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Choose Your Rate By Xcel Energy

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Your rate, your choice, the postcard says. Xcel Energy makes it sound like you’re choosing the chicken or the beef. It also doesn’t end up telling you how much the rate you choose is going to cost you. I guess it’s more complicated than a postcard can convey, even with a little bar graph showing On-Peak energy from 5:00pm to 9:00pm costing three dollar signs instead of the Off-Peak time when it costs one dollar sign. Xcel Energy And The Rate Choice Xcel Energy is a for-profit corporation, like most big American companies. You can buy shares of Xcel stock if you choose. Xcel’s ticker symbol is XEL. It trades on the NASDAQ even though they got a three letter stock symbol. As I type this, the stock closed at $80.40 a share. I don’t know if that’s higher or lower. I don’t have any Xcel stock. Unlike most American companies, Xcel Energy trades it’s near monopoly in the areas it serves for oversight by regulators who keep Xcel from doing what most American companies seem to do these days. Run, a rational business charging a fair, but profitable price for a good service supplied by competent, skilled workers that …

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JEPQ Annual Report Review

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The JPMorgan Nasdaq Equity Premium Income ETF is popular around the internet’s financial communities. Places like Twitter (FinTwit) and Reddit ooze with opinions on JEPQ and whether those who invest are suckers or geniuses. As always, it depends. What Is JEPQ? JEPQ is an exchange traded fund, or ETF managed by JPMorgan. The fund, more or less, seeks to mimic the ever-growing popularity of selling covered calls to generate income while still holding your stocks to become rich and famous from their capital appreciation. To do this, it starts with a fund comprised of stocks to roughly approximate the Nasdaq 100, and then it sells covered-calls (and equity-linked notes, which are institutional sized covered calls) on those stocks to generate income. If everything goes according to plan, the fund will generate income and hold those stocks as well. The best of both worlds. When things don’t go according to plan, stocks rise rapidly taking out said covered-calls and making them money losing exchanges of pennies for multiple dollars of share price increases. Fortunately, those things are hidden silently within the fund so you don’t have to worry your pretty little head about that. In the end, you get (JPEQ returned) …

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Should I Worry About the Equifax Hack?

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Boy, time flies when you’re protecting your identity. This article was originally written September, 2017. It was just a taste of things to come. In August, 2024 criminal hackers went bigger and literally hacked the Social Security Administration and got away with as much as all of our social security numbers, date of birth, address, and who knows what else. Even a baby identity thief could profit from this. The worry is that new state-sponsored criminal organizations are already working on profit and intelligence gathering. If you are wondering whether to be worried about the Equifax hack from 2017, the answer is yes. You should be worried. However, you do not need to panic. How ever bad the Equifax hack of 2017 was, there were plenty of doozeys on its heels. So many, in fact, that any one of them likely caused more damage. Still, those who do not study history are doomed to repeat it. Get Some Credit Monitoring By now, you should probably have some rudimentary credit monitoring whether it comes through a free credit score service like Credit Karma, or from your bank, or one of your credit cards. You’ll want to read all of those emails …

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Dividend Investing and REITs

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There are more than a few people out there on social media, or even respected money news and financial analyst websites and publication who hate dividend investing. Dividend investing is for people who are irrationally conservative and growth investing always wins in the end, is what they say. Of course, part of the reason they say that dividend investing is bad is because they don’t fully understand it, or they do and are choosing to focus only on trendy, but ultimately underperforming types of dividend investing. REITs and Dumb Dividend Investing On the internet, dividend investing is, as are so many other things, dragged to the extremes. The idea of only investing in the most boring of stocks with dividends like utilities and maybe banks is, not surprisingly, a recipe for underperformance, even if it is less risky. Likewise, the starry-eyed adulation of fund, ETF, or stock paying an astronomical dividend, attract droves of followers who assume that their sub-reddit has found the holy grail that all other investors are too foolish to see. Dividend Investments Hype Any investment that has a good run will develop a following who believes that it is a never ending good run and getting …

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What Will Interest Rates Do Now?

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It’s January 2024, and nobody expects the Fed to cut interest rates at its January meeting. Interest rates will stay the same until the March meeting, when the only option is to stand pat, or to cut rates. An interest rate hike is off the table under all foreseeable scenarios. What Should I Do About Interest Rates Now? Under these conditions, it is important to understand two concepts. First, some interest rates move only when the Fed cuts or raises interest rates. Other interest rates move with the market. The first kind of interest rates are generally most types of revolving debt such as credit cards, home equity lines of credit, and personal loans. These kinds of credit are almost always tied to the Prime rate. The Prime rate is set banks, and typically moves in lock step with the Federal Reserve Fed Funds Rate. The second category of interest rates moves with the market. When people talk about interest rates and the market, they mean the bond market where all manner of debt trades hands just like stocks in the stock market. Just like stocks, these rates move every day, and just like stocks, more than a little bit …

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What Is the Normal Mortgage Interest Rate

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With articles and talking finance people constantly talking about mortgage rates, rising mortgage rates, and highest interest rates in 20 years, you might be wondering what the normal mortgage interest rate actually is. There are actually many different types of mortgages. When people talk about mortgages generally, or generically, they are typically talking about the standard 30-year mortgage with a 20% down payment. As it turns out, mortgage rates aren’t as typical as some people might have you believe. The 30-Year Fixed Rate Mortgage Average Chart As someone who has clocked in nearly a half-century here on Earth, the days of 3% and 4% mortgages were crazy town bonkers. To me those interest rates were comically low, and certainly not the normal interest rates for mortgages, but it isn’t that simple. This chart shows the 30-year fixed rate mortgage average in the United States. As someone who became aware of finance around 1990, you can see where I got the idea that 7% and 8% mortgages were normal. In fact, if you want the average of this graph, it is around 8%. Although, there is no one on this planet who considers the disastrous interest rate of the early 1980s …

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Subprime Auto Loans and Home Loans

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Understanding Auto Loans: Prime vs. Subprime, A Comparison In today’s economic landscape, inflation and resuming student loan payments, are causing financial strain for many Americans, leading to record-high default rates on auto loans. The situation is reminiscent of the financial crisis in 2008, but this time, it’s the auto loan market that’s feeling the heat. With borrowing costs reaching unprecedented levels, it’s crucial to understand the dynamics of prime and subprime auto loans and compare them to home loans of the same names. The Rise in Auto Loan Defaults Recent data from Bloomberg reveals a concerning trend in auto loan defaults. The percentage of subprime auto borrowers who are at least 60 days past due on their loans surged to 6.11% in September, up from 5.93% in January. These numbers paint a grim picture of the financial struggles faced by many Americans. Prime vs. Subprime Auto Loans To comprehend this issue better, let’s compare prime and subprime auto loans, taking into consideration the credit scores of borrowers. Prime Auto Loans Subprime Auto Loans Home Loans vs. Auto Loans To draw a comparison, let’s examine home loans with similar terms: Home Loans The Impact of Federal Reserve Decisions The recent surge …

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Federal Reserve Holds

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The Federal Reserve Board voted not to raise interest rates at their October meeting, finally realizing that the runaway freight train of interest rate hikes might be more detrimental to economy than the inflation that they are supposedly fighting. Did the Fed Stop Too Late The big question on everyone who actually participates in the economy’s mind is did the Fed stop raising interest rates too late. Already the housing market is seizing up as home buyers realize they have been priced out of homes by higher interest rates and sellers find that they no longer can sell their home in a weekend, or maybe within several weeks. Higher food prices are still cutting deep, but so are those credit card bills. Variable rate credit cards and HELOCs have spent the last year delivering higher and higher payments to borrowers. Many borrowers who were perfectly fine servicing their debt suddenly find themselves staring down bankruptcy. And we all know what happens when a huge chunk of America goes and declares bankruptcy. The only high point in all of this is rising wages and low unemployment are keeping more people above water than in the past. In states with rising minimum …

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7 Things Your Bank Probably Won’t Do These Days

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There is a lot of good information about money management, investing, and banking on the internet. Unfortunately, there is a lot of old, incorrect, or outdated information out there as well. Here are 10 things that your bank or credit union may not do anymore, no matter what that article says. References:

Should the Fed Stop Now?

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Below is a quick belt out of information and opinion before I head off with the family on a last-of-summer vacation. Don’t bother letting me know about other links, grammatical errors, or the like. I’ll go back to normal when I get back next week. Should the Fed stop raising interest rates now? Even the staid financial press is starting to ask the question that obsequious interest rate hawks insisted was off the table, is it time to stop raising interest rates? Inflation Is Down In the carefully written narrative of the Federal Reserve fighting inflation, the Fed bank must raise interest rates, longer, and more painfully than the lesser economic hawks can stomach. Only then can inflation be brought under control by the tough love of inflation hawks. But, as they like to say, a funny thing happened on the way to the forum. It seems that if the economy were overstimulated into inflation by various temporary economic measures such as government checks from a larger child tax credit, and student loan borrowers unleashed temporarily from their burdensome payments, then the boost to inflation was temporary as well. The result is that with a tap on the brakes in …

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