Personal Finance

What Will Interest Rates Do Now?

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what will interest rates do?

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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Fidelity Credit Card Review

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fidelity credit card

The Fidelity Investment Rewards Visa Signature Credit Card is an intriguing offer with a generous 1.5% cash back offer and the standard 1 point per $1 rewards program. Details inside.

SoFi Review – Legit, Scam, Worth It?

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sofi review

What Is SoFi? In this SoFi review we will take a look at what SoFi offers and the pros and cons of SoFi. We’ll see is SoFi legit, or is is SoFia scam? SoFi, like most other niche financial services companies, is expanding. It turns out that once you get a foothold, and a few developers working full-time for you, cranking out “disruptive” finance services is easy. SoFi has a wide array of financial products including loans, banking, investing, and more. Most of SoFi money is legit, but whether it’s better than others is the key. SoFi Loans First, SoFi was a lender. If you scroll to the bottom of their webpage, you’ll see in the fine print that officially, SoFi (the lending part) is SoFi Lending Corp. NMLS #1121636. You see, lending corporations are real things that exist and are also heavily regulated. Believe it or not, there is no need, nor requirement to be a bank to give out loans. It just means you have to get the money you are going to lend out to people from somewhere besides customer bank deposits. In this case, SoFi investors supply the money the company lends out. At this stage, …

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What Is the Normal Mortgage Interest Rate

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What Is the Normal Mortgage Interest Rate 1

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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Credit Karma Accuracy

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credit karma accuracy

Credit Karma has made waves in the financial industry by offering both free credit scores and free credit monitoring to its customers. At first, a lot of people were worried that Credit Karma is a scam. But, after an in-depth Credit Karma review, it seems that the company is legit. However, it is important to understand just what it is that they offer. Credit Karma vs FICO To understand whether Credit Karma scores are accurate, you first have to understand what credit scores are and where they come from. First, a credit score is nothing more than a number calculated from information in a person’s credit report. The idea behind a credit score is to determine algorithmically how good of a credit risk someone is without actually having to read through the details of a lengthy credit report. The resulting number is only as good as the math that created it. The more statistically accurate the number is, the better the score is. However, in the real world, there is really only one credit score that matters. Fair Issaac was the first company to popularize the concept of a credit score. Over the years, it has demonstrated that its credit …

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Subprime Auto Loans and Home Loans

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Subprime Auto Loans and Home Loans 2

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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Is Grifin a Good Way to Start Investing

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is grifin good at investing

Important Grifin Update It was always probably a little too good to be true. An app that invests a dollar every time you make a purchase with no fees or user face costs. Everything costs money, especially running an app that accesses credit cards, makes transfers from banks, and then buys and tracks investments in partial shares of stocks. I have no idea what the plan was in the beginning, but I can only imagine it was something like, “We’ll figure out how to monetize it when we’re huge,” or maybe, “We’ll get big enough someone will buy us for a big exit before we run out of venture capital money.” Neither of those worked out, so instead, Grifin will start charging $5 per month. They did their best to sugarcoat it. There are some new features, but none that can justify $60 a year in fees for accounts that have just a few thousand in them. After all, even stock where you shop doesn’t necessarily add up that quickly, as I pointed out here and in my comprehensive Grifin review. From my first investment back in fall of 2021 to now, I’ve built up a nice littel $1,100 or …

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Merrick Bank Credit Card Reviews

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merrick bank credit cards secure credit card

Recently, someone asked me about a credit card offer they received from Merrick Bank. I wasn’t familiar with Merrick Bank, so I agreed to look into it. The Merrick Bank credit card is pretty interesting for the right type of person. The Merrick Bank secure credit card lets people with no credit, or terrible credit, rebuild their credit or build a high credit score for the first time. They also seem to offer people who recently emerged from bankruptcy low-limit unsecure credit cards as well. So, if you are looking for something that works as a credit card for 500 score, this might be your huckleberry. Let’s dive in a bit deeper than most Merrick bank reviews. Merrick Bank Credit Card Reviews The first thing about Merrick Bank is where it is located. If you’ve never heard of Merrick Bank, don’t worry, you aren’t alone. Most people don’t realize that “bank” can mean a lot of different things. In this case, bank means an issuer of loans and credit cards, not a bank that takes regular deposits and has branches. It is FDIC insured and is one of the top issuers of Visa cards, but you won’t see a Merrick …

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Should I Open a CD Now Before the Next Fed Meeting?

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open a cd now

The Federal Reserve has been highly predictable for the last few years thanks to Covid and a brittle economy, but high inflation changed the game. Now knowing if you should open a CD before the next Fed meeting is a little trickier. However, this Fed hasn’t changed its stripes and predicting the Fed’s moves in the short term is still easy enough to make decisions with your money. Should I Open a CD If the Fed Is Raising Interest Rates? If you bought a 5-year CD paying 1.45% a year or two ago, that probably feels like a bad move buying a CD. Don’t feel too bad you aren’t the only ones. Professional asset managers bankrupted a favorite Silicon Valley stock by buying long-term treasuries when they were paying pennies. Like you, they took what they could get. Ideally, you want to wait until the Fed raises interest rates before buying a CD. Higher rate CDs mean more interest for you. However, you have to remember about opportunity cost. Opportunity cost is the value of what you could have been doing with your money while you were doing something else, like waiting for the Fed to raise interest rates. That …

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Remote Work Taxes

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remote work taxes

Remote work is changing every aspect of the modern professional’s life. No more long commutes. No more monthly parking expenses. Maybe even no more car. How remote work taxes occur is the next frontier. Taxes for Remote Work The evolution of the workplace has seen a significant shift towards remote work, a trend accentuated by recent global events like the COVID-19 pandemic. With an increasing number of individuals and businesses embracing this new normal, it’s vital to understand the accompanying tax implications. This guide outlines key points to consider and strategies to optimally manage taxes in the world of remote work. Federal Income Taxes on Remote Work If you live or work in America, the U.S. government requires your income to be taxable. If you are a citizen of another country and you don’t spend too much time in the U.S. there can be some ways around it. For average, middle-class workers looking at their tax options, there is no difference between a job in Utah, and an office in Minnesota than there is from a job in the same building as the company headquarters. You’ll get your W2 and you will pay income tax. What about state taxes and …

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