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[ad_1] When Curtis Mangus of Premier Mortgage Resources in Meridian, Idaho looked into pivoting into reverse after serving decades in the traditional mortgage business, he asked his managing partner at the lender about its reverse mortgage department. The partner smiled. “You are the reverse mortgage department,” he said. Mangus then worked to build the dedicated reverse mortgage department at his new company from scratch and has found a notable degree of success by building Home Equity Conversion Mortgage (HECM) for Purchase (H4P) business through the use of continuing education (CE) classes designed for licensed real estate agents. The result is that H4P business has become a notable share of his total business. Since H4P volume is only a small fraction of the total business done in the reverse mortgage industry based on 2021 data, Mangus sat down with RMD to discuss his approach in successfully cultivating H4P business. 1% of the national HECM for Purchase total Understanding the reality of national H4P business is key to contextualizing the success Mangus has had in his own business, he explains for RMD. “Of the six million home purchases done in 2021 only about 2,200 of them were H4P,” he says. “The product is not even on the radar screen for [real estate] agents. I closed 28 H4P transactions last year, over 1% of the national total. My market share in this area continues to grow steadily even though on a national level it is stagnant or even declining.” Curtis Mangus Mangus began teaching CE classes designed for real estate agents around 2011, as the mortgage industry was still finding ways to fully recover from the 2008 financial crisis. Touching on the reverse mortgage topic in one of these classes proved to be a difference-maker for him, he says. “Over the years I ended up teaching classes on renovation loans, mortgage insurance, mortgage mechanics, etc.,” he says. “Then about six years ago, I taught a class on government loans and included a class section on reverse mortgages, and things have never been the same.” His reverse loan production accelerated when walking his referral partners through the intricacies of a reverse mortgage, but says that more specific interest was derived from discussions specifically about H4P. “When I started teaching this section on HECM for Purchase, I could not get the agents to talk about anything else,” he says. “I subsequently have developed two more CE classes that only deal with HECM loans. In the last six years, my HECM production has steadily grown.” In 2020, his personal loan production broke 100 units, and increased by an additional 25% in 2021, he says. 60% of his volume comes from traditional HECM loans, 20% came from HECM for Purchase, and the final 20% from HECM-to-HECM refinances, he says. The key difference in the acceleration of his business has been in offering the CE classes to referral partners, most specifically real estate agents. The power of CE classes for referral partners The idea of creating CE classes is not a new one, Mangus says, and it does not only work for one type of partner like real estate agents. “CPAs, attorneys and financial planners also need CE credits as well,” he says. “If you’re able to provide value in a CE class, I believe this strategy can work with most financial professionals [to increase reverse mortgage business]. Real estate agent CE classes are required in all states, but unfortunately there is not much uniformity between states.” Mangus has had CE classes approved in seven states, he says, and there is not much crossover in the content when comparing the variations offered in the different states, he explains. “If you’re a reverse mortgage professional interested in this marketing strategy check with a few of your agent friends, and the state real estate board on what it takes to be a CE instructor, and get a CE class approved,” he recommends. For anyone interested in putting such a plan into practice, Mangus has a series of “tips” that professionals can use to develop their own class offerings in their specific localities, particularly if H4P is a business segment sought for expansion. “The first tip is to teach the H4P section first since this will keep the agents engaged when they find out they can actually get a paycheck from the loan,” he says. “Be sure to keep the H4P section and the refinance section completely separate. Their heads will explode if you don’t.” Mangus also says that practicing delivery is key, describing that even having taught over 200 classes himself, different audiences will not react uniformly to the information. Practicing delivery will ensure clear and concise communication of detailed reverse mortgage information. Stories and anecdotes that help to contextualize the information also assist in comprehension by attendees, he explains. When telling those stories or anecdotes, anything directly related to H4P can provide a boost to both understanding and enthusiasm, he says. “One rhetorical question I use tends to sum it up: ‘who doesn’t want to buy a house for half, and then never make a payment?,” he says. Connecting a reverse mortgage to a retirement strategy Reverse mortgage professionals are all too familiar with the potential illustrative power of tying the product to a comprehensive retirement strategy, especially as retirement in America comes under further strain based on attributes like rising debt levels and dwindling retirement savings. Making a direct connection between reverse mortgage subject matter and the generally risk-averse nature of financial professionals can be helpful, Mangus says. “Tie the class into a retirement strategy. This is a lesson I learned the hard way,” he says. “Showing people how they can extract equity out of the house is not nearly as effective or impactful as tying the use of the product to a larger retirement strategy. Be sure to address the myths related to ‘not owning the home’ or ‘signing over the equity to the bank’ early on in the class.” Connecting with the professionals you teach

[ad_1] I was a college intern at a local investment firm when I first learned what a “stock market crash” was. It was 2001 and the market was already on the decline. After the tragic events of 9/11, the stock market continued to lose value. Here’s how the S&P 500 looked in 2001 (chart courtesy of Koyfin.com): Stock Market Crash of 2001 The chart above may show what the stock market crash “looked” like but I assure you it doesn’t capture what it felt like. The look of defeat on the financial advisors I was working with could not go unnoticed. For those that lived it you know the crash didn’t stop in 2001. It continued well into 2002 erasing millions of wealth in our country. I thought that was the stock market crash I would ever witness in my life. That was until 2008… New investors often think of stock market crashes as rare events when in fact, the opposite is true. The market experiences a crash every few years. While the COVID Crash of 2020 might have been a nightmare in its own right, it’s far from the worst crash ever. That one was so short-lived that you probably don’t even remember it happened. But since I experienced 2 stock market crashes fairly close to each other and recognizing it has been over 13+ years since anyone has experienced a really severe down market, I thought it would be a good idea to warn new investors. Especially for those that started investing with online apps or brokers that have only seen green when they check their accounts. To put the stock market crash factor into perspective, I’ve put together this list of the top 10 worst stock market crashes in history. As you’ll see, stock market crashes come in all shapes and sizes, and they’re even common throughout history. This list goes on the way back to 1907, which goes to show you how long crashes have been taking place. What is a Stock Market Crash? A stock market crash is a noticeably rapid decline in share prices. Stocks normally fluctuate, even within the same day. There could even be identifiable patterns, like the market rising on a few percentage points one week, then falling a few the next. It all balances out, and either the market continues to rise, or stays in a narrow trading pattern. We can think of a crash as being a disturbance in the normal pattern. Rather than repeating the cycle of short-term advances and declines, the market goes into a deep dive. There’s no specific definition of what a stock market crash is, and they’re often labeled well after the fact. But a stock market crash can be seen as an unusually large decline in the market, typically happening within a short time frame. The Different Causes of Stock Market Crashes Market crashes can come about because of extended gains, which can last over many years. These are sometimes referred to as bubbles, that can come crashing down when valuations get too high. A good example of this was the Dot-com Bust in 2000 (which only made #8 on this list). Losses in that crash were concentrated in technology stocks that reached levels that have nothing to do with their financial fundamentals. What happened afterward was totally predictable, even though it didn’t seem obvious at the time Other times, market crashes are caused by major events. Examples include the World War II Crash (#7 below) and the Crash of 2020 (#10). One was caused by a world war, and the other by a global pandemic. Like market bubbles, market crashes last until they peter out. That’s usually brought about by a combination of stock prices falling to more reasonable levels, and some combination of positive developments that reverse the negativity that caused or contributed to the crash. The upshot is that each crash sets up the next boom. For that reason, we should think of crashes as an opportunity to buy stocks at deep discounts. What’s the Difference Between a Stock Market Crash and a Bear Market? It can be difficult to establish the dividing line between a stock market crash and a bear market. This is mostly because the end result is the same – most investors lose money, and usually a lot of it. But the main factor separating the two is duration. Crashes tend to be short and sharp. For example, the market may lose 30% in just two or three months. Or in the case of the Crash of 1987 (#9), it may last only a few weeks. There have been crashes that lasted only a few days. These are what are often referred to as flash crashes. Bear markets, on the other hand, tend to last longer. Generally, they’ll go at least one year, but can often run for two or three. Some bear markets, like the Crash of 1929, lasted for several years, and include a series of crashes. This gray zone between stock market crashes and bear markets also explains why there are different lists on what makeup the biggest crashes in history. Top 10 WORST Stock Market Crashes in History Our list of the top 10 worst stock market crashes in history takes in every identifiable crash since 1900. In most cases, I’ve used the Dow Jones Industrial Average to determine the percentage decline and duration of each crash. That’s because it was the primary measure of the stock market, at least until the 1970s, when the S&P 500 and the NASDAQ started becoming more standard measures. Here are the top 10 stock market crashes in history: 1. September 3, 1929 to July 8, 1932 Percentage Decline: 89.2% Duration: 34 months Without a doubt, this crash is the worst in stock market history. It was the first of a series of crashes that occurred during the 1930s and early 1940s, during the time commonly referred to as the Great Depression. What made the

[ad_1] The post Sustainable Investing: Profit While Protecting the Earth appeared first on Millennial Money. There’s an unfair assumption that all corporations put profits first and couldn’t care less about our fragile environment. But like many assumptions, that’s not true. In fact, there are a lot of companies focusing on sustainable practices to protect the Earth. And you can invest in them to both lend your support and make some potential profits along the way. In this guide to sustainable investing, we’ll explore how you can make money from doing good for the planet. Table of contents What Is Investing in Sustainability? Sustainability Isn’t a New Concept Reduce, Reuse, Recycle Sustainable Investing vs. Socially Responsible Investing (SRI Sustainability and socially responsible investing aren’t exactly interchangeable Other terms for sustainability How to Invest in Sustainability Disadvantages of sustainable investing Standardization and lack of information  Research and due diligence Alternative Ways to Invest in Sustainability Building a Sustainable Lifestyle What Is Investing in Sustainability? Dictionary.com defines sustainability as “the quality of not being harmful to the environment or depleting natural resources, and thereby supporting long-term ecological balance.” You will often see companies in the agricultural and retail industries talking about sustainability.  Investing in sustainability means investing in companies that take sustainability seriously. Sustainability Isn’t a New Concept The EPA’s discussion of the importance of sustainability started with the National Environmental Policy Act of 1969. It was one of the first laws that focused on protecting future resources and considering the social, economic, and environmental impacts of business practices. Decades later, concerns about climate change and environmental damage are still being discussed and researched for future generations.  Reduce, Reuse, Recycle Us older millennials and prior generations might remember the EPA’s Reduce, Reuse, Recycle campaign. This simple alliteration got us thinking about sustainability and how small, simple actions can have a large impact.  In addition to Reduce, Reuse, Recycle, the EPA’s site has several other resources for greener living. Topics include Living Sustainably, Being Green on the Road, Throw Away Less, Choosing Greener Products & More.  Learn More: Decluttr Review 2022 7 Easy Ways To Make Money Recycling Best Selling Apps for 2022 | Sell Your Stuff Online or Locally Sustainable Investing vs. Socially Responsible Investing (SRI When researching sustainability and social responsibility in investing, many common terms will seem interchangeable. One term I have been seeing often is ESG, which stands for “Environmental, Societal, and Governance” factors. ESG, socially responsible investing, and sustainability all seem to be intertwined. Sustainability and socially responsible investing aren’t exactly interchangeable Although these types of investing terms seem to be interchangeable, there are some subtle differences. Sustainability is a subset or part of socially responsible investing corporate social responsibility. By definition, sustainability focuses primarily on the environmental factor. Socially responsible investing as a whole is the “big picture.” Sustainability is in the details.  However, when sustainability was one of the top buzzwords in my MBA program, it referred to the likelihood of a company being able to take action for the long term. Is this variable sustainable over time? Sustainability is often synonymous with long-term impact.  Other terms for sustainability The Forum for Sustainable and Responsible Investment is a great resource to learn more about investing in sustainability. Other terms that describe sustainability are ethical, community, or impact investing. You may also see green, mission-related, or socially responsible investing.  How to Invest in Sustainability You can start with an SRI investment strategy. Betterment has created three portfolios of low-cost exchange-traded funds (ETFs) that focus on SRI practices. Along with Social Impact and Broad Impact portfolios, Betterment offers a Climate Impact portfolio that supports companies working to mitigate climate change. Morningstar has created its own sustainability rating. FinancialMechanic.com has broken it down: Morningstar deducts points from a corporation’s sustainability rating if there are ESG problems, lawsuits, or other issues. This is one option for finding sustainable funds.  Partnersinfire.com mentions two other sources for sustainability reporting: MSCI ESG ratings and Sustainalytics ESG Ratings. Although different agencies have different standards, you can research them and see which most align with your values.  If you want to  make an even more positive impact with your investing, partnersinfire.com also mentions mentions an impact-investment reporting process that is even more thorough than sustainability reporting. Betterment Varies Betterment can help grow your money by making saving and investing easy. Invest in a tailored portfolio, set buckets for your goals, and earn rewards. Get Started Disadvantages of sustainable investing There are disadvantages to a responsible investing strategy using ESG issues, sustainability, or social responsibility.  Standardization and lack of information  One issue with sustainable investing is financial return. Data shows that there isn’t a strong argument that sustainable investing, or socially responsible investing at the higher level, outperforms other investments.  A big issue is a lack of information. ESG scorecards, sustainability reports, and other SRI data don’t have a standard governing body or data-reporting tools. This also causes a lack of transparency in what companies could be in the different sustainable funds.  Research and due diligence Another disadvantage to sustainable investing is research and due diligence. This may be a disadvantage only to passive investors. For those who want a “set it and forget it” investment strategy, sustainability may require further research. Because of the lack of standards and transparency, further research is required to make sure you are investing according to your values and the impact you wish to make.  Alternative Ways to Invest in Sustainability You don’t have to directly invest in sustainability through mutual funds. There are other ways to invest directly. Invest in companies that you value by purchasing their goods and services or stocks. Recommend your favorite companies to others and mention that you love their products and that the company believes in corporate responsibility as well. Show others how the company makes an impact on their communities.  Learn More: Renewable Energy Stocks: 11 Green Energy Companies With Massive Upside Potential 7 Best Climate Change Stocks to Buy Right Now 5 Top

[ad_1] You can grab a deal on my favorite magnesium lotion right now! Rare deal on my favorite magnesium lotion! This week only, one of my favorite small businesses is running a great promotion for Sleep Awareness Week! When you purchase two or more 4-ounce jars of Magnesium Lotion, you’ll get a FREE 2-ounce bottle of Magnesium Oil! No coupon code is required for this deal. Simply add at least two jars of Magnesium Lotion to your cart and you’ll automatically be sent a free bottle of Magnesium Oil! There are two different scents of lotion to choose from: original unscented or lavender. Why we love this lotion! We love this stuff so much! If you struggle to fall asleep or stay asleep, I highly recommend it! We use a little bit on Kierstyn before bed every night (we put it on the bottoms of her feet and the backs of her legs) and she sleeps so much better — and we always regret it when we forget to put it on her because she never sleeps as well! You only need to use a tiny bit so it lasts for a very long time (which makes it well worth the money!). This deal is valid through March 20th, while supplies last. Go here to take advantage of this deal before it sells out! [ad_2] Source link

[ad_1] Meaningful talks needed to stop Russia in Ukraine, Zelenskiy says [ad_2] Source link

[ad_1] Banks and non-bank financiers active in the vehicle finance market are relying on the used-vehicle segment to drive growth in the current quarter. According to analysts who track the financial sector, the ongoing conflict between Russia and Ukraine may rekindle issues related to the supply of semiconductor chips and affect the supply of new vehicles. Vehicle finance was already a laggard in the universe of consumer loans even before Russia launched military action against its neighbour. As per sectoral data released by the Reserve Bank of India (RBI), outstanding vehicle loans from banks grew just 2.5% year-on-year (y-o-y) in January 2022 to `2.81 lakh crore as of January 28. Overall retail loan growth stood at 11.6% during the same month. Sector watchers attribute the muted trend in vehicle finance to Covid-led disruptions, lower availability of cars and utility vehicles (UVs) as also persistent weakness in the two-wheeler, tractor and commercial vehicle (CV) segments. In a recent note, Emkay Global Financial Services said — citing bankers — that the ongoing geopolitical crisis has raised fresh concerns around supplies of semiconductors and vehicle availability. However, the supply of fresh vehicles had improved during the festive season. “As a result, few financiers have ventured into used-car financing to garner volume and better yields…some caution could be seen among bankers in the near-term in case a prolonged Russia-Ukraine conflict could lead to fuel price hikes or business disruption,” analysts at Emkay said. Motilal Oswal Financial Services in a report dated March 16 said that used vehicles across product categories continue to demonstrate strong demand momentum. “Pricing of used vehicles has increased 8-12% led by higher prices of BS-VI vehicles and is aiding the higher value of disbursements,” the broking firm said, adding that the demand for new CVs and commercial equipment (CE) remains weak. Some analysts have attributed the weak demand for new vehicles to rising consumer prices. In a March 14 report, analysts of Nomura highlighted the risk of a slowdown in mass consumption segments due to rising inflation. Fuel prices are likely to rise further and there could be a 2-3% increase in customer cost of ownership for every `10 increase in fuel prices, they said. “Further concern is on consumption sentiment due to factors like lower economic growth and rise in inflation,” analysts at Nomura further said. Consumer price index (CPI) inflation surged to 6.07% in February 2022 from 6.01% in January. The central government is believed to have been holding off from hiking excise duties on fuel ahead of elections to five state assemblies, but price hikes are now widely expected. [ad_2] Source link

[ad_1] The National Association of Realtors reported that existing home sales for February came in as a miss of estimates at 6.02 million. This level is still within my 2022 forecast sales range between 5.74 million and 6.16 million. Last year I discussed sales levels coming back down to 5.84 million and I am looking for more of the same in 2022, at the 5.74 million level. The month-to-month fall of existing home sales was noticeable, but I didn’t buy the January print of 6.5 million because I thought we had some spillover demand from December, so this month’s sales look right. NAR Research: Total existing-home sales sank 7.2% from January to a seasonally adjusted annual rate of 6.02 million in February. While demand is solid, the savagely unhealthy aspect of housing is continuing. Inventory has broken to all-time lows, but it doesn’t look like the year-over-year data will be positive at all this year unless demand softens up. You can see why I have been on team higher mortgage rates for some time now because we don’t have any other way to get off this madness. NAR Research: Unsold inventory sits at a 1.7-month supply at the current sales pace, up from the record-low supply in January of 1.6 months and down from 2.0 months in February 2021. Now inventory is about to have its seasonal push, but the key is that we want to see inventory increase year over year, not have declines year over year. At this point, I will be grateful for being just flat. However, negative year-over-year inventory is not what we want to see. Total inventory data is deficient, and this was my biggest fear in the years 2020-2024, and it happened. Inventory has been slowly falling since 2014, so if demand picks up in 2020-2024, it can collapse to shallow levels. Currently, the total Inventory from the NAR is 870,000. To get the housing market to be sane and normal again, we need inventory to get back in a range between 1.52 – 1.93 million; this is still historically low, but this gives the housing market a breather from the madness that we see today. Since the end of 2020, I have tried my best to stress that home prices overheating should always be the concern in 2020-2024. You can’t have the best housing demographics ever, with the lowest mortgage rates and the best loan profiles with falling inventory for eight years, and not be concerned about this during 2020-2024. I thought creating the term forbearance crash bros in the Summer of 2020 would help educate homebuyers. However, we still live in a society where the premise that housing will crash 40%-80% is looked at as a logical view. After 11 years of listening to people talk about housing crashing from 2012-2022, you have to ask yourself who is the bigger fool: the fool, or the fool who follows them? A significantly older man named Ben said that. Home prices are still overheating even today because we currently have a raw shortage of homes. This is not a good thing and is why I am on team higher rates. NAR Research: The median existing-home sales price rose to $357,300, up 15.0% from one year ago. One of the critical data lines that I want to see improve this year is days on market. My concern now is that some sellers are feeling stressed about this market, which should never happen because this is the best seller market ever. However, a seller is also a natural homebuyer, unless they’re an investor. People who sell need to live somewhere. With such meager inventory, inflation has risen so much., even for rental housing. You can see why some sellers are stressed now. Nobody wants to sell their home at a mortgage rate of 3.25% or lower if they can’t find a home they like, then be forced to rent at a higher cost. Americans are starting to realize now that being a homeowner was the best hedge against this burst of inflation. So what I would love to see is that days on market grow to create a pause in this housing market, so some sellers don’t feel stressed about selling and kill off this super-hot price growth. Sadly enough, that hasn’t happened yet. NAR Research: First-time buyers were responsible for 29% of sales in February; Individual investors purchased 19% of homes; All-cash sales accounted for 25% of transactions; Distressed sales represented less than 1% of sales; Properties typically remained on the market for 18 days. To show some historical perspective on the NAR breakdown of the different types of homebuyers, the chart below shows market conditions back in 2016. As you can see from this NAR report, cash buyers as a percent of sales is slightly lower now than levels in 2016. However, distressed sales are down a lot today compared to back then, and sales to investors are 19% today compared to 16% back then. From NAR in 2016: First-time buyers were 32% in November; Investors were 12%; All-cash sales were 21%; Distressed sales were 6%. The current existing home sales report continues the trend of an unhealthy housing market but it is now becoming a savagely unhealthy one. I need people to understand that shelter cost differs from the prime focus on rising and falling home prices. Housing is the cost of shelter to own the debt; it’s not an investment. This is the most prominent housing demographic patch ever recorded in history. This housing market isn’t driven by FOMO (Fear Of Missing Out) or people trying to make a quick buck. That was the housing market of 2002-2005, not what we have today. You can easily see below that we don’t have the credit boom as we did during the housing bubble years. We have solid replacement buyers: people needing shelter. The problem we have now is that we have a raw shortage of inventory for the number of Americans that

[ad_1] Each week, Cut the Crap Investing founder Dale Roberts shares financial headlines and offers context for Canadian investors. The Fed moves, just a scooch   On Wednesday of this week, Federal Reserve chairman Jerome Power made the move on rates. The Federal Open Market Committee raised U.S. overnight interest rates by 0.25% to 0.50%, its first rate hike since December 2018.   Source: S&P Global  Central bankers embarked on what may turn out to be a lengthy and difficult challenge to wrestle inflation to the ground. Earlier this month, the Bank of Canada also increased the overnight rate from 0.25% to 0.5%.  Financial analysts expect both central banks to raise borrowing costs several times this year and next. The Fed board is predicting six rate hikes in the U.S. in 2022. If each rate hike is 0.25% that would put the overnight rate at 2.25%. There is the possibility of a 0.5% rate hike thrown into the mix.  Here is the “everything you need to know” about rate hikes history.  Everything you need to know about #rate hikes, #yield #curves, and #recessions in one table. Here is the takeaway, rate hikes ALWAYS lead to #recession, without exception, it is just a function of time. pic.twitter.com/fjPECAIQ9U — Lance Roberts (@LanceRoberts) March 18, 2022 Equities initially fell with the rate announcement: the S&P 500 (IVV) was down 0.3% at the start of Jerome Powell’s press conference. Powell then charmed the markets into a sharp turnaround, suggesting that the U.S. economy was strong enough to withstand higher rates. Stocks closed on Wednesday with the S&P 500 rising 2%. Canadian stocks (XIC.TO) followed to the upside with a gain of 1.3%. The hard-hit Nasdaq (QQQ) was up over 3%.  Markets continued to recover throughout the week, but softened modestly at the opening on Friday.  Source: S&P Global  The longer-term inflation projections  Today, we are living with the cold hard fact that inflation hits our pocketbooks. We are paying more for most everything, especially energy, food, rent and home ownership.  In Canada, the Consumer Price Index rose 5.7%in February from a year earlier, up from 5.1% in January, according to Statistics Canada. That was the highest inflation reading since August 1991. For 11 consecutive months inflation has been on the rise for Canadians.  That said, our inflation rate lags that of the U.S., where it hit 7.9% in February.  The bond market will project future inflation rates. The market thinks inflation will cool considerably, but stay well above the central bank target of 1-3%.  DataTrek shares this info via email.  Market-based expectations for future U.S. inflation have broken out to new highs in the last 10 days. Using data from the TIPS (Treasury Inflation Protected Securities) market back to its start date in 2003:  At present, TIPS are pricing in 3.52% annual inflation for the next five years and 2.94% for the next 10 years. Before 2021, the highs for expected inflation were back in March 2005, at 2.94% (5-year) and 2.76% (10-year). In November 2021, expectations for inflation hit 3.17% (new record for 5 years) and 2.76% (tying the 2005 record for 10 years). Just as we will be learning to live with COVID over the next several years, we might also be living with more elevated rates of inflation.  Money flows to the world’s greatest investor I have long touted Berkshire Hathaway (BRK) (BRK.B) as a very useful defensive holding. I would consider the stock a market correction hedge. It also gives you some value investing exposure. The company and stock tends to perform very well during times of market stress, and especially through major stock market corrections.  As you likely know, Berkshire Hathaway is the conglomerate run by Warren Buffett, who is often called the world’s greatest investor. Berkshire Hathaway has grown its portfolio at a 20% CAGR (Compound Annual Growth Rate) over the past 57 years. That’s one of the best investment track records of all time.  This post on Seeking Alpha looks at the returns of Berkshire Hathaway versus the S&P 500 over 20 years. Note: The article was published in May of 2021.  We see the total returns comparison over a 10-year period to May of 2021.  Source: Seeking Alpha  That’s usually when market commentators start to write of Mr. Buffett. As a value investor, he will underperform during rip roaring bull markets where growth stocks rule.  But go back through market corrections and you get a different picture.  Source: Seeking Alpha I had suggested in the Seeking Alpha post that you can try to invest like Buffett, or you can buy the stock and invest with Buffett. He generates returns by taking advantage of stock market corrections, and he has been on the sidelines for a long time. He was mostly not buying stocks during the COVID correction or early 2020.  The share price of Berkshire Hathaway topped $500,000 for the first time on Monday, reflecting the company’s status as a defensive stock in a market unsettled by events in Ukraine and rising inflation. Berkshire’s class A shares have gained 10% in 2022, outpacing the S&P 500. The U.S. market is down 8% into this week, year-to-date.  I use Berkshire Hathaway as part of my investment risk management. Berkshire is the largest individual stock holding in my wife’s accounts.  If we do get a meaningful stock market correction, Buffett and his team have nearly $150 billion in cash to go shopping for stocks at fire sale prices.  Investors can easily invest in Berkshire Hathaway in Canadian dollars by way of Canadian depository receipts. Those CDRs are courtesy of the NEO exchange.  Geopolitical fallout hits semiconductors  Fears of a Chinese invasion of Taiwan, plus the risk of Chinese support for the invasion of Ukraine is creating additional geopolitical risk. The ongoing war between Russia and Ukraine is front and centre for many investors. Also, add on the fears of an economic recession.  For my March 6 column, I detailed how the invasion of Ukraine is fueling inflation. It is

[ad_1] Have you ever considered buying a vacation property for a short-term rental? I think it’s a pretty common idea. And in a perfect world, it can combine the best of leisure and investing in one property. I recently received a question from a reader who is considering taking the plunge: “My wife and I are in our mid 50’s, debt free and own our home. We would like to have place that our family and kids could use while we explore future retirement areas near the vacation home.  Most traditional planners/CPAs advise against it but we’re curious what the Wealth Hacker view is.” – Thanks, Steve Steve hasn’t asked specifically about the rental potential on the property. But since it’s a common outcome, I decided to include it in the pros and cons of buying a vacation property for short-term rentals. I’ll be addressing Steve’s direct questions, as well as the short-term rental aspect. I’ll start by covering the pros, then move on to the cons. My hope is that by presenting both, I’ll not only answer Steve’s question, but also provide valuable information for other readers considering a vacation home purchase. Pros of Buying a Vacation Property for Short-term Rentals Without a doubt, there are real advantages to buying a vacation property for short-term rental. But before we get into those, I first want to be clear that we’re talking about these benefits as they relate to vacation property. Put another way, a vacation property isn’t an investment property, so the benefits will be different. While an investment property is strictly a money-venture, a vacation property is something of a hybrid. Much like the house you live in, a vacation property provides personal benefits, but has the potential to produce financial gains at the same time. With that said, let’s move on to the pros of owning a vacation property. 1. You Can Generate Additional Income If you buy a vacation property strictly for personal use, it’ll add an expense to your budget, and a major one at that. But by renting it out at least part of the time, you can generate some income from the property. For example, let’s say the payment on your vacation is $1,500 per month. By renting it out one week out of each month, also at $1,500, you’ll cover the cost of keeping the home. But if you rent it out any more than one week each month, the property will generate a positive cash flow. You can also get creative here. You can rent the house out during certain times of the year and keep it strictly for personal use the rest of the year. Maybe you choose to rent the house out “in season” only. That might mean earning $2,500 per week for the 12 weeks of the peak season. That arrangement will cover the monthly carrying costs for the entire year, while producing a $12,000 profit. Meanwhile, you’ll have the benefit of enjoying the home 40 weeks out of each year. In that way, the house will be an investment property 12 weeks out of the year, and a vacation home for the other 40. 2. You Can Earn Long-term Capital Appreciation Most people find the house they live in to be one of the best investments they ever make. Even if you don’t view your primary residence as an investment, but rather as your home, it can work in both directions. The house you buy for $400,000 and live in for 20 years may be worth twice as much in the end. That’s a financial win-win of the best kind! The same thing can happen with a vacation home. You might buy the property for $200,000, then it doubles to $400,000 twenty years later. Along the way, you’ll have enjoyed spending your vacations in the home, while also renting it out to generate income. This is where it’s important to understand the leverage advantage that real estate provides. Unlike most other investments, real estate is typically purchased primarily using borrowed money. That magnifies your investment returns by a lot. If you purchased a $200,000 vacation property with a 20% down payment – $40,000 – and the value doubled to $400,000, you’ll really be earning a $200,000 profit on a $40,000 investment. That’s a 500% gain in 20 years! At the same time, your 30-year mortgage will be paid down to about $98,000. The combination of price appreciation and mortgage amortization will increase your net equity to $298,000. That’s an amazing return on an investment of $40,000. And remember, you’ll also get the benefit of enjoying the property as a vacation home. 3. Enjoy Generous Tax Benefits Since your vacation home will be generating income, you’ll also be able to write off any expenses paid in connection with earning that revenue. Let’s say you rent out the home 25% of the year. The IRS will allow you to deduct about 25% of the carrying costs of the property against the income it generates. Expenses you can write off include mortgage interest, real estate taxes, property insurance, homeowner’s association dues, property maintenance, utility expenses, cleaning costs, supplies (for tenants), and management fees if you hire an outside service to manage the process. Still another expense is depreciation. The IRS will allow you to depreciate the value of the home (not including the land value) over roughly 30 years. Since depreciation is what’s known as a paper expense, it will reduce your tax liability without costing you any money. Of course, you can only apply depreciation to the business use of the home. If that’s 25%, you’ll only be able to depreciate 25% of the value of the house. Speaking of income taxes, when you decide to sell the home you’ll get the benefit of long-term capital gains tax rates. If your taxable income is $100,000, you’ll be in the 22% tax bracket for federal income tax purposes. But since the sale of the vacation home will be a long-term capital gain, you’ll

[ad_1] The post How Much Do Realtors Make? appeared first on Millennial Money. A growing number of people are looking into becoming Realtors with the hopes of cashing in on the rising home prices of today’s real estate market. But how much do Realtors make? Keep reading to find out how much you can expect to earn as a real estate agent. Table of contents What Is a Realtor? What is the average salary of a Realtor? Realtors vs. real estate brokers  Real Estate Agent Commissions How commissions are distributed  How Realtors get paid How to become a certified broker What is a listing agent? Is the housing market secure? Is commercial real estate better than residential real estate? The Bottom Line What Is a Realtor? To understand how much a Realtor makes, you first have to know the difference between a Realtor and a real estate agent.  In short, a Realtor is a trademarked term that refers to someone who is a member of the National Association of Realtors (NAR).  Not all real estate agents are Realtors. Further, the term Realtor applies to a wide variety of jobs like property managers, appraisers, and counselors. So you don’t have to actually broker deals to be a member of the NAR.  About half of the real estate agents in the U.S. are certified Realtors and abide by a Code of Ethics. This forces them to uphold a set of standards and 17 professional articles that govern how they’re allowed to act.  What is the average salary of a Realtor? According to Indeed, Realtors now make an average income of $84,074. However, pay typically varies year to year because it’s based heavily on performance and commissions. So if you have a great year in real estate and sell some million-dollar properties, you can significantly increase your earnings. Furthermore, according to the U.S. Bureau of Labor Statistics, the average real estate agent salary is around $49,000.  As you can see, the earning potential varies widely. It all comes down to how hard you work, your personality, your ability to close deals, and luck. Sometimes, deals will fall in your lap from referrals, while other times, you have to really push to get them done.  Home buyers and sellers can be difficult to work with. During your first year after getting a real estate license, you might not earn much, especially if you treat real estate as a part-time job. Real estate sales is not easy, and new agents often struggle to make a livable annual salary.  Total earnings also depend on the arrangement that a real estate agent has with their broker. Commissions are split between the seller’s agent and broker and the buyer’s agent and broker.  Additional benefits may come in several different areas. For example, Realtors may receive cell phone reimbursement, health insurance, a stock purchase plan, gym memberships, professional development assistance, and paid time off.  Realtors are also often allowed to work from home, saving money on gas and travel. This is a common benefit in the post-COVID economy.  Realtors vs. real estate brokers  It’s important to understand that as a Realtor you’re required to work either as a broker or with one.  Generally speaking, you can operate as an independent Realtor, which could mean higher commissions and more freedoms. However, this requires getting certified as an official broker and obtaining a license.  The more common approach is to work on behalf of a certified broker for either a small firm or a large organization. Both options have pros and cons. Working with a smaller broker can be more flexible, but you won’t have access to the same resources that large firms can provide.  Smaller firms also tend to be less organized and efficient in their processes. That can create problems during the fast-paced real estate process, when communication needs to happen quickly.  Working with a firm that doesn’t have its act together can slow you down and lead to lower commissions.  On the other hand, working with large national firms can be more restrictive, as you may need to follow specific policies even when they work against your interest. Another important thing to consider is, if you work for a brokerage firm, you have to be exclusive to that firm. You can’t get paid directly or go off and close deals on your own as an independent contractor.  RealtyMogul RealtyMogul is a leading real estate crowdfunding platform. It’s one of the longest-running and most widely respected platforms on the market. Start Investing in Real Estate Real Estate Agent Commissions Realtors are responsible for forming an agreement with their broker regarding real estate commission.  Most of the time, the commission is an even 50/50 split. However, highly talented and sought-after salespeople may be inclined to ask for more, depending on their ability and experience. At the same time, newer Realtors may have a hard time asking for an even split or more.  In many ways, success depends on how you deal with the broker. Don’t be afraid to command top dollar if you’re a successful Realtor or real estate agent. Remember that real estate is not for the timid. Ask for what you deserve, and don’t be afraid to shop around and compare different brokers if you don’t like the total commission package that you’re offered. It’s also important to be careful about signing any exclusive deals with a real estate brokerage firm unless you’re completely comfortable with the arrangement. Consider having an attorney look over the agreement and try to write in an exit plan so that you can terminate the agreement if you have to.  How commissions are distributed  As for the payment itself, this will be outlined in the listing agreement. This is essentially a contract between the listing broker and seller that outlines the exact terms of the real estate transaction.  The broker has the right to negotiate the commission. In most cases, commissions run in the 4% to 6% range, although this is not