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Being unsure whether to pay off your mortgage or not is a good problem to have. It means you have significant savings and have afforded yourself some choices. While the idea of being debt-free is appealing to many, there are also compelling reasons to keep your mortgage. Let’s explore both sides of the debate to help you make an informed decision.
Discussing finances with aging parents is never easy. As a result, many families simply delay these conversations or avoid them altogether. This can lead to unexpected financial surprises, misunderstandings, and even conflicts down the road.
By talking openly about money, you ensure both their future and yours are secure, prevent potential disputes, and help in planning for long-term care. Your goal in having this conversation is not just about understanding their financial situation but also about ensuring financial stability and facilitating smooth estate planning.
Parents who have accumulated wealth over the years may be resistant to the idea that they need help managing their money. It’s important to be mindful of your language and positioning. It’s not, “I need to know how much money you have.” Nor is it, “You shouldn’t do this by yourself.” There are more delicate ways to broach the subject, and we’ve outlined a few possible scenarios below:
The choice between buying and building a house hasn't become much easier in 2024. While the housing market has cooled off a bit this year, high building costs and interest rates are helping to support high home sale prices. According to Forbes, the average cost to build a new house is around $329,000 - not including the cost of land.
We can help you run some numbers on the money part. There’s a lot more that goes into a true "dream home" other than money, especially if you're thinking about living there through retirement. Discussing these three questions with your family can clarify what a home really means to you, and how the journey to your next home could impact your Return on Life (ROL).
A family might spend decades working and saving towards the goal of owning a vacation home. The memories made are priceless, but the personal, emotional, and financial costs of keeping that house in your family for generations can be very high and very painful without thorough planning.
Prepare a family retreat into your legacy plan and make sure you discuss these three points with your heirs, your attorney, your CPA, and your financial advisor.
Receiving an unexpected sum of money can be a welcome surprise, but deciding what to do with it can be a challenge. Should you save the money or pay down debt? Invest the funds or donate to charity?
While rushing to book a vacation with proceeds from a windfall may be tempting, it might be more rewarding to use the funds to shore up your finances for the long run. Here are five strategies to consider:
Spring is a time of renewal and rejuvenation, as the world awakens from its winter slumber and new life begins to bloom. As the saying goes, "April showers bring May flowers", and this sentiment can also apply to your financial life.
Just as the rain nourishes the soil and helps plants grow, taking the time to "spring-clean" your financial plan can help you grow and thrive in the months and years ahead.
Mortgage rates have been rising steeply since 2021 and are now commonly found in the neighborhood of 7%. This is significant as you might remember rates in 2021 were often below 3%. The run-up has cooled the housing market considerably. Now, lenders are having to get creative to drive new business. They’re offering more incentives to find new buyers and to undercut the competition. Let’s take a look at some of these strategies (gimmicks if you’re a pessimist), to help you and those you know make smart lending decisions.
Investing during market volatility can be like driving through a winter storm. Your best plan of action is to focus on what you can control and keep progressing towards your destination.
As the markets have continued to adjust to rising interest rates and inflation, you might think of your financial plan as a GPS system that you can rely on to keep you on track even when it's tough to see the path forward.
Here are five aspects of your financial plan that we recommend focusing on as we wait for this storm to pass … and prepare to weather the next one.
As summer heats up, it pays to take a good look at how flexible you are. When you plan for the future, you need to be adaptable. No one knows what tomorrow holds.
This is certainly true in the world of work. In just over a month from now we will celebrate Labor Day. In 1894 President Grover Cleveland signed Labor Day into law as a federal holiday to placate unions, following a bloody and tumultuous strike at the Pullman Co., which made railcars. Today, the break on the first Monday of September is less about labor and more about recreation, cookouts, and the mental end of summer.
To some, labor merely is about a job or the lack thereof. For others, the concept of labor transcends a job. It’s about a career, economic stability for self and family, satisfaction, fulfillment, success, and a sense of mission – a calling. Consider a young person attempting to think about a future of work that may span 50 to 60 years or more. How does one grasp a fast-changing world to formulate a job or career strategy, and an investment strategy to accumulate capital needed to fund their secure future?
Have you ever participated in one of those “future think” company planning sessions? You know, the one that asks where you want the company to be 5, 10, and 15 years from now?
A senior executive of a firm recalled the effort to formulate a five-year plan when he was in top management at a Fortune 500 company. When the plan was completed, the chief executive officer told her team, “If we execute this plan exactly as we have laid it out, in five years we will be out of business.”
Having deflated the egos of those who labored to produce a creative plan, she explained that the world and marketplace in five years would be totally different. If they did not change the plan as they went along, they would be left behind, becoming obsolete and less profitable.
We see examples in the stories of:
Microsoft, one of the glowing success stories of the last century, now competing with Apple and Google. Personal computer sales, the historical mainstay of Microsoft, have been eroding for years as users switch to smartphones and tablets. But Microsoft has adapted.
Canada’s Research in Motion was a global leader in wireless innovation, having revolutionized the mobile phone industry with the introduction of the BlackBerry in 1999. The company found itself on the ropes as the iPhone became the “must have.” Blackberry users went dark on January 2, 2022.
Sears for years was an appliance sales leader with its Kenmore brand. For a myriad of reasons, Home Depot, Lowe’s and a host of other competitors cut into Sears’ profits. In 2018, Sears filed for Chapter 11 bankruptcy protection and as recently as May 2022, announced the closing of about 100 stores. This store-closing-wave leaves about 750 Sears stores remaining – down from approximately 3,500 at its peak.
The message? Flexibility counts. Anticipating change counts, with Plan B or even C at the ready. A plan, whether a career plan, a financial plan, or a life transitions plan is a road map. Every road is subject to disruption, detours, potential dead ends and rabbit trails.
Yes, you want a concept of where you will be in one, five, ten years and beyond. But any plan must be dynamic, fluid, and adaptable. You cannot set it and forget it.
Every money manager has a turnover ratio, the average percentange of stocks sold every year. Stock buys may disappoint and underperform. Other stocks may reach a targeted sell point and be sold in favor of a better bargain.
Asset classes may underperform or outperform in the short run and then change direction. Assumptions may appear wrong near term, and turn out to be sound in the long run. Diversification is important, as crystal balls are fallible.
Everyone, whether a breadwinner, a stay-at-home parent, a retiree or an investor, should have a contingency plan to deal with personal setbacks, career reverses and market disruptions because stuff happens. Change is the only constant. Well, death and taxes are also. Have you reviewed your “what if?” plans lately?
Labor Day will signal that the fourth quarter is less than a month away. Have you reviewed next year’s tax strategy? Christmas and holiday promotions will be here before we know it. Have you started planning for next year?
Make your summer …and life plan flexible.
The housing market has been frustrating for buyers and a boon for sellers, but there are signs that those frustrations might be easing – depending on where you live.
Would-be buyers have struggled with historically low inventories, crazy bidding wars and now have to add rising mortgage rates to their worry list. Sellers on the other hand have been rejoicing as average housing prices continue to increase month-over-month and year-over-year, with average home prices jumping 15% in the last 12 months.
But sellers also face a dilemma: where do they go if they do in fact sell? And while there are signs that 2022 might see some cooling off, there are also signs that the relief will be too little – and maybe not at all in certain markets.
