In chemistry, a catalyst is something that triggers a reaction — but the nature of the reaction itself depends on having the right elements in place to respond to the catalyst.
What brought to mind that tattered remnant of high school chemistry was thinking back on buying my first house.
I’ll explain how I got from home-buying to chemistry — and, in the process, hopefully share some pointers about what elements should be in place when you buy a home and what catalysts might trigger you to react to those elements.
The chemistry of home-buying
The reason I’m talking about home-buying in terms of chemistry is that there is more to buying a home than pure dollars and cents. Don’t get me wrong. The financials are important, and I’ve written a fair amount about some of the financial aspects of home-buying. However, what is equally important is your personal outlook.
Generally, the elements of your personal situation fall into place bit by bit over time, and you might not really notice how they are developing. It can take a catalyst to set everything in motion.
In my case, the catalyst was simple: Our landlord tried to raise our rent by $50. That doesn’t sound like much today; but at the time, it was 12.5 percent of the rent we were paying previously. More than that, it was a catalyst to us. We realized that renting meant being subject to that unpredictability every year when the lease term ended.
Once that catalyst sparked the idea of buying a home, all the right elements were in place for us to follow through on our decision. My career was progressing well, I had gotten married and we planned to have kids, and we had family roots in the area. If it hadn’t been for that catalyst, though, I’m not sure how long it would have taken for it to occur to us to buy a house. So, we have our landlord to thank.
Here’s how the chemistry of home-buying might come together for you.
How to know if it is time to buy a house
Here are some of the right elements for buying a home:
Career stability. This does not necessarily mean that you plan on staying in the same job, but that you have in-demand skills and that there is a healthy job market for those skills within commuting distance of the house you plan to buy.
Commitment to your area. It could come down to the weather, family and friends, arts and entertainment, or all of the above, but you need to figure out where you want to be for the long haul. It’s okay to be restless when you are young, but it is better if you aren’t that way after you buy a house.
Clarity about your household. It might take several years before you start to have clarity on what your household will look like in the future: Will you marry? Do you expect to have kids? Will elderly parents come live with you at some point? The more clarity you have about the size of your household in the years ahead, the easier it is to know what kind of home to buy, though it is always wise to make choices that build in a little flexibility as well.
Knowing yourself. Life plans and personal tastes take a while to evolve. Don’t rush into home-buying unless you have a good handle on what you want for the long term.
Affordability. This is an entirely different area of discussion; but if the dollars and cents don’t add up, not all the elements for buying a home are in place.
Catalysts can help you decide
Given the right elements, what can trigger you to act on them? Here are some possibilities:
A jump in rents. As I mentioned, that did it for us. It changes the current comparison between renting and owning costs, and makes you think about stabilizing your housing expense for the future.
Low mortgage rates. You should look at today’s mortgage rates as an opportunity that might not always be there. If home-buying is in your future, you might want to accelerate the timing to take advantage.
A change in household. Getting married or having a baby might mean you have to find a bigger place anyway, so you might think about doing that by buying.
A strong raise in pay. A meaningful bump-up — beyond the standard annual cost-of-living type of adjustment — could not only give you the financial means to buy a home, but it might also be a sign that your career is well enough on track for you to make that kind of commitment.
In short, besides the math of affordability, buying a home comes down to the chemistry of your personal situation. Perhaps if we had known so much was riding on math and chemistry, we all would have paid more attention in high school.
Over the years, I haven’t been too kind to the best-selling author, Robert Kiyosaki. He’s certainly built a successful empire, and a large community people respect him for his business acumen, his willingness to try or to appear to try to help others, and his advice. However, I’ve always found his advice thin at best and dangerous at worst. I received his latest book, Second Chance: For Your Money, Your Life, and Our World, and before opening the book to the first page, I decided to give Kiyosaki his own second chance — and read the book with an open mind. His publisher probably didn’t read my previous commentary before offering to send me a copy for review.
I read the entire book on a flight from Phoenix to Philadelphia, and my second chance paid off — I thought this book was an improvement over Kiyosaki’s earlier works(I’ve only read a few), yet not without its frustrations.
Kiyosaki uses several devices in his latest book to tell his story. The first is an all-out admiration of Buckminster Fuller, starting with the book’s dedication and infiltrating every chapter. This makes some sense, as Kiyosaki has always used some of Fuller’s literary techniques, which I’ll get into a little further down this page. Fuller was a futurist, and more than any of Kiyosaki’s other books, Second Chance also takes a look at the future and the decisions one can make therein as a way of dealing with the economic struggles of today’s post-recession world.
It was Kiyosaki’s so-called “poor dad” who first admired Fuller, and this early glorification set the wheels in motion for an approach to life that would favor the lessons of the author’s “rich dad.” (I’m ignoring the debate about whether “poor dad” and “rich dad” exist or are part of an allegory. The use in the book of Fuller as a driver instead of “rich dad” eliminates the need for debate, so readers and critics can focus on the words.)
Fuller, or “Bucky,” appears throughout the book as an inspiration to Kiyosaki through words of advice in Fuller’s own published words and in private conversations with the author. This explains much of who Kiyosaki is today. Fuller made up words or changed their meanings to encourage people to see the world differently, or as he saw the world, and Kiyosaki takes the same approach. It works. People who aren’t accountants or have a financial education — most people — would first read Kiyosaki’s books without a solid understanding of the terms “asset” and “liability” in a financial context.
Kiyosaki, years ago, saw the opportunity to make those words mean something else. And those who accepted Kiyosaki’s version of an “asset” became life members of a secret club. They “get it.” And if you disagree, you don’t “get it,” and you’ll never succeed in the way Kiyosaki wants you to succeed. For Kiyosaki and his followers, a house is a liability, not an asset. And if you don’t want to accept this version of reality, the author’s books, lessons, and seminars won’t do you any good because you don’t believe.
These redefinitions and others appear throughout Second Chance, but it seems to be Fuller’s pamphlet Grunch of Giants that had the most profound effect on Kiyosaki’s life. The bankers control the world, the government is out to get us, and the military-industrial complex something something. Grunch of Giants is an interesting read, but it’s just a little paranoid.
The second trope is familiar to Kiyosaki readers: the angst for traditional education and the glory for real-estate seminars. This appears so frequently throughout the book that it’s impossible to ignore. Kiyosaki’s companies produce real-estate seminars, so it’s no surprise he’s writing about the idea of getting a real education through this method as often as possible. I don’t recall him specifically selling his own seminars throughout the book, but it certainly plants a strong idea in the readers’ mind. If a reader comes away from the book thinking college is useless and the money for college is better spent attending a real-estate seminar each month, the first place that reader would go is to Kiyosaki’s own educational products.
Again, just like invented language, this concept exists as a filter. If you don’t feel the same way as Kiyosaki about traditional education, you’re not going to read his books and attend his seminars. If you did, you’d probably think they were wastes of time. He doesn’t want you. He wants people who are frustrated or unable to succeed in a college setting. They will make good customers. People without a college education are more likely to fall prey to people taking advantage of them.
The third recurring theme of the book is an idolization of wealth. Readers who buy this book are more likely to have goals to be wealthy than to have goals that go a little deeper — for instance, to use wealth to do good things for others. It’s not the simple get-rich-quick crowd of the 1980s, but it’s a more complex, grown-up version of that audience. The way the author uses the idolization is through frequent “question-and-answer” sessions, where it is implied that the reader is asking simple questions which Kiyosaki “answers.” The questioner in these exchanges is characterized as envious, curious, and a little slow; the answerer is characterized as rich, sophisticated, and absolute.
The book describes an exchange between Kiyosaki and a few construction workers. Kiyosaki drives up in a Ferrari, and the workers are envious, thinking they could never afford such a fancy car. Kiyosaki, in this story, proceeds to tell them they can, and that it’s just a matter of owning properties that put off positive cash flow, and that can be done without the education that the construction workers obviously do not possess. And here in this story, we see Kiyosaki positioning himself as the wealthy but down-to-earth, friendly guy who’s happy to teach unfortunate souls about something they will probably never be able to do. It’s the whole premise of the book — and Kiyosaki’s career. The readers are the construction workers, and Kiyosaki’s got the Ferrari the readers want. Please tell us your secret!
In Second Chance, Kiyosaki goes on record again with a prediction: There will be a market crash by 2016, which is the same prognostication he offered in an earlier book. The author believes that the recession of 2008-09 was partial fulfillment of that earlier prophecy. Oh, but he later demurs, and says that if the 2016 crash doesn’t happen, it would be due to artificial propping-up by the powers that be; thus, Kiyosaki stands to consider himself correct whether a crash (to which the latest recession when compared would just be a minor event) occurs by 2016 or not.
The book contains a number of misleading charts. In some cases, the data being represented in these chats doesn’t really prove the point that they author is trying to make, and in other cases, the data is represented in such a way that it is misleading. There is one such chart that supposedly shows that unemployment is rising for workers with at least some college education. The chart makes it appear that unemployment is decreasing for workers with just a high school education or less, and that’s simple a misleading graphical representation of data. Kiyosaki is careful in the text not to make an inaccurate claim about what the data show, but the visual representation allows readers to walk away with the wrong idea.
What Kioysaki might be getting right.
These annoying tropes aside, and the fact that the book contains no index and makes writing this article very difficult, there are many interesting ideas within the book that are worth discussing. Here’s what I liked reading about.
Three types of wealth. Kiyosaki borrowed the concept from another author, but discusses it in detail. “Primary wealth is resource wealth.” If you own oil — actual oil, not oil funds or ETFs or shares in companies that are involved in the oil industry — you have a protection that those with only tertiary wealth do not have. It’s not just oil — it’s fertile land, trees, and other natural resources, and Kiyosaki includes gold and silver in this category.
“Secondary wealth is production wealth.” Those who work directly (and own businesses that) produce food or other products, dealing with the resources owned by those with primary wealth, you have secondary wealth.
“Tertiary wealth is paper wealth.” This identifies the majority of Consumerism Commentary readers and myself. Savers, those with money in the bank or invested in stock market, fall into this category. This is the “affluent investor class,” and those who will be hurt hardest by the next (or any) market crash.
It’s true that shareholders and savers have the most to lose, but that doesn’t mean that those with secondary or primary wealth are fully protected. Businesses can fail, resources can dry up, and there’s always going to be an entity that more powerful than you — and I don’t mean God. Companies getting rich with oil in North Dakota are now finding that their lives can be upended in a matter of weeks when OPEC decides the price of oil needs to be lower.
The Cashflow Quadrant. From Kiyosaki’s other books, the “Cashflow Quadrant” makes an appearance here. The quadrants describe the type of work one might do and how the income from that work can be classified. I’ve been in all four quadrants: employee, self-employed, business owner, and investor. The quadrants are determined by tax law. If you’re self-employed, you pay the highest taxes — but what’s different between being self-employed and being a business owner? Well, even when self-employed, your working to get paid; a business owner is looking more at the value of an asset — the business — she is creating.
Basic principles in psychology. The author addresses a number of aspects of psychology that should be familiar to any student who has taken an introductory-level course: Maslow’s Hierarchy of Needs and a variety of intelligences.
I’ve written at length about Maslow’s Hierarchy of Needs here at Consumerism Commentary.
The latter looks beyond classical measures of intelligence like IQ, and beyond the two types that he feels receive the most attention in traditional education, verbal-lingustic and logical-mathematical. Skilled dancers and athletes have strong body-kinesthetic intelligence; artists have strong visual-spatial intelligence; musicians have musical intelligence; strong communicators and socializers rate highly for interpersonal intelligence; and self-motivators have strong intrapersonal intelligence. Kiyosaki adds a spiritual intelligence to this list.
Generalists and specialists. Kiyosaki points out that specialists are not suited to being entrepreneurs. They may be fantastic at one particular skill, but operating a company requires a lot of knowledge of many different aspects of a business or industry.
I lean on the side of agreeing with Kiyosaki here. Career advice tends to sit on the opposite side, often explaining that being as good as possible in one specific area is enough to get a great job and build a good career. The versatility that comes with being a generalist has allowed people who are more adaptable to survive better through the recession, and these generalists have the capacity to to succeed in any situation.
Overall, em>Second Chance: For Your Money, Your Life, and Our World points out the value in owning real-estate property and resources, but like all books, doesn’t offer too many hard details and doesn’t address risk. To go deep, the author assumes that the reader will attend seminars, and the prediction of a 2016 crash creates some urgency for the reader.
Honestly, when I closed the book after reading it cover-to-cover on a flight from the West Coast to the East Coast, I did feel motivated. I’m in a position now where working doesn’t add much to my net worth, and I need to start focusing more on cash flow. I am aware of this and I’m actively looking into ways to make that work, from buying web-based businesses that all ready produce an income (Kiyosaki does promote this idea in the book) to multi-family or corporate real estate.
The work I do today is mainly for cash flow, but it’s been more of a trickle than a gush. I have no interest in earning Ferraris or living some kind of lifestyle Kiyosaki believes motivates his readers, and I’m technically free to do whatever I like with my life from a wealth perspective. I’d much rather live off cash flow than assets, and the book has encouraged me to think about this more.
It’s easy to determine the value of your mortgage to include that in your net worth calculation. Just look at the latest statement from the lender. The statement will highlight your remaining balance, and it’s a number you can’t escape if you do in fact, as you should, look at your statement every month.
The house can be trickier to value. But if you include your mortgage in your net worth calculation, you should also include some value for your house. And it should be a value that makes sense. There are at least three ways to determine your home’s value for the purposes of your net worth calculation.
1. The value of your home is the price you paid.
When you purchased your house, you and the seller agreed upon a value. You then paid the seller that much money, whether you borrowed the money or not, and paid additional fees to complete the purchase. It’s not wrong to consider the purchase price the value of your house for your net worth calculation purposes. No one could say that your figure would be wrong if you use this approach. After all, this was the last market-confirmed value, and there won’t be another market-confirmed value until you sell the house.
This is a problem if you’ve lived in this house for a substantial amount of time. Your community may be more desirable than it was when you moved in, or it may be less desirable. Your neighbors in similar houses might have sold their homes for more money in the intervening years, and the sales price of “comparables” may effect the potential sales price of your own home. You may have made improvements to your home or you may have let it fall apart. All of these factors can change the value of your home, and you can’t be sure until you put it on the market and receive at least one offer.
The big benefit of using your house’s purchase price as the value of your house in all future net worth reports is that it ensures your net worth progress reflects mostly the financial decisions you make on a day-to-day basis. That would allow your net worth progress to present a better picture of your behavior with money, but it wouldn’t really represent your true net worth at any one time.
If however, you own your house for a sufficiently long time, there’s a great chance the value of your home will be so far off from the purchase price that your net worth with a number in old dollars is relatively meaningless. An interesting remedy would be to use your purchase price initially, and then adjust your home’s value on your balance sheet once a year based on the rate of inflation. This will allow you to continue using the house’s purchase price, but it was always be in “today’s dollars,” just like your mortgage and the rest of your balance sheet.
2. The value of your home is defined by appraisal or competitive market analysis.
In order to pay property tax, your local government depends on appraisals. Appraisals provide a way for the government to look at your land, your home, and any changes to either since the purchase of your home to determine the amount of your tax bill. Appraisals also come into play when you’re going through the process of selling your home. When you pay tax, you want the appraisal to be low, while when you’re selling, you want the appraisal to be high. And if an appraisal isn’t inline with the owner’s expectations, the owner can challenge it.
Using the latest appraisal in your net worth statement offers a more timely valuation, but it may not be a valuation you agree with. It may not be a valuation that has any relevance to the amount of money a buyer would be willing to pay, either. It is the result of someone’s opinion — a professional’s opinion — but a real estate agent familiar with your home and your neighborhood may be better professional to offer such a valuation. And if you ask a professional who doesn’t have any reason to exaggerate, you can probably get a relatively accurate estimate.
A real estate agent might be willing to do a competitive market analysis for your property if you appear to be intending to use that agent to represent you in a sale. And certainly, an agent who is willing to do this work for you will feel he or she is in a good position after doing a significant amount of work for you to choose that agent as your broker.
A competitive market analysis may be more accurate than an appraisal, but neither of these would you do every month to keep your net worth calculation “accurate,” or to follow the potential of a sale price that might change on a month-to-month basis.
3. The value of your home is provided by Zillow.
Anyone who has shopped for a house in the last few years is likely familiar with Zillow. I’ve only just begun to look at houses — and I’ve paused those efforts during my latest round of travel — and I’ve been using Zillow to plan most of the visits. Zillow’s estimate — or Zestimate — for one property I was interested in was a good $100,000 or more higher than the seller’s asking price.
So how does Zillow come up with their estimates for each property? Zillow uses public data about recent sales and uses a calculation — a proprietary formula — that takes factors about the home and its neighborhood into account. A few real estate agents I’ve talked to don’t like Zillow’s estimates. It seems to make their job more difficult, and they believe it could lead buyers or sellers to make bad decisions. I think it’s important to remember this value is just an estimate, but it is based on data, and that makes it appealing to people wishing to track their net worth (as well as to people house shopping).
A publicly-recorded sale of one house in a neighborhood can send Zestimates in one direction or another without much warning, even if that house bears little resemblance to one’s own. And that’s one of the possible reasons house values are fluctuating month to month on the net worth report submissions from Naked With Cash. Zillow offers verifiable data to support a valuation on a balance sheet, and it gives someone the comfort level of not having to guess the value of their property on a day-to-day or month-to-month basis.
The question is whether Zestimates are correlated to actual sales prices. And there have been a few analyses completed outside of Zillow to determine if there is a trend of Zestimates to be higher or lower than realized prices, but every area seems to be different.
What is your method for including a value for your house on your balance sheet? I have not owned a house in the past, and I don’t own one now, so I’ve had no reason to decide on a method for myself. I’m curious how other people think about the value of their house while they own in.
Net worth is a calculation that immediately defines an individual’s or household’s financial position. It’s only one piece of a greater financial puzzle, but it’s an important piece. The concept of wealth relies mostly on net worth, which contrasts with the concept of poverty, which is generally related to a different financial equation, income.
Wealth however, is relative, while net worth is absolute. Place someone with a net worth of $50,000 in the middle of New York City, and she’s likely to have problems living the same lifestyle as those around her. Place the same individual with the same net worth in rural Kentucky, and the wealth will go further. Visit a developing nation elsewhere on the globe and $50,000 will feel like a million bucks.
In the Naked With Cash series, readers are sharing their net worth every month. And before that, I shared my financial reports publicly since 2003. Readers who stayed with me since the beginning — and there were many — followed my journey from a net worth of $21,000 in July 2003 (a few years after I began trying to improve my financial situation) to a “non-business” net worth of $373,000 in December 2011. (If I had included my business net worth, which would have consisted of income earned from my business but not distributed to me personally and the proceeds from the sale of that business, the figure would have been significantly higher.)
As a net worth calculation is valid only for one specific moment of time, seeing net worth change over time provides some context to a net worth calculation and offers more insight into one’s financial condition.
How do you calculate net worth?
The equation is Wn = A – L. Wn is your net worth, the value you want to calculate. A is the value of all of your assets. L is the value of all your liabilities. Being able to calculate your net worth depends on understanding what your assets and liabilities are.
Assets include everything you own. That means everything from bank accounts in your name to the value of your furniture and linens.
Liabilities include everything you owe. Your credit card debt is a liability, but so are the taxes you will owe on your investments when you sell them.
Add up the value of all your assets, add up the value of all your liabilities, subtract your liabilities from your assets, and the result is your net worth. It’s a fairly simple calculation, but people often get in trouble when trying to determine the value of their assets and liabilities. It’s not always straightforward. In fact, most of the time, people don’t include all their assets and liabilities. When you want to track your financial progress from month to month, sometimes it makes sense to exclude certain factors, and settle for a “modified net worth” equation.
When I reported my net worth each month, and when the Naked With Cash participants do the same, the number on the bottom line is a “modified net worth,” not a true net worth, because there is room for some customization of the equation. We don’t need to show every asset and every liability to get a continuing picture of financial progress.
How does a house fit into net worth?
The house one lives in is a curious asset. It’s so curious that some people refuse to believe it is in fact an asset. This seems to have started with a popular book promoter and seminar salesperson, Robert Kiyosaki, who in his influential book declared that houses are liabilities. It’s blasphemy! Regardless of whether you have a mortgage, a house is a physical object you own. Liabilities are not physical objects, at least when it comes to liabilities on a balance sheet (the net worth equation).
The word “liability” can have a broader meaning: anything that has the potential of causing you trouble. In that sense, children are liabilities. Responsibilities are liabilities. Performing your own electrical maintenance is a liability. Your neighbor’s dog is a liability. Therefore, your house is a liability. But don’t include it as a liability on your balance sheet, because your house is an asset when it comes to your finances.
There is absolutely no argument otherwise. I’m always happy to entertain dissenting views on Consumerism Commentary, and I’ve been proven wrong on issues before, but your house is an asset.
So now that we know your house is an asset, with absolutely no room for disagreement, why is a minority of financial experts so adamant that houses are liabilities? If they are, they’re not talking about the net worth equation. They simply want to point out that owning a house is a money-draining endeavor. There are two categories of assets that can appear on your net worth statement: income-producing assets, and expense-producing assets. In Kiyosaki’s infinite wisdom, he has completely confused his legion of fans by calling the first category “assets” and the second category “liabilities.”
It’s like a famous chef deciding to call unhealthy meats “meats” and unhealthy meats “vegetables,” and then inspiring a rather loud community of followers, after heavy promotion on The Food Network, to believe that healthy meats are actually vegetables.
Your mortgage, if you have one, is a liability. The remaining balance of your mortgage loan is included on the liability side of a balance sheet. It, along with all the other amounts of money you owe someone else, is subtracted from the total value of your assets to determine your net worth.
If you take the value of your house (more on determining this value) and subtract the balance of you mortgage, you have your house equity. That’s the same calculation for any secured loan, or a loan that is “attached” to an asset. But your equity does not need to be included separately in your net worth, because you’re already accounting for the value of your house on the asset side and the balance of your mortgage on the liability side.
The idea is that by paying your mortgage bill each month, your equity increases. Some mortgage loans are structured in such a way that your equity would only increase if the underlying value of the house increases. That’s the case with interest-only mortgages. For a long period of time, borrowers who have interest-only mortgages never get to the point where they’re decreasing the principal balance of the loan.
Why not just leave your house and mortgage off your balance sheet?
If you rent the space where you live, you generally don’t include your future rent payments as a liability, even though they are, in one sense. Furthermore, the increasing or decreasing value of your house has little relationship to your financial activities on a day-to-day basis. Your net worth could be increasing every year due to your living in a developing neighborhood, but this could be masking financial problems with credit and debt, or other decisions with money that will eventually get you into trouble.
What good is your net worth bottom line if it reflects positive increases during a period where your checking account is dealing with overdrafts and your credit card balances are increasing?
This is why it’s important to look at more than just the bottom line of a net worth statement. When you see an increase in net worth from month to month, look at the details. Did he receive a windfall inheritance? Is he changing his house’s value every month based on an estimate? Did she pay off her debt but completely deplete her emergency fund? Context and details are important in a net worth calculation. Otherwise, it’s just a number that doesn’t explain much about one’s financial situation.
But how do you come up with the right value for your house? I’ll look at some methods for determining your house’s value for the purpose of net worth in a future article.
It’s the height of home repair season, a time when established contractors are often in demand and unavailable. That’s a big opportunity for the fly-by-night operators to step in. Hiring a contractor to do work on your home, whether it’s a relatively small job or a major renovation, is a big deal. For most consumers, ... Continue reading this article…
Once again, I’m finding myself nearing the end of my one-year lease with the need to make a decision about my living situation. I moved to my current apartment in the summer of 2007, at a time when I had been more comfortable living off some of the income from my business. Until that point, ... Continue reading this article…
American culture has long promoted the idea that home ownership is key to the fulfilling middle-class lifestyle. You can be sure the National Association of Realtors will continue to do its darnedest to keep this interpretation of the American Dream alive; whether you’re buying or selling, it’s always a good time for Realtors to earn ... Continue reading this article…
I’ve taken a cursory look at the possibility of investing in real estate near where I live, with the intent of buying a property for rental. The numbers don’t work well in my favor. I’ve confirmed this with friends experienced with renting their properties in the area; most would not do it again if given ... Continue reading this article…
I never liked the term “hustle” when used to discuss making money on the side. The word has the slight connotation of fraud or taking advantage of someone, and moving quickly to do so. Now, the word “hustle” is going to be linked to something more specific and decidedly negative. This was the name of ... Continue reading this article…
The prevalence of junk mail and spam has certainly made weeding out noise more difficult over the last decade. With email, software does a great job of hiding the junk and making the legitimate messages obvious, but there are occasional mistakes. Spam might show up in my inbox a few times each week, while I ... Continue reading this article…
Mortgage interest rates are still low, a great relief to first-time home buyers, real estate investors, and households considering refinancing their higher-rate loans initiated over the past few years. Banks aren’t too eager to hand those low-rate mortgages out to everyone who wants them, however. If you read financial media, you’ve probably heard that this ... Continue reading this article…
While there are great advantages to buying a house with cash, sometimes the benefits of using other people’s money outweigh those advantages. While debt is often rightly characterized as bad for one’s personal finances, there are situations in which it can be less bad. If you can qualify for a mortgage that starts out at ... Continue reading this article…
If you have the option, owning assets that produce income is a better financial strategy than owning assets that generate expenses. If you own a house or apartment for your own residence, for example, you need to pay for maintenance, repairs, taxes, mortgage interest, landscaping, utilities, or a homeowner association fee that covers some of ... Continue reading this article…
On CNBC a few weeks ago, Warren Buffett told the television-viewing audience, among other things, that he would purchase a couple hundred thousand single-family homes right now, if it were practical to do so. That seems like a ringing endorsement of buying residential real estate for its value as an investment. If the buyer also ... Continue reading this article…
If you’ve ever browsed through the television guide, you might have seen that there are a good number of television shows dedicated to the real estate industry. House Hunters International, Million Dollar Listing, Extreme Makeover: Home Edition, and Real Estate Intervention are just a few of the cable or network television shows designed to allow ... Continue reading this article…
I’ll be thirty-six years old this month, officially closer to forty than thirty. I’ve never owned real estate. Once in a while, someone judges this as a failure on my part, or a reluctance to “grow up” or enter a more sophisticated stage of development, as if maturity was somehow related to the ownership of ... Continue reading this article…
When I write about the unbanked, the vast majority of this category of consumer avoids the financial industry due to lack of trust in the industry or a belief that living paycheck to paycheck doesn’t necessitate the fees and hassles of including a third party in financial transactions. Cash, in some respects, keeps you off ... Continue reading this article…
Although the home mortgage interest deduction is one of the most oft-cited benefits of owning a home, most taxpayers don’t take advantage of it because it requires itemizing taxes. If itemized deductions including mortgage interest paid throughout the year exceed the standard deduction, a taxpayer can take advantage of the benefit. The benefit isn’t as ... Continue reading this article…
Thanks to some changes to the federal Home Affordable Refinance Program (HARP), more homeowners can qualify for government-endorsed refinancing. Previously, the program only offered refinancing options for households where the mortgage value was up to 97 percent through 125 percent of the home’s market value. This did help families who have become underwater, having more left to ... Continue reading this article…
Imagine you’re shopping for a new high-definition television. You’re looking around the store for the television with the best picture from a brand you trust. You pick the one you like, not the least expensive model but not the most expensive, either. You take it home, plug it in, and all the television can display ... Continue reading this article…
These rates are subject to change at any time by the respective banks. Check the banks' websites to confirm the rates and terms before applying. *EverBank MMA 1.01% 1st-year APY up to $50K for first time account holders.
Content on Consumerism Commentary is for entertainment purposes only. Rates and offers from advertisers shown on this website may change without notice; please visit referenced sites for current information. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise.
Advertiser Disclosure: Many of the savings offers
appearing on this site are from advertisers from which this website receives compensation for being listed here.
This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all deposit accounts available.Editorial Disclosure: This content is not provided or commissioned by the bank advertiser.
Opinions expressed here are author’s alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.UGC Disclosure: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser.
It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.