August 16, 2017
My Personal House

Do Extra Mortgage Payments Really Help?

When it comes to paying your mortgage everyone knows you can save money on the interest by shelling out a little more and applying it to the principal. That means additional principal payments benefit you later on, right? You may also view one dollar today as the same dollar tomorrow. However, that’s not technically true. It depends on how much and why you spend it. If that seems a little confusing, let me break it down a bit more for you.  That way you’ll know how much you really are or are not saving. Paying Extra on the Mortgage Let’s look at an example of what I’m trying to say. Here are some assumptions we’ll make. Joe Average secured a $300k mortgage for a 30-year term at 5%. He decided to pay an extra $30 each month to save himself in the long run. In doing so, Mr. Average shaves just over a year, 14 months actually, off his mortgage, thereby saving $13,458 in interest. Not bad. What if he doubled that $30 to $60? At that point, his home would be paid off just shy of 28 years. This time he’s saved $25,560 in interest. That’s almost double the […]
August 7, 2017
Choosing a Financial Expert

Wall Street versus Main Street

When it comes to managing your investments, navigating through the sea of the various financial professionals can be overwhelming. There are financial advisors, wealth managers, stockbrokers, etc. Each of these could be fee-only, fee-based or commission only. Then you get into the licenses—Series 7, Series 24, Series 6, Series 66 and Series 63. After all that, you’ll see designations like CHFC, CFP®, CPA, CFA. I think you get the point. It sure seems like financial professionals are a dime a dozen. So when it comes to investing, knowing who to trust your money to can be confusing. Do you go with a broker? What about an advisor? Or would a CFP® be a better choice? With all the choices out there many choose to settle for the big name brokerage-firm because of familiarity. (It could also be the multi-million dollar marketing budgets which lead folks to these large firms.) That might be the right choice for some, but not everyone. Here’s why selecting a small, local independent firm could serve you better. The Reasons Contol of your money If you want to hand your money over and forget about it, then a big firm is often good at managing money […]
July 29, 2017
Debt Reduction

Pay my Mortgage Debt or Invest? Which Should I Do?

The thought of being debt free sounds like a dream come true for most of us. Many folks are wrapped up in credit card debt, car payments, mortgage payments, etc. However, there’s one debt that freeing yourself from could do more harm than good, from a mathematical standpoint. That is your mortgage debt. Honestly, it’s often not a good idea to pay it off or even pay extra on it before age 50. I know individuals in their 30s who received big inheritances, went out and paid cash for a house to avoid a mortgage payment. To them, it was a good idea. I also know individuals that decided they wanted to pay their home off as fast as possible. As a matter of fact, I have some friends that are also clients that ended up in this exact scenario. They bought a house in another state during the downturn of the market. Recently, they sold it and made $100k, to which they planned to pay off the mortgage on their current home making them debt free. I said to him, “You know that sounds good and I understand, but you‘re dealing with about a million dollar decision right now. […]
July 21, 2017
prioritize your savings plans

Prioritize Your Savings Plans

I’m sure you’ve heard the old adage, “money doesn’t grow on trees”. Don’t you wish it did though? However, since it doesn’t how do you decide the best way to spend or save the money you do make? “There’s more than one way to skin a cat,” right? Let’s review the decisions parents face today. Should they save for a child’s college education or knock out their mortgage quicker? Or do both?Making the choice that’s best for you and your family comes down to priorities. Prioritizing Here’s the thing. Both paying down the mortgage and saving for college are noble causes. However, there is one particular priority I’d suggest placing above all else. RETIREMENT! You can fund college a lot of different ways. There’s financial aid, student loans, scholarships, etc. While those can help put your child through school, they won’t get you through retirement. Funding your retirement accounts also won’t count against your college student when it comes to financial aid too. If it’s a Roth IRA, you can even use the money for qualifying educational expenses. Now as for whether your focus should be college or your mortgage. I’m gonna say college and this is why. Most people don’t […]