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Personal Finance Advice and Education! (2 Viewers)

-OZ- said:
Figured I'd post here.

Is anyone else using worthy bonds? 

Fairly risk averse way to hold money and get more than the banks give now. I wouldn't make it a huge part of your assets, but it's a good way to hold money you want to use next year or so and don't want to risk losing it.

Get $10 free (as will I) https://worthybonds.com/?r=CneEc
What the hell are they investing in with your money. 

 
What the hell are they investing in with your money. 
secured, asset-backed small business loans and into other public and private investments, including real estate.

I've used it for 6 months now, withdrew my funds from the first offering with no issue. (Now I'm putting money into their 2nd offering)

You won't get the massive gains we are seeing in some stocks, but if you believe in "asset backed loans", it's worth doing as a hedge to equities.

 
secured, asset-backed small business loans and into other public and private investments, including real estate.

I've used it for 6 months now, withdrew my funds from the first offering with no issue. (Now I'm putting money into their 2nd offering)

You won't get the massive gains we are seeing in some stocks, but if you believe in "asset backed loans", it's worth doing as a hedge to equities.
It’s a new company that hasn’t even gone through an economic downturn before now.  I wouldn’t feel comfortable that I’d get that 5% for long.

 
secured, asset-backed small business loans and into other public and private investments, including real estate.

I've used it for 6 months now, withdrew my funds from the first offering with no issue. (Now I'm putting money into their 2nd offering)

You won't get the massive gains we are seeing in some stocks, but if you believe in "asset backed loans", it's worth doing as a hedge to equities.
So basically a CLO holding unrated loans of small businesses. That feels very risky to be honest. 

 
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secured, asset-backed small business loans and into other public and private investments, including real estate.

I've used it for 6 months now, withdrew my funds from the first offering with no issue. (Now I'm putting money into their 2nd offering)

You won't get the massive gains we are seeing in some stocks, but if you believe in "asset backed loans", it's worth doing as a hedge to equities.
Ya, going to agree with the others and say I'd avoid. 

 
This

i love the term “asset backed”, ie an inventory loan 

As usual, there is no free lunch 
Current ABL (asset based loans) market is like Libor plus 175 to 225 bps on levered credits. If they are getting over 5 percent on these loans they are pretty risky. 
 

There are mutual funds that invest in leverage loans. Also, can do through an ETF like BKLN. If you want to invest in secured loans as an asset class I would suggest going that route. 
 

 
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Article on CLOs.  I might be comfortable holding the highest tranche, but the lower ones look to be risky, to say the least.  What are their CLOs rated?
It is not really a CLO, it is a company that is selling bonds and then taking that cash and investing in a bunch of secured loans.  Looks like the bonds and their investments are not rated from their website but I haven't really done any research on it.   It just sort of feels like a CLO, which is a much more complicated investment with different tranches, etc. as you point out. Given this company and return they are offering I would stay away from the investment but that is me.  

On investing in a CLO itself.  It is very hard to invest in a CLO if you are a retail investor as they are really for institutional investors (Insurance companies, mutual fund, hedge funds, etc..) and most CLOs won't let an individual invest. If you are an accredited investor you might be able to buy something but would wade carefully as these instruments are not really meant for the average Joe and you would probably need to speak to your broker. My guess if using a discount broker it would be tough to buy them.  Think there might be a few publicly traded things that let you invest in equity tranche (risky piece) but I have never seen or looked into that really.

As I said, if you want to invest in leverage loans there are mutual funds and an ETF or two that is probably the best place for someone to invest in.  Of course, these all aren't your run of the mill investments.

 
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It is not really a CLO, it is a company that is selling bonds and then taking that cash and investing in a bunch of secured loans.  Looks like the bonds and their investments are not rated from their website but I haven't really done any research on it.   It just sort of feels like a CLO, which is a much more complicated investment with different tranches, etc. as you point out. Given this company and return they are offering I would stay away from the investment but that is me.  

On investing in a CLO itself.  It is very hard to invest in a CLO if you are a retail investor as they are really for institutional investors (Insurance companies, mutual fund, hedge funds, etc..) and most CLOs won't let an individual invest. If you are an accredited investor you might be able to buy something but would wade carefully as these instruments are not really meant for the average Joe and you would probably need to speak to your broker. My guess if using a discount broker it would be tough to buy them.  Think there might be a few publicly traded things that let you invest in equity tranche (risky piece) but I have never seen or looked into that really.

As I said, if you want to invest in leverage loans there are mutual funds and an ETF or two that is probably the best place for someone to invest in.  Of course, these all aren't your run of the mill investments.
Understood - I was mostly talking from a risk point of view.  And I don't intend to ever try to buy one of these.  Good info, though!

I think there is a CEF or two that invests in these.  

 
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It seems many here use personal capital.

FYI - https://www.businesswire.com/news/home/20200629005203/en/Empower-Retirement-Acquire-Personal-Capital

WIRE)--Empower Retirement (“Empower”), the nation’s second-largest retirement services provider,1 and Personal Capital, a digital-first registered investment adviser and wealth manager with award-winning financial tools, today announced that they have entered into a definitive agreement for Empower to acquire Personal Capital.

In addition, the retirement plan sponsors and advisors we serve will be able to offer their plan participants a more powerful retirement benefit that is highly valuable in a competitive labor market.”

In other words - "we're gonna sell #### hard"

 
anyone know where to find the latest on financial aid for college?  Basically just looking for some cliff's notes.  My kids are still 9 years out...but I'm just genuinely curious as to what's up these days.

 
How do i interpret these finance terms for a car? 

0.9% APR up to 36 months at $28.16 per month per $1,000 financed

The bolded part is throwing me off.  I thought the APR is the % of what's being financed?

 
How do i interpret these finance terms for a car? 

0.9% APR up to 36 months at $28.16 per month per $1,000 financed

The bolded part is throwing me off.  I thought the APR is the % of what's being financed?
The bolded is the payment for $1,000 given the Annual Percentage Rate (APR) of .9%.   So .9% is the interest rate you are paying on the money borrowed.

For example, if the car cost $25,000 and let’s say you put down $5,000 cash and finance the rest.  You are borrowing $20,000 at .9% over 36 months.  The payment will be 20 x $28.16 which is $563.20/month.  

 
anyone know where to find the latest on financial aid for college?  Basically just looking for some cliff's notes.  My kids are still 9 years out...but I'm just genuinely curious as to what's up these days.
Maybe start here https://studentaid.gov/h/apply-for-aid/fafsa.  The link is to apply for federal financial aid which your not ready for however the website had a lot of related info.  There was even a link to estimate your financial aid. 

I haven't been through the process yet either so hopefully someone who has can chime in.  

 
The bolded is the payment for $1,000 given the Annual Percentage Rate (APR) of .9%.   So .9% is the interest rate you are paying on the money borrowed.

For example, if the car cost $25,000 and let’s say you put down $5,000 cash and finance the rest.  You are borrowing $20,000 at .9% over 36 months.  The payment will be 20 x $28.16 which is $563.20/month.  
How do you do the math to get $28.16? That's what's confusing me.

 
How do you do the math to get $28.16? That's what's confusing me.
Not easily done by hand.  I used a financial calculator I have on my phone but there are free ones online: http://www.fncalculator.com/financialcalculator?type=tvmCalculator

If you have never used a financial calculator before, I’ll walk you through the one I linked above.  Enter the following information based the on the terms of the loan in your original post:

Present Value = $1000 (Loan amount)

Payment = leave blank (because this is what we are solving for)

Future Value = $0 (loan balance at the end of the term)

Annual Rate (%) = .9 (The rate they are charging on the loan)

Period = 36 (term of the loan)

Once you completed the above then you need to solve for the payment.  Press the button PMT next to the payment box you left blank above.  If you did everything correctly you should get $28.16.

 
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My fiancee and I are planning on buying a house. Combined ALL our cash assests would be enough cash for 20% down and should cover closing costs at the top end. With the rates so low right now wondering what the thoughts are on putting a full 20% or do a smaller percentage in order to invest/more liquidity?

Prior I always planned for 20% down and that our monthly housing costs (mortgage, taxes, and insurance) would be about 40% of our take home AFTER retirement contributions. I make 2/3rds of our household income and work under the county in an "essential" job. It's a union job, so my job and yearly raises (3.75% each year over next 4 years) are pretty secure. My retirement is a pension that would pay ~60% and I max out my 457 plan ($19k). My fiancee works in the private sector and has only been contributing 3%!! so far. We'll fix this after we buy the home and get a handle on the expenses.

After talking to some lenders one mentioned not needing to put the full 20% down because it's pretty much "free" money right now. Pay 5% down and invest the rest.

I'm 35 and she's 33. We're looking in the Bay Area, CA for context. First time homebuyers. No debts.

What's the play during these times with such low interest rates? Thanks. 

 
My fiancee and I are planning on buying a house. Combined ALL our cash assests would be enough cash for 20% down and should cover closing costs at the top end. With the rates so low right now wondering what the thoughts are on putting a full 20% or do a smaller percentage in order to invest/more liquidity?

Prior I always planned for 20% down and that our monthly housing costs (mortgage, taxes, and insurance) would be about 40% of our take home AFTER retirement contributions. I make 2/3rds of our household income and work under the county in an "essential" job. It's a union job, so my job and yearly raises (3.75% each year over next 4 years) are pretty secure. My retirement is a pension that would pay ~60% and I max out my 457 plan ($19k). My fiancee works in the private sector and has only been contributing 3%!! so far. We'll fix this after we buy the home and get a handle on the expenses.

After talking to some lenders one mentioned not needing to put the full 20% down because it's pretty much "free" money right now. Pay 5% down and invest the rest.

I'm 35 and she's 33. We're looking in the Bay Area, CA for context. First time homebuyers. No debts.

What's the play during these times with such low interest rates? Thanks. 
I would just run the math on what you'd pay in mortgage insurance versus expected returns on the investments. If you have great credit and low ratios then the mortgage insurance can be pretty cheap. Might make more sense to do 10% and split the difference though. I'd ask your loan officer to send you estimates for 5%, 10% and 20% down then run the numbers. 

 
My fiancee and I are planning on buying a house. Combined ALL our cash assests would be enough cash for 20% down and should cover closing costs at the top end. With the rates so low right now wondering what the thoughts are on putting a full 20% or do a smaller percentage in order to invest/more liquidity?

Prior I always planned for 20% down and that our monthly housing costs (mortgage, taxes, and insurance) would be about 40% of our take home AFTER retirement contributions. I make 2/3rds of our household income and work under the county in an "essential" job. It's a union job, so my job and yearly raises (3.75% each year over next 4 years) are pretty secure. My retirement is a pension that would pay ~60% and I max out my 457 plan ($19k). My fiancee works in the private sector and has only been contributing 3%!! so far. We'll fix this after we buy the home and get a handle on the expenses.

After talking to some lenders one mentioned not needing to put the full 20% down because it's pretty much "free" money right now. Pay 5% down and invest the rest.

I'm 35 and she's 33. We're looking in the Bay Area, CA for context. First time homebuyers. No debts.

What's the play during these times with such low interest rates? Thanks. 
Big question is where does PMI kick in?  My first blush is to put in whatever amount is necessary to avoid this and finance the rest at these low rates.

I always thought that PMI kicked in at down payments under 20%, but that may not be the case now or for you.  Your broker will know this off the top of his/her head, I'm sure.

 
For someone starting a brand new ROTH IRA account, if they had to choose between TD Ameritrade and Charles Schwab, which one is best?

 
For someone starting a brand new ROTH IRA account, if they had to choose between TD Ameritrade and Charles Schwab, which one is best?
Can't speak for TDA. I use Schwab but for brokerage so not sure what the fees are like with ROTH. However when you open a Schwab brokerage you get a checking account that has no ATM fees world wide. Perfect for travel abroad (whenever we do that again) or strip clubs.

 
For someone starting a brand new ROTH IRA account, if they had to choose between TD Ameritrade and Charles Schwab, which one is best?
I use both for ROTHs. First, they are merging so eventually it won’t matter. Fees are the same, as in their aren’t any for most trades, both have a ton of options. I like TD’s platform a lot better than Schwab’s but I don’t think you can really go wrong with either of them.

 
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For someone starting a brand new ROTH IRA account, if they had to choose between TD Ameritrade and Charles Schwab, which one is best?
I believe you can get a small new account opening bonus with Schwab if someone with an exiting account sends you a referral. The person referring doesn't get anything though which is kind wacky.

 
Are there any cons to refinancing that I am not thinking of? We bought a house 6.5 years ago, 30 year mortgage at 3.5% APR. My wife has been talking to coworkers who refinanced with owning.com and was thinking we should do the same. They offer a 2.625% APR 30 year mortgage, mentions no fees. Some contingencies are living in CA and having a credit score > 740, which we meet. I realize we slow down our gain in equity by starting over, since a 30 year mortgage is mostly interest upfront. However I assume this would save a few hundred a month for the next.... 23.5 years give or take unless we sell. If I did some back of napkin math correctly, I think paying the remaining 23.5 years at 3.5% will still end up costing ~ $10-20,000 more than paying a full 30 years at 2.625% (subtracting the small amount of principle we have paid so far). 

Is there anything else I should know? Is it as straight forward as just paying less money/month for a longer duration? 

 
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Are there any cons to refinancing that I am not thinking of? We bought a house 6.5 years ago, 30 year mortgage at 3.5% APR. My wife has been talking to coworkers who refinanced with owning.com and was thinking we should do the same. They have a 2.625% APR 30 year mortgage. Some contingencies are living in CA and having a credit score > 740, which we meet. I realize we slow down our gain in equity by starting over, since a 30 year mortgage is mostly interest upfront. However I assume this would save a few hundred a month for the next.... 23.5 years give or take unless we sell. If I did some back of napkin math correctly, I think paying the remaining 23.5 years at 3.5% will still end up costing ~ $10-20,000 more than paying a full 30 years at 2.625% (subtracting the small amount of principle we have paid so far). 

Is there anything else I should know? Is it as straight forward as just paying less money/month for a longer duration? 
Obviously there will be fees to refinance but you'll recoup those in time with the savings.  Keep in mind that you can always pay extra to principal each month so if you want to pay the loan off in 23.5 years (or whatever), you can still do that.

 
Are there any cons to refinancing that I am not thinking of? We bought a house 6.5 years ago, 30 year mortgage at 3.5% APR. My wife has been talking to coworkers who refinanced with owning.com and was thinking we should do the same. They offer a 2.625% APR 30 year mortgage, mentions no fees. Some contingencies are living in CA and having a credit score > 740, which we meet. I realize we slow down our gain in equity by starting over, since a 30 year mortgage is mostly interest upfront. However I assume this would save a few hundred a month for the next.... 23.5 years give or take unless we sell. If I did some back of napkin math correctly, I think paying the remaining 23.5 years at 3.5% will still end up costing ~ $10-20,000 more than paying a full 30 years at 2.625% (subtracting the small amount of principle we have paid so far). 

Is there anything else I should know? Is it as straight forward as just paying less money/month for a longer duration? 
If you're keeping the same mortgage duration, then thats pretty much it.   Pay a small fee up that gets rolled into the loan and save over the long run.   Only way i think u lose if you move before the break even point.    How was your experience with owning?  Are they just another "give your contact info to a bunch of different places" type?  I'm looking for a place to refi myself.  

 
For someone starting a brand new ROTH IRA account, if they had to choose between TD Ameritrade and Charles Schwab, which one is best?
Depends what you want to do.

I'm pretty happy with Schwab, one of our college accounts got bought by them (USAA) - although I use E-Trade and Fidelity for actively managing. I like M1 for my set and forget accounts (both Roth IRAs and our mortgage-pay-off fund). 

 
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Are there any cons to refinancing that I am not thinking of? We bought a house 6.5 years ago, 30 year mortgage at 3.5% APR. My wife has been talking to coworkers who refinanced with owning.com and was thinking we should do the same. They offer a 2.625% APR 30 year mortgage, mentions no fees. Some contingencies are living in CA and having a credit score > 740, which we meet. I realize we slow down our gain in equity by starting over, since a 30 year mortgage is mostly interest upfront. However I assume this would save a few hundred a month for the next.... 23.5 years give or take unless we sell. If I did some back of napkin math correctly, I think paying the remaining 23.5 years at 3.5% will still end up costing ~ $10-20,000 more than paying a full 30 years at 2.625% (subtracting the small amount of principle we have paid so far). 

Is there anything else I should know? Is it as straight forward as just paying less money/month for a longer duration? 
If 30 year is at 2.6 I guess 15s are close to 2?  With TJCA mortgage interest deduction (for most, unless the house is big money) becomes much less important and a 15 year at a super low rate should be looked at, at least.

 
If you're keeping the same mortgage duration, then thats pretty much it.   Pay a small fee up that gets rolled into the loan and save over the long run.   Only way i think u lose if you move before the break even point.    How was your experience with owning?  Are they just another "give your contact info to a bunch of different places" type?  I'm looking for a place to refi myself.  
We don't have any experience with owning, just recently my wife has heard from other people about it so we started looking into it. She made it sound like the people she knows are happy with it, but I don't know the details. 

If 30 year is at 2.6 I guess 15s are close to 2?  With TJCA mortgage interest deduction (for most, unless the house is big money) becomes much less important and a 15 year at a super low rate should be looked at, at least.
15 years are not at that big of a discount there from what I can tell, we would have to pay some of the loan off to get down to 2.25%, since they don't offer that rate for the amount we currently owe. With the amount we currently owe the only offer 2.5%. 

We do have enough money in the bank to potentially pay off 50% of what we owe if we really wanted to decrease monthly costs. We are also casually looking at either remodeling or moving to get a little more space, so not sure how that effects the decision. Ideally we could move without selling this house, though that would take a bit of a windfall for us or a market downturn. Then we would need more cash on hand vs paying off some principle. 

 
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My fiancee and I are planning on buying a house. Combined ALL our cash assests would be enough cash for 20% down and should cover closing costs at the top end. With the rates so low right now wondering what the thoughts are on putting a full 20% or do a smaller percentage in order to invest/more liquidity?

Prior I always planned for 20% down and that our monthly housing costs (mortgage, taxes, and insurance) would be about 40% of our take home AFTER retirement contributions. I make 2/3rds of our household income and work under the county in an "essential" job. It's a union job, so my job and yearly raises (3.75% each year over next 4 years) are pretty secure. My retirement is a pension that would pay ~60% and I max out my 457 plan ($19k). My fiancee works in the private sector and has only been contributing 3%!! so far. We'll fix this after we buy the home and get a handle on the expenses.

After talking to some lenders one mentioned not needing to put the full 20% down because it's pretty much "free" money right now. Pay 5% down and invest the rest.

I'm 35 and she's 33. We're looking in the Bay Area, CA for context. First time homebuyers. No debts.

What's the play during these times with such low interest rates? Thanks. 
I’d put down less than 20% less because of investing but because I’d feel uncomfortable putting all my cash into the down payment. It’s not going to be a great work environment for a while so if your wife wasn’t working would you be able to handle that? Also, kids in the plan? You guys aren’t old enough yet that I’d be sure there’s no chance. No cash and wife staying home ok?

We went through a while (3 kids, wife at home for 12 years) where saving was non existent and we built up some debt. Different world now after 7 years of dual income, no debt and savings beyond what I would have imagined 7 years ago, but it wasn’t easy. Point is that having no cash would scare me. Hopefully, we won’t ever get near that again. I had a good paying job but having a house and kids is expensive.

 
My fiancee and I are planning on buying a house. Combined ALL our cash assests would be enough cash for 20% down and should cover closing costs at the top end. With the rates so low right now wondering what the thoughts are on putting a full 20% or do a smaller percentage in order to invest/more liquidity?

Prior I always planned for 20% down and that our monthly housing costs (mortgage, taxes, and insurance) would be about 40% of our take home AFTER retirement contributions. I make 2/3rds of our household income and work under the county in an "essential" job. It's a union job, so my job and yearly raises (3.75% each year over next 4 years) are pretty secure. My retirement is a pension that would pay ~60% and I max out my 457 plan ($19k). My fiancee works in the private sector and has only been contributing 3%!! so far. We'll fix this after we buy the home and get a handle on the expenses.

After talking to some lenders one mentioned not needing to put the full 20% down because it's pretty much "free" money right now. Pay 5% down and invest the rest.

I'm 35 and she's 33. We're looking in the Bay Area, CA for context. First time homebuyers. No debts.

What's the play during these times with such low interest rates? Thanks. 
I always thought the goal was to hit 20% to avoid PMI, since that is just burning money. I mean, if you are a good investor, maybe you could make the difference up with investments, but that seems awfully risky to me. 

 
Didn't read the thread, but I'll post this question even if it's been answered before.  Just point me to the discussion if that's the case...

Do you guys use a local CFP or other face to face wealth manager, or do you use an online "robo advisors" or a hybrid or do you just go it alone?

Also, is the consensus on "whole life" insurance still that it's not a great place to hedge for "non-market-correlated" investments?  Are there better places for non-market correlated investments that have OK returns? 

 
Didn't read the thread, but I'll post this question even if it's been answered before.  Just point me to the discussion if that's the case...

Do you guys use a local CFP or other face to face wealth manager, or do you use an online "robo advisors" or a hybrid or do you just go it alone?

Also, is the consensus on "whole life" insurance still that it's not a great place to hedge for "non-market-correlated" investments?  Are there better places for non-market correlated investments that have OK returns? 
I think most of the posters active in this thread go it alone WRT wealth management/retirement planning. But that’s because the topic doesn’t make our eyes glaze over and some of us like thinking and reading about it.

If that’s not you, or if you have a complicated or large estate, it’s a good idea to at least consult with a fee only FA who acts as a fiduciary and isn’t there to sell you a product (such as whole life).

And as to whole life, that has been discussed in this thread a few times and IMO the consensus is that you shouldn’t mix insurance and investing and that whole life is probably only useful for very specific situations. There are others here that disagree; however, I do believe that most of these folks are in the business of selling whole life.

 
Didn't read the thread, but I'll post this question even if it's been answered before.  Just point me to the discussion if that's the case...

Do you guys use a local CFP or other face to face wealth manager, or do you use an online "robo advisors" or a hybrid or do you just go it alone?

Also, is the consensus on "whole life" insurance still that it's not a great place to hedge for "non-market-correlated" investments?  Are there better places for non-market correlated investments that have OK returns? 
Agree that most in this thread go it alone. I'm actually trying to break into the CFP business as a mid-life career change. I really enjoy the subject and think it would be a fun career.

If you have the time and patience to go it alone, you should try that. I would recommend a Morningstar subscription as money well spent. Even if you go it alone, getting a second set of eyes and opinion can be very helpful to counter your natural biases. Whether that is a one time fee only CFP, or a friend or this thread, it's worth the extra opinions, especially as you get past your 40s. 

 
Didn't read the thread, but I'll post this question even if it's been answered before.  Just point me to the discussion if that's the case...

Do you guys use a local CFP or other face to face wealth manager, or do you use an online "robo advisors" or a hybrid or do you just go it alone?

Also, is the consensus on "whole life" insurance still that it's not a great place to hedge for "non-market-correlated" investments?  Are there better places for non-market correlated investments that have OK returns? 
I’d be happy to give you a focused confidential review. I believe I still owe you a favor 😉

I consider myself pretty savvy and have done the same for my in laws, essentially played the role of an FA, they were happy with the advice 

 
Random question.

If you do your taxes somewhere like H&R Block, is it possible to meet with them and file your taxes jointly without your spouse present?  

 

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