appreciation

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You’d think that after 43 consecutive months of year-over-year home price appreciation things would begin to get too expensive for most folks. Or that future price increases would be doubtful.

Well, despite nearly four years of nonstop gains, housing affordability is still better than it was before the housing bubble gripped the nation.

Perhaps this is a testament to just how far home prices fell after faulty loans led to a major collapse. But you could also thank persistently low mortgage rates for ongoing affordability.

A new analysis from Black Knight Financial Services revealed that mortgage payment-to-income ratios are still quite favorable by historical norms, with just 21% of median income needed to buy a median-priced home using a 30-year fixed mortgage.

During the height of the boom in 2006, it took 33% of income to buy a median-priced home. And we all know how that turned out.

Before things got out of hand with the introduction of exotic financing, stated income, and no doc loans, the average median income needed to buy a home with a mortgage was 26% (based on the years 2000 to 2002).

So we’re still below levels seen during the more reasonable years, which is certainly a good thing. However, it can all change very rapidly.

It Won’t Take Much to Get Unaffordable Again

Black Knight was quick to point out that housing affordability could take a turn for the worse in the very real scenario of rising mortgage rates and continued home price appreciation.

Basically if we continue enjoying today’s rate of home price appreciation and see a 50-basis-point-per-year (0.50%) increase in mortgage rates, home affordability will be pushing the limits of the pre-bubble average in just two short years.

As a result, eight states would be less affordable than during those pre-bubble years in just 12 months, and 22 would get into potential bubble territory within 24 months.

Even if things stay as they are now, two areas, Hawaii and Washington D.C., are already more expensive than they were pre-bubble.

Now this isn’t to say we need to freak out and sell our homes before they plummet in price. For one, mortgage rates aren’t guaranteed to climb 50 basis points per year.

In fact, the 2016 forecast from some pundits sees rates rising only marginally. Additionally, home price appreciation has already showed signs of slowing.

That could extend the time before we reach dangerous home price levels again. You also have to remember that home prices don’t just drop because they become unaffordable.

Banks and lenders respond to affordability concerns by introducing creative financing products to boost purchasing power, for better or for worse.

And DTI ratios can go much higher than the median income levels mentioned by Black Knight.

Are Home Prices Expensive?

We tend to overshoot what is reasonable in terms of an affordable home price before anyone actually realizes we’ve gone too far.

So even if home prices are too expensive and should technically cool off or fall, they may continue to rise for several years beyond that date.

This is how we get into trouble, but it’s also kind of an inevitable path and one that is likely to repeat itself.

I, for one, believe home prices will continue to climb higher for the foreseeable future, though I do think they’re expensive relative to levels seen in recent years. That could be partially psychological.

For example, it’s hard to consider purchasing a property that was last sold a couple of years ago for nearly half the price.

Still, you have to factor in inflation to get real home prices instead of just saying, “Hey, home prices are back to levels seen in 2006.”

I just think we’ve seen the bulk of the home price growth already and going forward it will be a lot more measured.

That makes it tempting to sell for those who have seen massive gains since 2012, but with high rents and relatively high asking prices on move-up homes, there may be nowhere to go if you do sell.

Source: thetruthaboutmortgage.com

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These days, every week brings a new report, forecast or piece of news reminding us that the mortgage lending market is in uncharted waters. Mortgage demand fell 6% week over week at the end of July. Applications dropped 7% in the same period. The national inflation rate eclipsed 9% in June. Things have changed even more since then.

As lenders, we know these things to be true not just within the context of a recent market report — we see it happening every day on the ground, in the weeds with homebuyers, real estate agents and partners. In a field built on risk — like mortgage lending — the lack of control or agency can often feel like the biggest risk of all.

It can also be truly liberating. It can force lenders back to the basics — to refocus on the things they can control that have always been the most important element of the home-buying journey anyway: How customers feel when they work with you.

In the age of automation and analytics, altruism can often feel less quantifiable, and perhaps less important as a result. Even those who value it will often say something like, “You can’t put a price on experience.”

Except, you very much can.

The polarization of the lending market

The state of the housing market today has pushed homebuyers into one of two camps: those who feel they missed out on their opportunity to capitalize on low rates and high appreciation, and those who desperately need to move and will largely be undeterred from a negative market shift just by nature of their circumstances. Such a reality stands in stark contrast to what we saw even a few short months ago, when the FOMO (fear of missing out) was real and correctable and everybody wanted a piece of the action. The FOMO homebuyer is now just trying to weather the storm, as we’ve seen in recent weeks with the dips in demand and applications.

But the homebuyer that needs to move is still out there looking for the right home and the right partners to help them get it. They know the homebuying process right now is going to be more challenging both logistically and financially. They also know that a lender can compound those challenges or reduce them to a mere speed bump rather than an insurmountable hurdle.

For lenders who prioritize providing exceptional experiences, there’s never been a more perfect customer — or a better opportunity to capitalize on the value they deliver that many others don’t.

The greater the need, the better the service

How lenders, particularly local ones, service their customers and loans over the next six months will be the greatest factor in their ability to survive the market shift.

There are two reasons for this. First is their ability to maintain short-term profitability even as fewer people search for homes. That’s simple enough: When there aren’t as many loans, capitalizing on the ones that come through become exponentially more important.

With all other factors like rates and costs being relatively equal, the difference will always come down to the elements that comprise the customer experience: responsiveness, time to close, one-on-one engagement and education, local market expertise, transparency and human connection.

These things you can absolutely put a price on and brings me to my second point about the role customer service plays in survivability: future revenue.

How exceptional service creates long-term ROI

When the opportunity to refinance comes, it will come for just about everyone. As early as the first quarter of 2024, we may begin to see a seismic boom in refinancing for millions of homeowners. When they pick up phone, it’s easy to see how spending an extra couple hours with a customer now can increase their likelihood to call you instead of a new lender.

The same, of course, is true for the rest of the market. If lenders can push through the notable decline in retention. A 2021 report from Black Knight found that only 18% of borrowers kept the same servicer across multiple transactions at the end of 2020. Cash-out refinances fell to 11% retention, while rate-and-term refinances hovered at 23%.

The biggest reason? Poor service and an overreliance on digital tools. The latter often drives the former, as lenders over the last several years leaned so heavily into technology to meet heightened demand and volume that they inadvertently pigeon-holed customers and failed to compensate for a dominant digital experience with a more personable human one.

The decline in origination volume in recent weeks and for the foreseeable future only reinforces the need for lenders to invest in service as much as technology.

Because while repeat customers are a rarity in lending, they don’t have to be. It’s just been the price lenders have paid for not focusing on the thing their customers want most: better service.

Eric Bernstein is co-founder and president of LendFriend Home Loans.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the authors of this story:

Eric Bernstein at [email protected]

To contact the editor responsible for this story:
Sarah Wheeler at [email protected]

Source: housingwire.com

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An unfamiliar city can be more than a little unnerving. Getting to know the area while simultaneously trying to make friends can be scary. Joining a volunteer organization can help you achieve both goals at once.

Volunteering is not only rewarding, but it also gives you a chance to meet other people in your area and build networks. If you’re renting in a new city, networking is an important way to make friends and contacts. Familiar faces will make you feel more at home.

There are numerous ways to get involved with charity organizations, non-profit foundations, or religious groups. Check out the information below on how to find volunteer opportunities, no matter where you call home.

Think about what kind of activities you enjoy, and look for similar volunteering events or organizations. If you find the list growing too long, limit your possible choices to the top five.

It’s also a good idea, but certainly not necessary, to tie in your skill-set with a charity event. Many organizations need assistance building new homes, tending to the elderly, painting over graffiti, or raising money for a cause. There are many volunteer opportunities for just about everyone to lend a helping hand.

Disease can cause human suffering, but it also brings people together. Volunteers offer significant contribution through their assistance and compassionate outlook of the struggle with Alzheimer’s, breast cancer, HIV/AIDS and other deadly diseases.

Nearly every disease has an opportunity for involvement. For example, the National Breast Cancer Association encourages volunteers to help host fundraisers to raise money in the fight against breast cancer. The National Multiple Sclerosis Society also allows you to search for local volunteer opportunities online. No matter that the disease, there’s probably something going on in your area. If there are no events, why not take the initiative as a new renter and set something up?

Are you an animal lover? The best option is to volunteer at your local shelter. Many of these shelters are connected to the Animal Humane Society, which offers plenty of ways to care for a variety of different animals. Inside the shelter, you’ll find opportunities to help not only cats and dogs, but also rabbits, guinea pigs, birds, reptiles, pot-belly pigs and other animals in need of assistance. You can take dogs on walks, or assist with nail clipping, feeding, bathing or grooming. Even if your rental policy doesn’t permit pets, caring for these animals lets you connect them with other adoption opportunities. Your furry friends will definitely thank you for your hard work.

Another way to impact the community and become familiar with the city is at your local volunteer fire or emergency medical service department. These departments are active throughout many areas of the country. Not only will you have the opportunity to save lives, but you will build camaraderie with other local volunteers.

Check with your local hospital to see if they know of any programs requiring volunteer assistance. You might be directed to a nursing home needing you to come in weekly to read to the elderly, or you might be asked to assist with a hospital’s fundraising project.

If you enjoy sports or the great outdoors, there are plenty of ways to be active, have fun, and help out your neighbors. For starters, youth sport leagues often need coaches and assistant coaches to help develop training programs, and teach kids about basic skills and teamwork. If you’re a parent, this is a fantastic way to participate in your kid’s life and help his or her teammates.

The Boy and Girl Scouts as well as other groups have local chapters around the country, and they’re often looking for scout leaders and other volunteers to help young people learn values, earn an appreciation of the outdoors, and learn about civic participation. These types of organizations are a great way to give back to the community.

Many people want to help those experiencing poverty or homelessness, as they are often the most vulnerable members of society. Organizations like Habitat for Humanity help build homes for those who are homeless or on a low-income. Local soup kitchens, homeless shelters and food pantries are always looking for new volunteers as well, which provide you with endless ways to support those facing poverty.

Do you know of a special charity or volunteer organization you want the world to know about? Let us know in the comments or share with everyone via Twitter, and spread the good word!

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Inside: Learn why appreciation matters and how to express it in a more meaningful way. Also, find ways and gifs to say I appreciate you. We appreciate you.

Have you ever been told how much or many things someone has done for you, but it just felt like the person was trying to get something from you?

I know I have.

In a perfect world, we would all be appreciative of what others do for us and those who care about us in our lives. We should never forget that there are people out there doing the best they can with their time and energy (not always easy) because they love us unconditionally.

When you say thank you, it means the world.

People are quick to forget how important people in our lives really are and don’t appreciate them enough. But all that changes when we show appreciation for others; not only do they feel appreciated, but their lives start to revolve around us even more!

In fact, giving thanks and showing appreciation will make you happier (source).

So, how exactly do you say I appreciate you and truly mean it.

What is appreciation?

Appreciation is a feeling of gratefulness for what has been received.

It can be directed towards people, things, or events. When we feel appreciated, it fills us with warmth and happiness. We may find that our attitude and outlook on life become more positive as a result.

The meaning behind the words is powerful.

Why is appreciation important?

There are many reasons why appreciation matters.

For one, it makes the person who is being appreciated feel special and valued. It also helps to build closer relationships between people. When we’re appreciated for our efforts, we’re more likely to try harder next time and to be motivated to do our best.

Furthermore, appreciation can help to smooth over any misunderstandings or hurt feelings that may have arisen previously.

We need to let people know when we do things wrong and apologize for it–and we also need to express our gratitude for the good things they do.

Most importantly, appreciating others makes the world a better place!

There are many reasons why appreciation matters, including the following:

  • It makes people feel good about themselves and appreciated.
  • It strengthens relationships.
  • It motivates people to do more.
  • It helps people feel more secure in their jobs.
  • It increases loyalty and commitment to the organization.
  • It encourages people to go above and beyond the call of duty.

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

What are some ways to show appreciation?

There are many ways to show appreciation, and you can choose what type of appreciation best suits the person.

Expressing gratitude is important because it lets someone know how much they mean to you.

A thank you note is the most common form of appreciation. Other popular examples of ways to show appreciation include hugs, small gifts, or flowers.

Any act of service is also a good way to show appreciation.

How can appreciation improve our relationships?

When we appreciate someone, it makes them feel good. It shows that we care about them and that we value their presence in our lives. When we take the time to express our gratitude in a thoughtful way, it can really brighten someone’s day and make them feel special.

There are many ways to show appreciation, but some of our favorite methods include sending small gifts, expressing interest in what the other person is saying or doing, and simply asking the recipient what they would like most.

No matter how you choose to do it, being appreciative is a great way to improve any relationship!

A small gesture can go a long way.

In fact, expressing gratitude will improve your relationship.

Ways to Say I Appreciate You

There are many ways to show appreciation for someone, and it often depends on your relationship with that person.

Tell them you appreciate something they did or said.

Here are ways you can verbally say I appreciate you:

  • “Thank you.”
  • “Thank you so much.”
  • “You really came through for me and helped me out.”
  • “I am so grateful for you.”
  • “You don’t know what this means to me.”
  • “I appreciate you taking the time for me.”
  • “You are so generous.”
  • “You are so thoughtful.”
  • “You are amazing.”
  • “Wow, I am speechless.”

There are thousands of ways to say “I appreciate you.” The key is in your delivery of the message. Non-verbal communication is more important than the words that come out of your mouth.

Here are some other popular ideas to show you appreciate someone:

  • Write a heartfelt letter (or email) expressing your gratitude.
  • Thank people in person.
  • Give them a pat on the back or high five.
  • Bear hugs are always loved!
  • Make a donation in their name to a charity they support.
  • Organize and participate in an activity they love, such as a picnic or game night.
  • Create or contribute to an online tribute or memory book.
  • Put together a photo album of cherished memories.
  • Invite them to lunch and listen closely to what they say.
  • Give them an unexpected gift, such as a book, a favorite candy bar, or flowers.
  • Give them their favorite food as a treat.

If someone does something extra for you, thank them and show appreciation.

Saying “thank you” is a small gesture that can have a big impact. It costs nothing but it conveys a lot of appreciation and respect.

How can we show appreciation to our family and friends?

Showing appreciation to our loved ones is one of the most important things we can do as humans. Fortunately, there are many ways to show gratitude, both big and small.

Here are a few examples:

  • Say thank you! A simple “thank you” goes a long way.
  • Write a thank you card. This is a more personal way of showing your appreciation. Use this list of reasons I love you.
  • Bring flowers. Flowers brighten up any space and bring a sense of hope and peace.
  • Cook or clean for someone who needs it. This act of service often leads to a positive response from the recipient, making both parties happy in the end.
  • Run errands. Additionally, small gestures like helping someone out with errands can also relieve some stress.
  • Take care of children/elderly parents. This is an easy way to help someone out and say thanks.
  • Encourage them FI. Many people are confused about financial freedom. Show them how to FI.
  • Share appreciation quotes on social media or in conversation. There are lots of great quotes out there about being grateful, so find ones that resonate with you and share them with your friends and family.
  • Talk about a time when someone showed you appreciation in a meaningful way. When we take the time to reflect on moments where we felt appreciated, it makes those moments even more powerful.

Our community is our friends and family. These are the people that will be with you through thick and thin. So, make sure to show appreciation to them the most and the most often!

How can we show appreciation at work?

There are many ways to show appreciation at work with your co-workers. Some people might prefer words of gratitude, while others may appreciate a gesture or gift.

No matter what someone’s preference is, there are plenty of ways to show appreciation in the workplace.

One way to express gratitude is through different actions that include words, gestures, and gifts. Here are some work-specific examples:

  • Say “thank you.” Words are powerful
  • Write a thank-you note or email. Simple and great way to show your appreciation.
  • Bring up the appreciation during a meeting. Another way to acknowledge someone’s hard work is by simply acknowledging it–for example, if a co-worker does something for you, say “thank you.”
  • Send a Gem Award. Many companies offer small bonuses to recognize other employees for a job well done. Nominate them.
  • Motivate with Quotes. Take one of the millionaire quotes to show appreciation and keep everyone motivated.

These small acts help increase team velocity and morale, making the workplace more pleasant for everyone involved.

How can we show appreciation to our employees?

Showing appreciation for employees is a great way to build a positive work environment and express your gratitude. It also helps keep morale high and lets employees know that they are valued members of the team.

However, it’s important not to take your employees for granted–be there when they need you and do something special every once in a while to show how much you care!

  • Make it clear that you value their contributions.
  • Give them a shout-out in front of the group.
  • Tell them you appreciate their hard work and dedication.
  • Find ways to give employees more responsibility and autonomy at work.
  • When you have a meeting, ask people to say one thing they like about other employees.
  • Show them the importance of becoming financially independent.
  • Thank people for doing a good job on a project or task by giving them more challenging opportunities to grow in the future.
  • Tell them how their work has made a difference in your life.
  • If you have to criticize, do it privately and only if necessary.
  • Make sure they know you are there to support them.

In the workplace, giving gifts can be misconstrued so make sure you focus on being a supportive leader and boss. Also, you can always bring in lunch or breakfast for the whole team.

By showing appreciation to your employees, you will cut down on those good excuses to miss work.

I appreciate you in Spanish

As I’ve mentioned before, each language has different ways of showing gratitude. In Spanish, there are a few phrases that are commonly used to say “thank you.” Some of these common phrases include “gracias,” or “muchas gracias;” which mean “thank you” or “thank you very much.”

It is important to use the right phrase depending on the situation and who you are speaking to.

To say I appreciate you in Spanish, you would say:

te aprecio

If you wanted to really express your gratitude even more and say, “I appreciate you very much.”

te aprecio muchísimo

Learning another language is a great skill. In fact, many people have had great success with Rosetta Stone.

How to Respond to I Appreciate You or We Appreciate you

Acknowledge the person when they do something nice for you–even if it’s just picking up some milk from the store on their way home from work. Touching base regularly allows both parties to feel appreciated and strengthens the relationship over time.

It is important to give a thank you back when someone does something nice. It is also important to acknowledge their work and show that it’s appreciated. When receiving gestures such as this, it’s important to show appreciation by saying “I appreciate you” in return.

Does I appreciate you mean I love you?

There is no one-size-fits-all answer to this question, as the meaning of “I appreciate you” can vary depending on the context.

However, in general, saying “I appreciate you” usually means that you are grateful for that person and what they have done for you. It can also be seen as a sign of appreciation and respect.

Saying “I appreciate you” can be a difficult thing for some people. It might feel like they are saying “I love you” and that can be a scary prospect for some.

However, appreciation is an incredibly important emotion and it should not be withheld.

There are many ways to show appreciation, including, but not limited to, verbal compliments, thoughtful gifts, and kind deeds.

For those in a close relationship, “I appreciate you” could also mean “I love you.”

I Appreciate You Gifts

Many people turn to gifts to say I appreciate you.

It is the easiest way to say thank you.

The whole world wants to tell their recipient that they appreciate them.

These I appreciate you gifts are perfect for any person in your life!

Here are the best gifts to show a recipient you appreciate them:

These are for the husbands, boyfriends, and significant others – specifically written for the guys in mind.

Perfect gifts to say I appreciate you to all of the women in your life!

I Appreciate you GIF

Okay, I will be honest with you! Personally, I love using GIFs! Like. all. the. time.

I find them some of my favorite ways to express what I truly mean. We live in a digital world, so you might as well explore my top 10 favorites I appreciate you gifs.

Also, this is where you can find them when sending a text message to others.

I Appreciate You Quotes

Being grateful is one of the most important things we can do for ourselves and for those around us. It helps us to stay positive, build strong relationships, and feel happier overall.

Here are a few of the most popular I appreciate you quotes:

  • “What would I do without you in my life.”
  • “Your thoughtfulness will always be remembered.”
  • “Words cannot express my feelings, nor my thanks for all your help.”
  • “As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.” – JFK
  • “You cannot do a kindness too soon because you never know how soon it will be too late.” – Ralph Waldo Emerson
  • “Never let the things you want make you forget the things you have.” – Anonymous
  • “Thank you for staying by my side even though I tried to push you away.”
  • “Thank you for accepting me as I am, with my virtues and defects.” – Jenni Rivera
  • “When I count my blessing, I count you twice.”
  • “There’s no possible way, I could ever repay, How I wish, there were more I could do, But, I thank you my friend, my friend to the end.” – Jim Thistle

Write handwritten notes expressing your gratitude by starting off with one of these I appreciate you quotes. This is the best way to show someone how much you appreciate them!

We appreciate you in our everyday lives

Showing appreciation is a key way to maintain healthy relationships with the people around us. It can be difficult to know how to show appreciation, especially if we don’t feel comfortable putting our feelings into words.

However, there are many ways to show appreciation, and it’s important to find what works best for both the giver and the recipient.

Some gestures that show appreciation are small, such as sending a thank-you card or mentioning that you appreciate something the person has done for you. Other actions can be more personal, such as touching farewell letters to colleagues who are leaving your company or those who have passed away.

And finally, there are everyday expressions of gratitude that we can all do in our lives.

Humans have an innate need to feel appreciated, and when someone hears a few words of kindness, they get an energy burst that makes them feel good.

Know someone else that needs this, too? Then, please share!!

Source: moneybliss.org

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I have a secret…

I have a little secret for you.

Your broker might not have your best interest in mind when they make recommendations to you.

In fact, brokers can legally put their interests ahead of yours. 

Did you catch that?  

Translated that means that your broker can get a speeding ticket for going 75 mph on the interstate, but won’t get punished for selling you a crap investment that makes them a bunch of money.

This is because most brokers operate under what’s called the suitability standard, which simply means the securities they recommend must be appropriate for you given your financial profile; however, many of the securities that can be considered suitable may be far from the best investment options available at a particular time.

How do you like them apples?

You may be surprised to learn that brokers working under the suitability standard are not legally obligated to find the best prices or the best investment options available at a particular time. As a result, your broker may offer you securities that provide lower returns and carry more significant risks than other alternatives as this may be more profitable for the broker. The suitability standard can apply to brokers that sell insurance, stocks, annuities, or other investment types.

1. Brokers Make Money Even if You Don’t.

This is because of the commissions-based compensation model presently used by many brokerage firms. Let’s say your broker convinces you to buy into XYZ stock at $50 per share. If the price subsequently increases to $60, than your broker may call you and advise you to buy more of the same security because of the 20% appreciation in price. This transaction would then generate a commission for your broker.

On the other hand, let’s say that the same investment in XYZ stock instead dropped to $40 per share. In this case the same broker might call you and still tell you to buy more of the same security because it is now less expensive than it once was and should therefore be considered a bargain. This transaction would also generate a commission for your broker.

Great for them.  Not so much for you.

As you can see your broker’s success can have little relation to your own. This represents a misalignment of interests that may cause your broker to benefit at your expense.

2. High commissions are a good thing right?

Brokers may choose to offer you only those investments which pay the highest commissions. To illustrate this point let’s consider another example. Let’s say that investment 1 is the best investment for you, but it offers no commissions to your broker.

On the other hand investment 2 is a worse investment, which pays 5% commission. Under the suitability standard your broker is not obligated to offer you investment 1 and may instead sell you investment 2 in order to collect the commission on the transaction. This conflict of interest is currently permitted under the suitability standard, which is applicable to many brokerage firms.

Isn’t that special?

3. Looks good on paper.

Your broker may sell you an investments that is illiquid or highly risky. This is due to the fact that brokers are often associated with particular issuers of securities or certain investment companies.

As a result they may be limited to offering only the proprietary products sold by their affiliates even though other more attractive investment options may be available in the market. They may also be restricted to particular list of securities and may be compensated to offer one investment over another at any time.

One of the worst examples that I witnessed this was with a portfolio of a friends mom.  Her broker had sold her what he called a “safe investment” which was a limited partnership.  While some limited partnerships could be considered good investments, this particular one was Medical Capital Holdings.

What’s the big deal about that?  Well, this particular limited partnership ended up being a fraud and most investors lost everything that they invested into it.   What makes the story even worse, is that this particular broker thought it was “suitable” to put over 1/3 of her portfolio into it.

4. Their commissions can eat away your returns.

If you’re paying commissions on a per-trade basis, you may be spending more than you might expect.

For example, if you’re charged 2% per trade, then making just three trades per year could result in you paying 6% of your overall portfolio in commissions annually.

5. Alphabet jumbo soup.

Brokers may be using deceptive titles to give you the wrong impression about their compensation model and qualifications. Currently, the shear abundance of professional designations being used within the financial services industry is confusing even to the most experienced investors. However, understanding the differences between these titles could have a dramatic effect on your long-term investment results and overall satisfaction.

As an example, the term financial advisor is one of the most used terms in the industry; however, many of the individuals using this title are sales people looking to meet quotas by selling financial products. They may in some cases sell non-marketable securities, which include long-term commitments, excessive fees, and a high level of risk.

Titles with the word “senior” — Certified Senior Advisor (CSA) and Certified Senior Consultant (CSC), for instance — have come under a great deal of scrutiny.   I get offers in the mail all the time to buy designations.   Don’t let the alphabet soup impress you.  The only one that should in the financial planning profession is the CFP® designation. Other notables are the CFA and CPA designation.

6. I have a sales quota.

I love when I get a statement from a competitor that is sponsored by a mutual fund or insurance company.  The broker claims to them that they have their clients best interest at heart and  can utilize all types of investment choices, except that they only investments I see are from that companies proprietary products.

Hmmm……now whose best interest is first?  I assure you not the client.

7. My records clean….kind of

Your broker is not obligated to tell you if there’s anything on his or her record.  And why they should they?  It’s reported that 70% of prospective clients do not do a background check on the broker before hiring them.

Want to make sure that your broker doesn’t have a record like Bernie Madoff?  Head over to FINRA BrokerCheck to see what’s on your brokers record.

8. It could be better somewhere else.

With a broker you’re dealing with a sales person who may or may not have your best interest in mind. On the other hand, registered investment advisors, also known as RIAs are firms which operate under the fiduciary standard, which means that they are legally obligated to put their client’s interests first at all times.

As an independent registered investment advisor, Alliance Wealth Management, LLC was founded as a welcome alternative to the traditional brokerage model so many investors have become accustom to. We are compensated only by management fees paid directly by our clients.

How do you pay you broker?  If you don’t know, maybe it’s time to find out.

Source: goodfinancialcents.com

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We often hear stocks and bonds mentioned together as if they’re pretty much the same thing.

But are they? Not really.

In fact, it might even be that most people understand stocks even better than bonds. After all, relatively few people own bonds individually.

So, what is a bond, and how may it fit in your overall investment portfolio?

So, What Is A Bond, Exactly?

Bonds are securities representing debt obligations, usually issued by either corporations or governments.

They’re normally issued in denominations of $1,000 and pay interest twice each year. What’s more, the interest rate is fixed for the duration of the bond.

And if the bond is held to maturity, the investor will be paid the full face amount of the security.

As an example, if you purchase a bond for $1,000, with an interest rate of 4% and a term of 20 years, you will be paid $40 per year – $20 every 6 months – until the bond is paid in full 20 years later.

Bonds are much like certificates of deposit, except that they are issued by institutions other than banks, and have much longer terms. They also lack the FDIC insurance coverage that comes with bank-issued CDs.

Bonds are long-term securities, with terms greater than 10 years.

However, investors often lump any type of fixed income investment into the bonds category.

That can include securities with a term of anywhere from a few months to 30 years.

What Types of Bonds are There?

There are 3 primary types of bonds:

  1. Corporate
  2. US Treasuries
  3. Municipal Bonds

Let’s take a look at each.

Corporate Bonds

These are bonds issued by publicly traded corporations and often listed on public exchanges. They can be used for a variety of business purposes, including paying off old debt, expanding operations, raising extra cash, or even acquiring competitors.

They’re generally considered less safe than US Treasuries and pay a higher rate of interest as a result.

Exactly how much interest they’ll pay will depend upon their bond rating, as issued by large bond rating services, such as Moody’s or Standard & Poor’s.

Bonds with ratings of BBB through AAA are considered the safest and rated as investment grade.

Lower rated bonds once referred to as “junk bonds”, are now called “high yield bonds”, and pay much higher rates of interest. Naturally, such bonds are also more likely to default and considered riskier.

Corporate bonds can generally be purchased through investment brokerage firms. They’re typically bought in denominations of $1,000, but you may have to buy a minimum of 10 bonds, or $10,000. Both purchase and sale will generally involve a small commission.

US Treasury Securities

US Treasury Securities come in a wide variety of terms. Technically speaking, only one security is actually a bond, which is the US Treasury bond. But just to clear up any confusion, we’ll discuss the various types of US Treasury securities that are available.

US Treasury Bonds. These are the longest term treasuries, with a maturity of 30 years. They are available in denominations of as little as $100 and pay interest every six months.

US Treasury Bills. These are the shortest term treasuries, with maturities ranging from a few days up to 52 weeks.

They can be purchased in denominations of $100, but are bought at a discount.

For example, you might purchase a Treasury bill for $99, which you will redeem at maturity for $100. The additional $1 paid represents interest paid on the security.

US Treasury Notes. Notes have maturities of 2, 3, 5, 7, and 10 years. They pay interest every six months and are available in denominations of $100.

Treasury Inflation-Protected Securities (TIPS). These are interest bearing treasuries that also increase your principal based on changes in the consumer price index (CPI). They come with maturities of 5, 10, and 30 years. The interest paid is lower than Treasury securities with comparable terms, but the principal additions are meant to keep the value of the security up with inflation.

US Savings Bonds. Available as EE and E savings bonds, they are available in denominations of $25 and earn interest for up to 30 years. There is also the I Savings Bond, which like TIPS, increases the principal value of the security based on changes in the CPI.

Where to Buy US Treasury Securities

All US Treasury Securities can be purchased, held, and redeemed through the US Treasury department’s web portal, Treasury Direct. They can also be purchased through investment brokerage firms, though there may be a nominal fee for both purchase and sale.

Municipal Bonds

These are bonds issued by local governments, including states, counties, municipalities, and their various agencies.

They have the advantage of not being subject to federal income tax. And if you are a resident of the same state where the bonds are issued, the interest will also be free from state income tax.

However, if you live in a different state, the interest will be taxable in your state of residence, if it has an income tax.

Municipal bonds can generally be purchased through investment brokerage firms, and once again for a small commission on both purchase and sale.

For those looking to get started in bond-investing, Worthy Peer Capital is a good place to start.

What are the Benefits of Bonds?

Bonds have two basic benefits, at least compared to stocks.

The first is relative safety. While stock prices fluctuate, bonds are repaid at the full face value if they are held to maturity. This makes them a solid diversification away from stocks.

Holding a certain percentage of your portfolio in bonds can reduce the overall volatility and has been shown to improve long-term investment results.

The second benefit is steady income.

The interest paid on bonds is a contractual obligation. Unlike dividends, which can be either reduced or eliminated by the issuing institution, the interest rate set on a bond upon issue is guaranteed until maturity.

This provides the bondholder with a steady source of income, even while stocks may be fluctuating in value.

There’s a third benefit bonds have in common with stocks, and that’s the potential for capital appreciation. It has to do with changes in interest rates.

Let’s say you purchased $10,000 of a certain bond with a 5% interest rate.

Two years later, prevailing interest rates fall to 4%. The value of your bond increases to $12,500, which gives it a 4% yield.

You then sell the bonds and collect a $2,500 capital gain on the transaction.

What are the Risks of Bonds?

Despite the advantages of holding bonds, they’re not without risks. There are two primary risks.

Issuer default. This is a bigger concern with corporate bonds. A company can fall on hard times, and default on its debts. Not only would you lose the interest income, but the principal as well. There are different ways this can play out. In a corporate bankruptcy situation, you may receive partial value of the bonds.

But in an extreme situation, the bonds may be declared completely worthless.

Since they are issued by the US government, Treasury securities are considered immune from default. Municipal bonds do have a slight possibility of default, but in fact, defaults have been very rare on these securities historically.

Interest rate risk. In the last section, we talked about the possibility of bonds providing capital gains if you purchase a bond then sell it into a market with lower interest rates. But the opposite can happen if interest rates rise.

Let’s reverse the example given earlier. You purchase $10,000 in bonds paying 4%. Two years later the prevailing rate on bonds is 5%. You sell the bonds at $8,000, which is the principal value that will produce a 5% return. In the process, you take a $2,000 capital loss.

This is referred to as interest rate risk – the risk that the value of your bonds will fall if interest rates rise.

The major disadvantage with bonds is that they have an inverse relationship with interest rates. Rising rates equal falling values while falling rates equal rising values.

You should also be aware that US Treasury bonds are also subject to interest rate risk, even though the principal value of the bonds is guaranteed at maturity.

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What are Bond Funds?

So far we’ve been talking about purchasing individual bonds.

But you can also invest in bonds through bond funds. Bonds are sold through funds, just the way stocks are. Each is a portfolio of bonds held in a single investment unit. The fund may hold hundreds of different bond issues and will be run by an investment manager.

It’s important to understand that there is a wide variety of bond funds. In fact, you can choose a fund based on your own investment preferences.

For example, you can invest in a bond fund that holds only US Treasuries, municipal bonds, or corporate bonds. You can also invest in funds that hold foreign bonds.

Some very specialized bond funds invest only in securities with limited terms.

For example, a bond fund may hold sureties due to mature within 5 years.

That can include five year Treasury notes, but it can also include 20 year corporate bonds due to mature within 5 years. Investors often choose shorter-term bond funds to minimize or eliminate interest rate risk.

You can also invest in bond funds that hold only non-investment grade bonds (bonds with ratings below BBB). These funds are riskier than the ones that hold higher-quality bonds, but they provide higher interest rate returns.

An investor may take a small position in a high-interest bond fund to increase overall yield on a larger bond portfolio.

Bond funds offer professional management, as well as greater diversification.

However, they typically charge commissions, known as “load fees”, that can range between 1% and 3% of the fund value.

You can invest in bond funds through investment brokers, or through large mutual fund companies like Vanguard and Fidelity.

How Much of Your Portfolio Should You Hold in Bonds?

Virtually everyone who invests should have at least some money invested in fixed income investments, including bonds.

They provide greater stability in an investment portfolio and are particularly valuable during downturns in the stock market. Not only are they more likely to retain their value in a market decline, but they’ll also pay interest income along the way.

But there’s much debate about exactly how much you should hold in bonds. Different factors have to be considered, including your age, your investment time horizon, and your market risk tolerance.

But there are some formulas that reduce the allocation percentage to a mathematical equation.

One that’s grown popular in recent years is 120 minus your age. For example, If you’re 40 years old, 80% (120 minus 40) of your portfolio should be held in stocks, while 20% should be held in bonds.

If you’re 60, then 60% (120 minus 60) should be held in stocks and the remaining 40% in bonds.

The formula might not be entirely fool-proof, but it at least accounts for your age and investment time horizon.

For example, notice that as you get older, the bond portfolio percentage increases.

This is consistent with what investment managers typically recommend. The closer you get to retirement, the lower your stock exposure should be.

It doesn’t really take risk tolerance into account, but you can use the formula as a starting point, then adjust the allocations based on your own personal tolerance.

Final Thoughts on What is a Bond

So there you have a high altitude view of bonds.

As you can see, bonds are probably more complicated than most people believe. They come in different shapes and sizes and are issued by various entities. Each has its own strengths and limitations.

Armed with just a general understanding of bonds, you should be able to appreciate the need to hold at least some part of your portfolio in them. Most investors don’t hold individual bonds since it’s difficult to adequately diversify.

Bond funds are usually the better choice for small investors, particularly if you’re interested in specialized bonds, like municipal bonds or high yield bonds.

One final word on bonds…if you’re looking for an asset that’s totally safe, bonds may not qualify.

They are subject to the risks discussed above, despite being less risky than stocks.

But if you want complete safety for at least part of your portfolio, then you’ll need to look at CDs, money markets, and high yield savings accounts.

Source: goodfinancialcents.com

Apache is functioning normally

The quiet luxury trend is clapping back on the pandemic era’s boom of maximalist interiors. While many of us still gravitate toward dopamine-inducing colors and squiggly shapes, a new iteration of minimalism is setting in. Inspired by cultural moments like Sofia Richie Grainge’s South of France wedding, the widespread popularity of Succession, and not many are calling it out, but the uniforms of many of the biggest tech giants—yes, Elizabeth Holmes’ black turtleneck counts—quiet luxury is anything but silent in our design-obsessed world. And though these examples may evoke an emotive understanding, the specifics of the aesthetic are a bit harder to trace.

For answers and insights, we looked to some of the biggest designers in the game. Below, our three experts share the ins and outs of the quiet luxury trend. From tracing its rise to popularity to essential pieces to styling tips for bringing the trend home, consider this your comprehensive guide to all things quiet luxury.

Featured image courtesy of Kate Marker.

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Image by Jenn Verrier. Styling by Purple Cherry Architects and W Design Collective.

The Design Experts

Kate Marker of Kate Marker Interiors and Kate Marker Home. Kate is the founder and owner of Kate Marker Interiors, a residential interior design firm, and Kate Marker Home, which offers a hand-picked selection of furniture, home decor, rugs, & lighting 

Caitlin Kah of Caitlin Kah Interiors. Caitlin Kah is a Palm Beach-based interior designer whose fresh and livable interiors range from traditional to contemporary. She has worked with diverse clientele on an eclectic mix of residential and commercial projects across the U.S. and abroad.

Alexandra Epstein, Lead Interior Designer at Purple Cherry Architects. A graduate of The Art Institute—where Alexandra deepened her innately instilled appreciation for beautiful things, art, and composition—she has gone on to create a diverse portfolio of projects. Whether contemporary or traditional in style, Alexandra’s ability to create well-curated spaces to be lived in and enjoyed is evident.

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Image courtesy of Kate Marker

What is quiet luxury? How would you describe the aesthetic and what words define it?

“Quiet luxury is more of a state of mind,” according to Epstein. Standing as an aesthetic that bridges fashion and home décor, she describes quiet luxury as a “refined elegance.” To capture the entirety of the trend, designers stray from anything extravagant, garish, or gaudy. Luxury is only half of the moniker—curating an understated color scheme featuring “a neutral palette filled with luxurious textures” is the easiest way to allow the aesthetic to come through.

Marker’s definition builds on this, emphasizing a “restrained sense of warmth and elegance.” Essentially, the easiest way to create quiet luxury is to allow pieces to speak for themselves. Kah adds that luxury comes forth in paying attention to the tactile quality of your space: “layered textiles, soft ambient lighting, luxuriously comfortable upholstery, fluffy bedding, and soft rugs underfoot” are all key components to keep in mind when curating quiet luxury in your home.

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Image by Jenn Verrier. Styling by Purple Cherry Architects and W Design Collective.

Quiet luxury has swiftly taken the design world by storm. What accounts for its influence and what is driving the trend?

Kah is quick to cite our collective need to come home to a relaxing, calming space. “By limiting pattern and color, we can recharge in a more restful way,” says the designer.

If we zoom out, however, we can see how the cultural zeitgeist gets communicated in this understated aesthetic. According to Epstein, “quiet luxury has always had a presence.” Everything from Succession to Gwyneth Paltrow’s ski accident court case has brought the trend into the mainstream. But perhaps even more compelling is how the appeal is communicated across social media. “Fashion and home influencers have presented it as very streamlined and easily accessible,” she notes. And the most widespread representation of quiet luxury? The ubiquitous capsule wardrobe, where creams, blacks, navy, and whites reign supreme.

Quiet luxury also raises the question of design longevity. “Investing in pieces that stand the test of time requires careful consideration,” says Marker. The residual benefit of adopting quiet luxury, whether in your wardrobe or home, is that it opens up your budget for pieces you’ll love for a lifetime.

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Image courtesy of Kate Marker

What would you consider essential quiet luxury pieces? 

There are a few key pieces that instantly communicate quiet luxury. In fashion, Epstein loves a classic ballet flat, structured black bag, “sweaters in a variety of neutral tones,” and a gold bangle. (Essentially describing every outfit we’ve wanted to copy in every Nancy Meyers movie ever.) Translating the aesthetic to the home, she suggests investing in the following:

  • a wool throw
  • a leather-bound accessory (i.e., a box, desk blotter, tray, etc.)
  • a gold framed wall or floor mirror
  • wooden picture frames

Marker’s quiet luxury favorites span larger pieces and adept details. “A well-upholstered sofa, linen or high thread count bedding, custom window treatments, a plush wool rug, and a distinguished vintage piece that tells a story.”

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Image by Jenn Verrier. Styling by Purple Cherry Architects and W Design Collective.

What styling tips can you share to bring the trend home?

Epstein’s tips emphasize the restraint inherent in quiet luxury. “Stick to a neutral palette, use textures to tell a story, keep with classic lines, and mix in found antiques.” While quiet luxury communicates minimalism, it’s important to be intentional about everything you bring into your home. She underscores the importance of bringing an old-world feel to the space, making it feel “clean but curated, lived in but refined.”

Quiet luxury is clean but curated, lived in but refined.

Marker agrees with the appreciation for older pieces, weaving in new accents here and there to create interest. She adds that materials and textures play a key role in creating quiet luxury and encourages opting for antique brass finishes “that provide a glow to add warmth to a space.”

I love Kah’s approach: she starts with a luxurious throw and curates a quiet luxury landscape from there. She’s all about emphasizing the simplicity of the aesthetic, encouraging homeowners to opt for crisp towels in the bathroom and beautiful candles. Whether translating quiet luxury to your home or wardrobe, think: easy elegance, always.

Source: camillestyles.com

Apache is functioning normally

This is a guest post by Hank Coleman who writes about personal finance, investing, and retirement on his blog, Money Q&A. Hank shares his story about how he and his wife decided to become landlords.

I will tell you that I don’t know the first thing about this topic, so I would encourage anyone that is considering it, to read this first before becoming a landlord. I know there are pros and cons into becoming a landlord, so weigh all your options before diving in. Enter Hank…..

Many corporations in America require their employees to move every so often in order to give them with career progression, new opportunities, and challenges as they move up the ranks.

My employer is no different and recently told me of an impending move.

Like many Americans, I’m faced with a daunting choice.

Do I try and sell my home or become a reluctant landlord?

The anxiety of losing large sums of money or equity is one of the greatest fears for most homeowners with an impending move. I wanted to share with you some of my family’s thought process as to how we came to our decision to become landlords for the first time instead of selling.

It wasn’t an easy decision, and everyone’s situation is different. You have to look at it almost like a business and weigh the cost and benefits of your decision before taking the leap.

The Drawback Of Selling Our Home

There are several drawbacks to selling our home. Even though my wife and I live in an area of the country that has not seen the dramatic nosedive in real estate values, we have not seen any appreciation in our home’s value either. We could sell our house for pretty much the exact same price that we purchased it for four years earlier. The real problem with that scenario is that it is dramatically still a buyer’s market when it comes to buying and selling a home.

The buyers call all the shots, and they can make a lot of demands. Most sellers can expect to pay most if not all of the closing costs for both parties. They can also see demands for fixing up the home or even large price reductions. Trying to negotiate with a buyer will not do much good either because there are so many houses still currently on the market. A buyer can literally go down the street in most cases and find a more accommodating seller who needs to close in a hurry.

The Benefits Of Being A Landlord

Now, you may be thinking to yourself that you don’t want to be a landlord. I really don’t want to be one either and have to deal with finding tenants, evicting them when they don’t pay, checking credit reports, fixing broken toilets, showing my house to potential renters, and all of that other garbage. That’s why I hired a property management company to do all of that for me. But, I do want to increase my family’s net worth over the long-term, and owning real estate even if it is just adding one house every few years or so is one way to continue to build wealth.

There are other financial benefits of being a landlord too that many people may not immediately associate with the job. Like any homeowner, landlords enjoy many tax breaks.

In fact, there are more tax breaks for rental real estate owners than regular homeowners. Landlords are eligible to deduct their costs of operating their new rental business from their taxes.

You can deduct the cost of things like your property manager’s fee, maintenance costs, insurance, mortgage interest, home warranties, and a host of other expenses that start eating into your profit.

Renting Our Home At A Loss

Even renting out your home at a loss may be a better option than selling it outright. Of course, most of these calculations depend on your individual situation, your mortgage, how much down payment you used, and a host of other factors. For my wife and I, the comparables for renting a home like ours was $1,300 per month in rent. Currently, our mortgage, PMI, insurance, and property taxes cost $1,350 per month.

Additionally, we chose to use a property management company to help us rent our home, and they charge 10% of the monthly rent ($130 in our case). So, right off the bat, we have a negative cash flow of $180 that we are paying out of pocket every month. But, I’m very happy doing so, and I will tell you why.

Using a closing cost calculator, I can estimate that it will cost me about $14,000 or more in real estate brokerage commissions and fees to sell my $200,000 home. If I am losing $180 per month or $2,160 per year, it would take me about six and a half years to equal that $14,000 upfront cost. It is the difference between dying a thousand cuts or getting my head chopped off in one fell swoop. I’ll wait the market out. Eventually, home values in America will start to rebound…eventually.

Just like home values, rents will not stay low forever either. In fact, rents in American a rising year after year. There is nothing holding me back from raising the rent on my home in a few years and generating positive cash flow later. Almost anything is better in my book than losing $14,000 upfront and watching almost every penny of my equity disappear by selling.

According to the US Labor Department, rents across America have been rising 2.4% year over year, and that data is not even adjusted for inflation. At that rate alone, I could raise the rent on my to $1,500 over the next six years just to keep up with the times.

Eventually, your home could become a mini pension fund during retirement. At our current rate of repayment, my wife and I will have our home paid off thanks to the help of our renters at about the same time that we will be retiring to play golf and live on the beach. Even if I still charged $1,300 per month at that same house 26 years from now, the $1,170 after paying the property manager will be pure profit every month straight into our pockets.

A few more homes providing passive income like that would allow me to completely replace my pre-retirement income. While becoming a landlord is not a dream occupation that everyone aspires to, it is not something to be completely dismissed before you even consider it. There are great opportunities to choose something other than simply selling your home, taking a big financial hit, and moving on.

Pros Cons Becoming a Landlord

Everyone’s situation is different. Some people thrive being their own landlord, finding tenants, and are handy with a hammer. Some people want to get out of a house or an area at all costs and do not mind eating the closing costs in order to do so. Everyone has to make their own choices in the best interest of their family, but I wanted to let everyone know that they should not feel backed into a corner.

There are other options out there rather than simply succumbing to a realization that you have to lose money in order to move to a new home or a new city. All it may take in your situation is a little bit of cost benefit analysis on which course of action is right for you and your family’s well-being.

Hank Coleman is currently an officer in the US Army and also spends his free time as a finance writer who has written extensively for many financial websites and publications in addition to his own blog, Money Q&A. Hank has a Master’s Degree in Finance, a Graduate Certificate in Personal Financial Planning, and is currently studying and constantly putting off taking the Certified Financial Planner exam. His dream is to one day retire from the Army, open his own financial planning firm, and try to be just like his CFP® Idol, Jeff Rose.

Source: goodfinancialcents.com