we invest on Monday only to see our investments decline in value on Tuesday. In fact, the shorter our investment period, the more likely we’ll lose money.

I don’t want to play blackjack with my retirement. I don’t want to make coin-flip bets.

But the more the odds are in my favor, the more I’m willing to wager. In one of Berkshire Hathaway’s annual meetings, Warren Buffett says something akin to, “If you give me 5:7 odds, we’d be willing to wager a very large sum of money.”

FYI: That’s a ~58% chance of winning.

Personally, I don’t have enough extra money to make too many 58% bets. I’d much rather make 90% bets. Or even better, I’d rather bet with the casino’s money. I want to feel really sure that I’ll walk away a winner.

The longer you invest in the stock market, the more likely you’ll walk away with profits. That’s a wager I’m willing to make.

Some Bets I’m Willing to Make

As of writing this very sentence, the S&P 500 is at 5526.

Will the S&P 500 be higher or lower in one month? I don’t know, and I don’t care. I don’t want that bet.

Will the S&P hit 5626 (100 points up from now) before it hits 5426 (100 points down)? I don’t want that bet, either.

Both those bets—involving short periods and small changes (~2%) in the market—are too close to 50/50 bets. I’m not willing to take those odds. It’s too risky. That’s why, in my opinion, stock investing is inappropriate over short periods. One month, 6 months, even out a few years – stocks aren’t appropriate.

But will the S&P be higher or lower in 10 years? Or 20 years? Or more? I’m willing to make that bet, and it’s a sizable bet at that. I’ve got a lot of money on the line. I’m not sure it will pay off, but I like my odds.

Will the S&P hit 8300 (50% up from now) or 2750 (50% down)? I’m not sure. 50% declines do happen, but not too frequently. 50% increases are much more common. I’m an optimist on this one, too.

I care about long periods and steady compounded returns over those periods. The odds are clearly in the investor’s favor when looking at those time scales.

Those are some bets I’m willing to make.

Thank you for reading! If you enjoyed this article, join 8500+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week. You can read past newsletters before signing up.

-Jesse

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Source: bestinterest.blog

Apache is functioning normally

San Diego is known for its sun-soaked beaches and relaxed coastal vibe, but the city offers a collection of unique experiences that capture the essence of its diverse culture and community spirit. Maybe you’re thinking about buying a home in San Diego, CA, or renting a house or apartment in the city. Or perhaps you’re just in the beginning phases of imagining life here. Wherever you’re at, we’ll explore just a glimpse of what San Diego has in store for you. 

1. Ride the waves

Learning to surf is an absolute must for anyone moving to the area, and San Diego Surf Lessons make it easy. Located in Solana Beach, Cal Coast Adventures provides everything you need—surfboard, wetsuit, and a professional instructor—for an unforgettable time on the warm waters of the Pacific. The experience starts with the basics and progresses to more advanced techniques, ensuring both safety and fun all while soaking in the sunny coastal ambiance.

2. Tap into local craft brews

For those looking to experience San Diego’s renowned craft beer scene like a local, TapRoom Beer Co. in Pacific Beach is the place to be. This laid-back spot offers a vast selection of local brews under one roof, combined with delicious food and a killer beer garden. The chill atmosphere makes it a perfect hangout for both craft beer aficionados and those just looking to soak up the San Diego vibes.

3. Tap into your creative side

If you’re in the mood for something hands-on and creative, a visit to The Mudd House Ceramics Studio is a must. This community-centric studio offers pottery classes that are as much about socializing as they are about creating. You can dive into the art of ceramics, meet new people, and perhaps even start a new hobby. It’s a fun activity that adds a unique touch to your San Diego experience.

4. Savor authentic Italian

For a taste of Italy in the heart of La Jolla, Piazza 1909 is the place to be. This family-owned Italian restaurant, with their Chef Stefano from Milan, offers a cozy spot for outdoor dining with a dog-friendly atmosphere. The menu caters to all with gluten-free and vegan options, making it a versatile choice for any gathering. 

5. Sip unique lattes

Located in the trendy North Park neighborhood, Lazy Eye Coffee is more than just a coffee shop—it’s a creative hub. Known for its unique lattes with house-made syrups and a playful food menu, this spot is perfect for those looking to relax in a stylish setting. The beautiful patio, complete with a cactus garden and pallet forest, offers a serene environment to enjoy your coffee and soak in the neighborhood’s artistic vibe.

6. A culinary journey in the Convoy District

San Diego’s Convoy District in Kearny Mesa is a cultural haven, especially for food lovers. The nearly 2-mile-long street is packed with over 200 Asian restaurants, shops, and grocery stores, offering a culinary journey like no other. Whether you’re craving Korean BBQ, Japanese sushi, or Chinese dim sum, Annie & Ty at The Seasoned Wok recommend bringing your appetite and diving into the diverse flavors that this vibrant neighborhood has to offer.

7. Experience coastal dining at its best

For a true taste of San Diego’s Mexican roots, Chantelle from DOPE AF Food suggests two of their favorite restaurants that perfectly capture the city’s chill, coastal vibes and proximity to Mexico. Casa Guadalajara, nestled in Old Town, delivers an original experience with its festive ambiance, extensive menu, and live mariachi music, offering a true blend of California and Mexican culture. If you prefer a location with a more serene vibe, Chantelle also recommends George’s at the Cove in La Jolla. Here, you can enjoy fresh seafood, specialty cocktails, and breathtaking ocean views—making it the perfect spot to unwind and catch the sunset.

8. Discover breathtaking art

San Diego’s downtown Marina District is home to Art Scene West, a vibrant cultural hub that showcases breathtaking works of art. This gallery not only offers a diverse collection of fine art but also encourages creative expression through interactive guided painting events known as Painting Parties. Whether you’re looking to add a piece of art to your collection or simply enjoy a creative date night, Art Scene West is a must-visit.

Photo courtesy of Art Scene West

9. Shop local at Point Loma Farmers Market

For an authentic “locals-only” experience, head to the Point Loma Farmers Market. Nestled in the heart of the beautiful Point Loma Hills neighborhood, this market offers a variety of attractions, from organic farm goods to unique crafts and jewelry. The market is also home to one of the largest Brazilian communities in San Diego, adding a rich cultural flavor to the experience. With a free kids area, delicious food booths, and a vibrant community atmosphere, it’s a great way to spend a Sunday morning.

10. Satisfy your taco cravings

San Diego is famous for its Mexican food, and City Tacos, a favorite of Chef Ben Mastracco, offers a delicious twist on the classic taco. With multiple locations throughout San Diego, this taco spot blends traditional flavors with gourmet ingredients, all served in a relaxed setting. Pair your meal with one of their local craft beers for an unbeatable combination that epitomizes San Diego’s vibrant food scene. 

11. Create and connect

For a more intimate and personalized creative experience, consider booking a private ceramics class at Clay Society. Led by Janna, the artist behind Isiko Global Goods, these classes offer a relaxed and inspiring environment where you can craft your own pottery pieces. It’s a perfect activity for a date night or a small group of friends looking to try something new and artistic.

Photo Courtesy of Clay Society

12. Immerse yourself in art

Located in the Liberty Station Art District, Mi Gallery Tu Gallery is a must-visit for art enthusiasts to immerse themselves in San Diego’s art scene. This gallery hosts art exhibitions, workshops, and private events, making it a vibrant part of the city’s cultural fabric. 

13. Reconnect with nature at Torrey Pines State Natural Reserve

One of San Diego’s natural wonders, Torrey Pines State Natural Reserve offers breathtaking views of the Pacific Ocean, unspoiled beaches, and the rare Torrey pine trees. This 1,500-acre park is a “coastal gem” that provides a quintessential San Diego experience. Whether you’re hiking, whale watching, or simply soaking in the sunset, Torrey Pines is a place where the beauty of nature takes center stage.

14. Shop vintage treasures

Finally, for a truly unique shopping experience, check out Bad Madge & Co. in San Diego’s South Park neighborhood. Voted the best vintage store in the country in 2022, this eclectic shop offers a curated mix of vintage treasures, local designer pieces, and retro finds. It’s a perfect stop for those looking to discover unique items that reflect San Diego’s character.

Unique things to do in San Diego, CA: Final thoughts

San Diego is a city bursting with unique experiences that go beyond the usual tourist spots. From riding the waves to exploring cultural districts and dining on gourmet tacos, there’s always something new and exciting to discover in the city. Whether you’re exploring the neighborhoods or immersing yourself in the local culture, living in San Diego offers endless opportunities to create unforgettable memories.

Source: apartmentguide.com