Advanced Mortgage Tricks

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advanced mortgage tricks

Advanced Refinance Tricks For the Financially Well Off Got plenty of money socked away for the kids’ college? Already have a retirement plan and funding it well? When someone asks about an emergency fund do you think, sure, which account would I use? Then, here is a trick for you. Mortgage interest rates are at historic lows. As I write this, it wouldn’t be hard at all to get a 3% mortgage if you have good credit and put 20%+ down. What if, you took $100,000 out of your mortgage with a refinance that lowered your interest rate enough to cover all closing costs, and then, put that $100,000 into a solid dividend paying stock? Just for example, right now, Verizon pays something like 4.85% per year at its current $52.50 stock price. If you took the $100,000 you got from your cash out refi, and invested in in Verizon stock as a long-term investment, Verzion would spend the next 10 or 20 years paying you the equivalent of 4.85% on your $100,000 stock investment. Which means you are earning more on your investment than you are paying on the extra mortgage principal. Now, you do have to pay 15% …

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Best Way To Take Equity Out of Your House

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home equity refinance

One of the most frustrating things during my years as a financial planner was the number of people who insisted on paying their mortgage off early or adding extra principal to their mortgage payments and then, years later (or not) wanting to know the best way to take equity out of your house. Grrrr!!! If you’re not going to listen to me about the best place to invest extra money, or if you ended up with a ton of equity in your home thanks to rising home prices, or just living there for a decade or more, then listen to me now about the best way to take money out of your home equity. Take Money Out of Your Home’s Equity by Refinancing Usually, taking money out of your home equity by refinancing is dumb. However, with interest rates at historical lows, and lenders competing with each other, it is possible to take equity out of your home, lower your interest rate, and pay lower expenses, all without sticking you with a big loan that you have to pay back. Here is how it works. Let’s say you owe $300,000 on a house worth $500,000. You have $200,000 in equity. …

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Is There Really a Santa Claus Rally?

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Santa Claus Rally Picture

There are so many investing maxims that it’s hard to know why anyone needs to do any research into stocks and bonds at all. I mean, how hard can it be to invest? Why do people put so much effort into it? At any time of year, there is a tried-and-true maxim to tell you where to invest your money right now. Stock Market Sayings *To the tune of Here Comes Santa Clause* Here comes platitudes, here comes platitudes… *End song* The most famous Wall Street market saying is: Sell in May, then go away. It rhymes! It must be true. The idea is that historically the market sort-of, kind-of, under-performs during the summer months. Of course, there are plenty of years where this isn’t true, especially now that Manhattan bankers don’t head for the country and stay there all summer long. There’s also a Super Bowl Stock Market Indicator which says that if the team from the AFC Division wins the Superbowl, then the market will have a down year. Conversely, if the NFC Division team wins, then the market will have an up year. My personal favorite is the Hemline Theory, or the Skirt Length Theory which suggests …

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Galera Therapeutics Decides Its Drug DOES Work

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grtx stock drop trial

So, I’ve been examining (procrastinating by looking at other stuff) the various tools that come with all of these no-cost investing apps like Webull, Stash, Robinhood, and the like. I’ve also been playing around with the idea of delivering some micro-posts here on FinanceGourmet. Usually, I try and fully cover financial advice, or financial independence strategies and topics, in full detail. However, maybe some quick hits would be valuable along the way as well. We’ll see how it goes. Galera Therapeutics Stock Rises 100% On Error Typically, when a company reports a big-time error, its stock goes down. Not Galera Therapeutics. Today, the company issued a press release before the market opened stating that it’s Phase 3 drug trial DID achieve statistical significance after it reported earlier that it DID NOT achieve statistical significance. The Company previously announced the Phase 3 ROMAN trial of avasopasem in SOM did not achieve statistical significance on the primary endpoint. Upon further analysis, an error by the contract research organization (CRO) was identified in the statistical program. Correction of this error resulted in improved p-values for the primary and secondary endpoints. Galera Therapeutics – Galera Announces Primary Endpoint Met Statistical Significance in Corrected Topline Efficacy Data …

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Where Is My PERA 401k History?

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the history of pera 401k accounts is missing

Did you login to PERA 401k account and find all of your historical data missing? Do you wonder where your PERA 401k history is on the website? I had the same questions when I tried to log in and plan out buying some PERA retirement years with the 401k. Turns out, there is an easy answer to why all of your PERA 401k data is missing. PERA Changed Custodians If you have a balance in the PERA 401k, then you got the same mailers, emails, and notifications I did. You probably took a quick look at them and figured it wouldn’t matter and decided to ignore them, like I did. That is where the answer lies, however. The PERA Board of Trustees decided they could do better for PERA members. For an organization as large as PERA, doing better usually means lower expenses. 401k Blackout Period Once PERA figured out that they wanted to change 401k custodians, they needed to figure out how. For better or worse, the process of changing 401k administrators is highly regulated with a whole host of rules that must be followed. One of the rules that migrating 401k plans must follow is the imposition of …

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Charitable Contributions Tax Deduction

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charitable contributions

Republicans passed the Tax Cuts and Jobs Act in 2017 reshaping the way many Americans pay taxes. Apart from the uninspired, and obvious marketing, based name, the law made some deductions disappear. It tried to fill in those deductions by giving everyone a higher standard deduction. Theoretically, people pay the same or lower taxes and don’t have to itemize to do it, but politics gets in the way of everything in Washington. Charitable Cash Contributions One of the things that was originally supposed to go away in the bid to make it so fewer people had to itemize was getting rid of the charitable contributions deduction when you took the standard deduction. But there were howls of terrible things to come, whispers of charities disappearing from the country all together, cats and dogs living together, mass hysteria! And so, Congress caved and let people who take the standard deduction still take a deduction for some charitable giving. Line 10b under Adjustments to Income, taxpayers may deduct up to $300 for cash donations. That $300 is the same for filing single or married filing jointly. If you do the married filing separately thing, you have to split it, so each of …

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File Taxes for Free with IRS Free File

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file taxes free

If you are thinking, how can I file my taxes for free, you might also be thinking that the IRS should offer a way to file taxes for free online. After all, how hard can it be to write a simple, free income tax preparation software, when you are the ones that actually write the tax laws. You would be right, except for this is America where big bribes campaign contributions mean that politicians care more about companies that make tax software than they do about taxpayers. Still, there is a way to file your taxes for free online. IRS Free File IRS Free File is a “public/private partnership” where companies that make fully priced commercial tax software also make a free tax filing version in exchange for being on the IRS Free File website. This is the best the citizens of America could get against intense lobbying by Intuit, the maker of TurboTax. File Taxes for Free Limitations There are limits on who can use Free File. The IRS currently lists $72,000 as the maximum income. Also, for people who have more complicated taxes, the commercial paid options might be a better way to go. As a freelance writer, …

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Unemployment Rises Less Than Expected

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unemployment numbers

Ah, the world of finance, where the rules are made up, and the points don’t matter. OK, I stole that from Phineas and Ferb, but sometimes it fits better than it does even for a fake game show. Today, unemployment numbers were released in which the number of Americans filing for unemployment increased. That means more Americans are jobless than before, despite the so-called worker shortage and the Great Resignation. Don’t forget, you don’t get to file for unemployment when you quit, so these are still Americans who were fired, downsized, let go, or their employer closed. More unemployed Americans is bad, in general, but… Economists were predicting (modeling, similar to what meteorologists do) that there would be even more Americans filing for unemployment, so the fact that more Americans are unemployed, but not as bad as we thought, is good news. Kind of. Check out my review of the new fintech investing apps. The reality is that numerous traders and investors made their trades expecting higher unemployment numbers would push down the price of securities and investments. Since they were wrong, the price of those investments are rebounding. This is “good news” in the world of finance, and a …

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Colorado Secure Savings Program

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colorado secure savings program

Colorado is set to join a handful of other states in creating an automatic retirement savings program for Colorado workers. The idea is that while many Coloradoans have access to a retirement plan like a 401k or 457 plan through their employer, a lot of Coloradoans don’t. Unfortunately, those who do not have an employer sponsored retirement plan often do not start saving for retirement until much later than those who do. And, when it comes to retirement savings, time is lots of money. What Is the Colorado Secure Savings Program? The final Colorado Secure Savings Program won’t launch until at least 2023, but the rough idea is that each Coloradoan who works for an employer without a retirement plan will be automatically enrolled in the CSSP. The CSSP is actually nothing more than an IRA, or Roth IRA. What the program does differently is automatically create the retirement plan account and set the employee’s contribution to a specific minimum which will come from payroll deductions like a 401k plan. People who don’t want to participate can opt out. This plan could be a big retirement driver for Colorado workers over the long term. When I was a financial planner, …

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Build Back Better Passes House

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Build Back Better Passes House 1

For the last couple of administrations at least, the Democrats are better at naming their bills. The Build Back Better package not only has a snazzy name that makes it sound like a good law, it also abbreviates down as BBB, or even B3, or whatever. Anyway, the Build Back Better package is good news for American taxpayers and has a lower deficit impact that the Republican’s signature tax cut bill from a few years ago. Plus, if you understand economics well enough, you know that the rising inflation actually makes all of this cheaper. But, this is a finance blog… The news this morning is to realize that this package once again started in the house, and it once again has to go to the Senate where that one corrupt Senator from Arizona has to hem and haw and collect donations for a while before voting on the package, and they have to do the Manchin dance or whatever to. The important thing to remember is that this is not a law yet, and whatever is in it might not be in it when it does eventually become a law, so don’t start planning your taxes around it. If …

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