“Regional and community banks currently account for a disproportionately large share of office real estate lending,” said Bloomberg economist Stuart Paul. “Further consolidation of the banking industry may prove to be the solution that allows the banking industry at-large to work out problem loans.” “Lots more price declines are coming,” warned Mark Zandi, chief economist … [Read more…]
The loss was the first of its kind ever recorded since the MBA began tracking loan production income in 2008.
The average $301 loss marked a major downturn compared to the previous leader, when mortgage lenders recorded an average profit of $2,339 per home during a record boom in US housing demand.
Mortgage lenders were impacted by a surge in loan rates that caused demand for purchase and refinance applications to plummet to their lowest level in decades, according to MBA vice president of industry analysis Marina Walsh.
“The stellar profits of the previous two years dissipated because of the confluence of declining volume, lower revenues, and higher costs per loan,” Walsh said in a statement.
Firms were unable to slash their expenses fast enough to offset the major drop in demand.
“Companies could not adjust their capacity fast enough,” Walsh added. “The number of production employees declined, but not at the same pace as origination volume. As a result, productivity in 2022 fell to a low of 1.5 closed loans a month per production employee.”
Mortgage demand hit a 25-year low last October as 30-year fixed loan rates topped 7%, pushing many prospective buyers and sellers to the sidelines.
Rates have since cooled slightly, though they are still running well above 6%.
Just 32% of firms active in the mortgage lending sector were profitable last year, according to MBA’s analysis.
That was down from 98% who turned a profit just two years earlier, during a pandemic-era housing boom.
The cost of mortgage lending ballooned to $10,624 per loan last year, outpacing gains in loan servicing.
The US housing market slowdown prompted waves of layoffs and reorganizations throughout the real estate sector.
In January, Wells Fargo, a bank that once had a dominant hold on the mortgage-lending sector, revealed that it would be paring back its mortgage business as conditions in the market deteriorate.
In another shakeup, Homepoint, one of the largest mortgage lenders in the US last year, revealed last week that it would be selling of its assets to The Loan Store.
“After careful consideration, and in light of current market conditions, we have decided to sell our wholesale originations business to The Loan Store,” said Willie Newman, president and CEO of Homepoint. “We believe this is the best decision for our company to continue to deliver value to Home Point shareholders.”
When future Basketball Hall of Famer LeBron James debuted in the NBA in 2003, he was an 18-year-old with the weight of enormous expectations on his shoulders. One example? Before even joining the league, he signed a $90 million shoe deal with Nike—a contract that was worth more than his rookie agreement with the Cleveland Cavaliers.
Legend has it that King James spent only $2,000 of the initial Nike windfall. Regardless of whether it’s true, it indicates a certain financial savvy James has maintained over the course of his storied, two-decade career.
Now worth north of a billion dollars, James has managed to build an impressive real estate portfolio. We’ve chronicled his many moves over the years and have always appreciated his taste for luxury properties.
As the ageless wonder continues his reign on the court in the 2023 NBA playoffs, he’s also shown serious property acumen off the court. Let’s take a look at James’ impressive real estate lineup.
Home, sweet home in Ohio
There’s plenty of evidence that James did spend more than $2,000 in 2003. We’re not sure if he dipped into his shoe-contract money or his Cavaliers loot, but he did plunk down $2.1 million on a property in his hometown of Akron, OH, two decades ago. The existing home on the property was razed so James could build a custom mansion.
The sprawling residence tops 30,000 square feet and has six bedrooms, 10 bathrooms, and six half-baths. Baller amenities are said to include a bowling alley, recording studio, and barbershop.
For a sense of the home’s massive scale and serious seclusion, check out this drone video:
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And before the huge house was completed in 2007, James purchased an adjoining 2,989-square-foot property for $425,000 in 2006. That five-bedroom home is now connected to the mansion via a long driveway.
Sojourn through the Sunshine State
After spurning the Cavaliers and taking his talents to Miami to form a superteam with the Heat, James needed a fabulous place in Florida.
He purchased a six-bedroom, waterfront mansion for $9 million in the Coconut Grove neighborhood in November 2010. He even snagged a bargain on the home, which had been listed for $11.9 million.
After four seasons and two rings with the Heat, James returned to Ohio, promising to deliver Cleveland a long-awaited championship.
James put his 16,000-square-foot Coconut Grove home back on the market in October 2014 for $17 million, a serious markup after four years.
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It was an ambitious gambit, but James wound up reducing the price to $15 million and eventually selling it in August 2015 for $13.4 million.
James’ former house changed hands again in 2021 for $12.75 million. It appears the mansion underwent a makeover and landed back on the market last month with a $21.9 million price tag. There’s no sign of James’ former presence, but the bay views are still sublime.
Brentwood, then Beverly Hills
In the midst of his second stint with the Cavs, James’ eyes wandered out West. In 2015, Cleveland fans were dismayed to learn he had picked up a six-bedroom mansion for $21 million in Los Angeles’ tony Brentwood neighborhood.
By this time, James had made his entertainment-industry ambitions clear, so the purchase of a home near Hollywood seemed logical—even if it left Cavs fans worried that he had one foot out the door again. But then he delivered the NBA Championship to Cleveland, in an improbable upset of the Golden State Warriors in 2016. The win guaranteed him lifetime cred with Ohioans.
However, in 2017—amid rumors of his intention to eventually join the Los Angeles Lakers—he purchased another home in Brentwood, this time for $23 million. The brand-new spec home featured eight bedrooms, marble floors, and walls of glass that open to the Southern California sun.
One year later, the rumors proved true and James signed on to rejuvenate the Lakers franchise. He was content with his pair of Brentwood homes. Then in 2020, the COVID-19 pandemic hit, the league shut down, and James went house hunting.
He wound up with a true trophy—a compound in Beverly Hills once owned by the creator of the soap operas “The Young and the Restless” and “The Bold and the Beautiful.” The prestigious property had been on the market for $39 million, but James sealed the deal for $36,750,000 that September.
The spread offers two detached guesthouses, a screening room, and million-dollar views.
At the time of his purchase, agents cited the property’s seclusion and size (2.5 acres) as huge advantages. It ticks the boxes of land, views, and privacy—a rare trifecta in this extremely wealthy enclave.
After buying the Beverly Hills home, James decided to unload one of his Brentwood properties. He put the house he purchased in 2015 back on the market in 2021 for $20.5 million, a little less than what he had paid. After a few months, it was sold for $19.6 million, a rare loss for an all-time winner.
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Last week I was in Athens, GA guest lecturing at the University of Georgia . I’m up there once a semester speaking with senior students who are about to graduate and go out into the “real” world. And while my agenda is to talk about credit reports, credit scores, and how the whole financial services system works, it usually ends up becoming a fairly lengthy Q&A session about how best to establish and build your credit. Here’s the deal…you have one chance to establish credit, that’s it. You can either do it the right way or the wrong way, but you can never have a mulligan. For those of you who’ve already built credit and managed it poorly (for whatever reason), you’re not going to have to build your credit; you’re going to have to re-build it. Here are some of the more common methods for each, and their pros and cons:
Opening A Secured Credit Card
A secured credit card is a legitimate credit card issued by a legitimate bank. You make a deposit at the bank and they will issue you a credit card with a credit limit equal to your deposit. Since you’ve essentially fully secured any purchases you’ll make with a cash deposit, banks are more willing to issue these cards to either new credit users or those who are trying to rebuild their credit. Additionally, you can open a secured card for as little as a $250 deposit, so it’s a nice option for people who have limited cash flow. Secured cards aren’t a good long-term option,however; the fees associated with these cards and the interest rates aren’t very good. But, you have to remember that you’re opening the card for a purpose and that purpose is to get something good on your credit reports. After a few years of paying the bills on time you may be able to convince the card issuer to convert the account to an unsecured credit card and refund your deposit. And because this is a credit building strategy, you’ll want to make sure you choose a card issuer who reports their secured card accounts to the credit reporting agencies. Otherwise, you’re just wasting your time.
Being Added as an Authorized User
An authorized user is someone who has been authorized to use a credit card issued to another person. Most of the time, parents will add their children to one of their existing credit cards, which allows them to have a card in their name but doesn’t convey any sort of liability for payment of the balance. The good news is that the account history is reported to the authorized user’s credit reports and can almost instantly establish them a solid credit history. This is my favorite option, as it really has no downside. I call the authorized user strategy “having a credit card with training wheels.” As long as the account is managed properly, then it’s a positive addition to your credit reports. And, this is a great option for consumers who have limited (or zero) cash flow or are already working hard to get out of debt. If the account is mismanaged by your parent (or spouse, as this is also common among spouses) then all you have to do is ask that your name be removed from the account and it will also be removed from your credit reports. In fact Experian, one of the major credit reporting agencies, will automatically remove the account history from the authorized user’s credit report if it becomes derogatory, “because an authorized user has no responsibility for repayment of the debt”, according to Rod Griffin, Experian’s Director of Public Education. “We will also remove the account at the request of the authorized user.” The good news for authorized users is that the FICO scoring system gives you full benefits for a properly managed authorized user account on your credit report, as long as you have a legitimate relationship with the primary cardholder. A few years ago, credit repair companies were trying to take advantage of the authorized user strategy to boost the credit scores of consumers who had bad credit. FICO figured out a way to filter out the consumers trying to game the system, so they won’t get the same benefit as a legitimate parent/child or husband/wife relationship.
Co-signing For a Loan
Co-signing for a loan is when you sign the promissory note (the promise to pay back the loan) and accept equal liability for payments on someone else’s loan. The newly opened loan will likely end up on your credit reports and will help you to establish or re-build your credit. Co-signed loans are normally auto loans, personal loans, or mortgages. That’s where the good news ends. I don’t like this option for three reasons:
1) It’s unnecessary. You don’t establish credit any faster by obligating yourself to a huge loan than you do by opening a $250 secured credit card. Choose the path of least resistance!
2) You can’t change your mind. There is no such thing as “co-signing for credit only” although some consumers have tried to challenge this in court, unsuccessfully. When you co-sign you’re just as liable for payments as anyone else on the loan. If the payments start being missed, it’s your problem. You have to be prepared to make all the payments if you choose this option.
3) Missed payments will go on your credit reports. If the payments on the loan are missed then anyone who has signed for the loan (yes, including you) will have a record of those missed payments reported on their credit reports. And, if the loan goes into default any aggressive collection actions, including litigation, it will be targeted at you. I’m not a fan of co-signing for a loan EVER, unless you need two incomes to qualify for a mortgage.
John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.
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Do you enjoy spending your hours at work in the office, or do you like to be outside? Do you find it fun and exciting when a deal is done, or are deals just more busy work for your day?
If any of those questions have got stuck on repeat in your head, then these real estate investment trusts might be a good career path for you.
The short answer: Real estate investment opportunities are plentiful and they come with varying degrees of risk and reward depending on what you’re looking for.
I know from experience that real estate investment trusts can be a good career path.
So if real estate investing sounds like something that might be right up your alley, keep reading!
What are Real Estate Investment Trusts?
Real Estate Investment Trusts, or REITs, are a type of investment that receive tax concessions from the government. This is because they are designed to promote the development and growth of the real estate industry.
Investors can put their money into diverse projects, such as hospitals, schools, warehouses, and hotels.
In addition, REITs are publicly traded companies that buy, sell, and operate cash flow-producing commercial real estate. There are some privately traded REITs as well.
Why REITs as an Investment?
REITs have many investors who make up their stock portfolio. These can be individuals such as retail investors like you and me or other businesses.
What’s more, is that REITs are trusts similar to mutual funds which offer stability for both short-term and long-term investments in property assets.
Finally, REITs offer investors a reasonable return on investment.
What are the different types of real estate investment trusts (REITs)?
Real estate investment trusts, or REITs, are a type of security that allows people to invest in real estate without actually having to own any property. They are similar to mutual funds, with the exception of their working procedure.
There are two major types of REIT: equity and mortgage. Each type has its own specific benefits and drawbacks.
Equity REITs
Equity REITs are the most common type of REIT and they generate their revenue primarily through rents, not by reselling properties. This makes them a relatively stable investment option and they are often used as a way to diversify an investor’s portfolio.
Mortgage REITs
Mortgage REITs are a type of real estate investment trust (REIT) that invests in mortgage-backed securities. They are similar to other types of REITs, but they tend to have a higher yield as they earn their income from the interest margin on the mortgages they own.
This makes them potentially sensitive to interest rate increases as it could reduce the spread between what they earn on loans and what they pay out in funding costs.
Hybrid REITs
Hybrid REITs use a combination of the two strategies. They own properties like equity REITS and use the money from investors to purchase mortgages like mortgage REITs.
How to Buy Real Estate Investment Trust
Real estate investment trusts, or REITs, are a type of security that allows investors to purchase shares in a company that owns and manages income-producing real estate.
There are three types of REITs: publicly traded, public non-traded, and private.
Publicly traded REITs are the most common and are listed on major stock exchanges. They offer liquidity and transparency but also come with higher risk.
Public non-traded REITs are not listed on exchanges but offer more liquidity than private REITs.
Private REITs are not available to the general public and have less liquidity than both publicly traded and public non-traded REITs. Private REITs can be sold only to institutional or accredited investors.
Pros and Cons of Investing in Real Estate Investment Trusts
When it comes to making money, real estate is always a sound investment. And with the popularity of real estate investment trusts (REITs), you no longer have to be a landlord or developer to invest in properties.
REITs are becoming increasingly popular because they offer investors diversification and liquidity- two key features that any good investment should have.
But like anything else, there are pros and cons to investing in REITs. Here are some things you should consider before you put your money into this type of trust:
Pros of REITs:
1) Diversification: Real estate is a very diverse asset class, and by investing in a REIT, you’re automatically spreading your risk across many different properties. This helps reduce the volatility associated with stock market fluctuations.
2) Liquidity: A key advantage of REITs is that they’re highly liquid- meaning you can sell your shares at any time without penalty. This gives you the freedom to take profits when the market is doing well or reinvest them when prices are down.
3) Professional Management: When you invest in a REIT, you’re essentially hiring professional property developers and managers to do all the hard work for you. This takes away the hassle of dealing with tenants, repairs, and other day-to-day tasks associated with owning property.
Cons on REITs:
1) No Say in Management: Unlike directly owning property, you have no say in how the REIT is managed. If you don’t agree with the way the managers are running things, there’s not much you can do about it.
2) Taxation: The tax laws surrounding REITs are a bit complicated, so make sure you consult an accountant before investing. In general, taxation is much easier than owning the property yourself, but it’s still something to keep in mind.
3) Fluctuating Values: Just like stocks, real estate prices can go up and down quickly. So if you’re looking for a stable investment that will always give you a return on your money, REITs might not be right for you.
How successful are real estate investors?
Real estate investment is a popular way to make money, but it’s not without its risks.
Those who are successful in this field often have a lot of money or access to money (private money, hard money, bank financing, self-directed IRA).
It can be a career if you’re willing to put in the work, but it’s important to think carefully before making that decision.
Real Estate Career Path
Many different real estate jobs offer high salaries and great opportunities for career growth. Plus you can match your experience to find the best real estate career path.
These jobs offer a variety of opportunities and allow you to work in a wide range of settings.
What are the Requirements of Managing a REITs?
Real estate investment trusts, or REITs, are a type of mutual fund that allow both big and small investors to pool their money together and invest in real estate. REITs offer a variety of benefits to investors, including an opportunity for capital appreciation as well as a strong income stream.
In order to qualify as a REIT, they must be registered with the SEC and meet certain other requirements.
1. Managed by Board of Directors or Trustees
In order to be a REIT, the company has to appoint a board of directors or trustees. The board is responsible for making sure the REITs comply with the regulations set by law and also exercise their fiduciary duties. Furthermore, the board approves important decisions such as changes in investment strategies, acquisitions, and dispositions.
2. Taxable Income Paid to Investors
One of the key requirements for managing a REITs is paying out at least 90% of its taxable income to the investors. This leaves limited room for the manager to use the REITs’ income for their own benefit and also minimizes taxes. As a result, it is crucial that a REITs manager has a strong understanding of tax laws and can effectively communicate with the investors.
3. Gross Income Generated from Real Estate Investments
In order to be a REIT, an organization’s income must come from at least 75% of its total assets in real estate. The other 25% may be invested in cash, securities, and other assets. This allows the company to grow without having to worry about being classified as a security corporation.
4. Number of Shareholders or Investors
Another requirement for managing a REIT is that there must be at least 100 investors and shareholders. In addition, no one shareholder can hold more than 50% of the shares (at least). This protects the interest of all shareholders and ensures that no one person or entity can control the REIT.
How to get started in the real estate investment trusts industry
There are many different ways to get started in the real estate investment trusts industry.
There is no one-size-fits-all answer when it comes to starting a career in this field. Every individual has their own strengths and weaknesses that they need to take into account.
One way is to start as an intern or apprentice and then work your way up the ladder.
You could get your business degree and find a career in REITs.
Another option is to become a real estate agent and specialize in commercial real estate.
There are many online courses and programs that can teach you about the industry, and there are also many books on the subject.
Whatever route you decide to take, remember that it’s important to do your research and learn as much as you can about the real estate investment trusts industry before jumping in headfirst.
How to Get Started as an Investor in the Real Estate Investment Trust industry
Real estate investment trusts, or REITs, can be a great way to invest in property and achieve your financial goals. However, in order to be successful, you will need cash to be able to invest in the REIT.
In addition, the cash must not be needed in the recent timeframe.
My favorite REIT platforms are:
What skills do you need to be successful in real estate investment trusts?
This section is specifically for those wanting to know… is real estate investment trusts a good career path?
First and foremost, you will need to have a degree in finance or another relevant discipline. This qualification will give you the basic analytical skills required for success.
In addition, experience in real estate is essential; it is one of the most complex and fast-paced industries around.
You will also need strong marketing skills. REITs are all about generating income through rent or capital gains, so you need to know how to market properties effectively.
Finally, good communication and people skills are important too; after all, you’ll be dealing with clients and tenants on a regular basis.
If you possess these skills, then real estate investment trusts could be the perfect career path for you!
In fact, if you keep using these good excuses to miss work, then a job change is probably needed.
The future of the real estate investment trusts industry
The real estate investment trusts (REITs) industry is rapidly growing and changing. In fact, REITS account for 2.9 million direct jobs (source).
As the world progresses, so does this industry, with new opportunities and challenges arising constantly. REITs offer a unique career path for those who are passionate about real estate and interested in making money.
Money should not be an issue in this sector, as REITs offer a rewarding career path for those who are willing to invest in it.
Check out the best paying jobs in real estate investment trusts.
Career Options within REITs
REITs offer the opportunity to be paid as an investor or career within the industry. Pay can vary depending on the company and its structure; however, most companies within this sector pay well.
If you work for a REIT, you can learn about investing in the real estate industry by being a part of it–an invaluable experience if you’re looking to invest personally into real estate yourself one day.
As the industry grows, so does the need for new people to enter it; companies are constantly looking for new people. In fact, they typically add 555,000 jobs per month (source).
Within the real estate investment trusts industry, there are various career paths that one can take.
Acquisitions
One common job within the REIT industry is acquisitions; which involves buying or selling real estate assets. This position requires a good understanding of the market and the ability to make quick decisions.
Analysts
In the real estate investment trusts (REITs) industry, analysts typically start out earning a salary of around $80,000 per year. With experience, they can move up to a management or executive role and earn a six-figure salary. Additionally, there are many opportunities for career growth in the REITs industry as it continues to grow.
Property Developer
In the real estate investment trusts (REITs) industry, the developers are the team responsible for building new projects from scratch. They identify potential investments, obtain the necessary permits and funding, and manage construction until completion.
This is an important role in the REITs industry as it drives expansion and innovation.
Property Managers
Property managers are famous for getting things done, and they are essential members of any REIT team.
There is no standard education background necessary for becoming a property manager; however, you need skills in project management and construction management.
Real Estate Agents
Agents typically earn more in commissions than their peers working in traditional real estate brokerages, making this a lucrative career path to consider.
Which real estate career makes the most money?
Real estate is a great way to invest and grow your money.
There are a variety of different ways to get involved in real estate, but one of the most popular ways is through real estate investment trusts (REITs).
REITs allow you to invest in a portfolio of properties without having to go out and find them yourself. This can be a great way to get started in real estate investing and build your wealth over time without day-to-day management.
Turn to Real Estate Career Pathway
Real estate investment trusts (REITs) are a good career pathway if you want to come up with better investment strategies. They can provide opportunities to learn about the market, make contacts and develop skills. However, it is important that you reflect on what skills you have, your resources, and where you align before entering this field.
There is a lot to consider when making the decision whether or not to pursue a career in real estate.
It is important to do your research, reach out to people in the industry, and reflect on what you’ve learned. Only then can you make an informed decision about your future.
It ultimately comes down to what you want and what you’re willing to do.
If real estate is your passion, then go for it!
But make sure you do your research and understand the risks involved. There’s no right or wrong answer, but be sure to weigh all of your options before making a decision.
Know someone else that needs this, too? Then, please share!!
Investment advisors help investors figure out their goals, create financial plans, and put those plans into action. There are a lot of them out there, too, meaning that finding the right professional for you or your family may seem daunting. But finding the best investment advisor for you can be a fairly painless process.
You’ll need to start with some basics, though, by learning the difference between an investment advisor and a registered investment advisor, what to look for when you hire an advisor, and more.
What Is an Investment Advisor?
An investment advisor is an individual or company that offers advice on investments for a fee. The term itself — “investment advisor” — is a legal term that appears in the Investment Advisers Act of 1940. It may be spelled either “advisor” or “adviser.”
Investment advisors might also be known as asset managers, investment counselors, investment managers, portfolio managers, or wealth managers. Investment advisor representatives are people who work for and offer advice on behalf of registered investment advisors (RIAs).
What Is a Registered Investment Advisor (RIA)?
A registered investment advisor, or RIA, is a financial firm that advises clients about investing in securities, and is registered with the Securities and Exchange Commission (SEC), or other financial regulator. While you may think of RIAs as people, an RIA is actually a company, and an investment advisor representative (IAR) is a financial professional who works for the RIA.
That said, an RIA might be a large financial planning firm, or it could be a single financial professional operating their own RIA.
An RIA has a fiduciary duty to its clients, which means they must put their clients’ interests above their own. The SEC describes this as “undivided loyalty.” This is different from non-RIA companies whose advisors are often held only to a suitability standard, meaning their recommendations must be suitable for a client’s situation. Under a suitability standard, an advisor might sell a client products that are suitable for their portfolio but which also result in a sales commission for the advisor.
RIAs generally offer a range of investment advice, from your portfolio mix to your retirement and estate planning.
What’s Required to Become a Registered Investment Advisor?
The following steps are required to become a registered investment advisor (RIA).
• Pass the Series 65 exam, or the Uniform Investment Adviser Law Exam, which is administered by the Financial Industry Regulatory Authority (FINRA). Some states waive the requirement for this exam if applicants already hold an advanced certification like the CFP® (CERTIFIED FINANCIAL PLANNER™) or CFA (Chartered Financial Analyst).
• Register with the state or SEC. If an RIA has $100 million in assets under management (AUM), they must register with the SEC — though there are sometimes exceptions to this requirement. If they hold less in AUM, they must register with the state of their principal place of business. This requires filing Form ADV.
• Set up the business. These steps require making a variety of decisions about company legal structure, compliance, logistics and operations, insurance, and policies and procedures.
How to Choose an Investment Advisor
Finding the right investment advisor is about finding the right fit for you. While personal preference plays a part, there are a variety of other things you might consider when you’re searching:
Start Local
Look to helpful databases of financial professionals that can help you pinpoint some advisors in your area. Here are a few to consider:
• Financial Planning Association. Advisors in this network are CERTIFIED FINANCIAL PLANNERS™ (CFP®s) and you can search by location, area of specialty, how they’re paid and any asset minimums that may exist.
• National Association of Personal Financial Advisors. All advisors in this database are fee-only financial planners, meaning they receive no commissions for selling products.
• Garrett Planning Network. All advisors in this network charge hourly.
Get Referrals
One of the best ways to find a financial professional is to ask friends, family, and acquaintances if they’ve worked with someone they can recommend. While there are ways to build wealth at any age, it may be beneficial to ask people who are in a similar financial situation or stage of life. For instance, if you’re relatively young with a lot of debt and very little savings, you may not want the same investment advisor who’s working with wealthy retirees.
Ask About Credentials
Ask investment advisors what certifications they have, what was required to get the certification, and whether any ongoing education is necessary to keep it. Some certifications require thousands of hours of professional experience or passing a rigorous exam, while others may only require a few hours of classroom time.
Other certifications are geared toward investors at a specific life stage or with specific questions. The Retirement Income Certified Professional (RIPC) certification, for instance, focuses on retirement financial planning. Those with a Certified Public Accountant (CPA) certification are probably good sources for tax planning.
Check Complaint History
Depending on who oversees the advisor or the firm, you should be able to check whether there are complaints on record. If FINRA provides oversight, you can research them on FINRA’s BrokerCheck tool. If the SEC oversees them, the SEC has an investment advisor search feature to find information on the advisor and the company. Remember: One complaint might not be a red flag, but multiple complaints might give you pause.
Find Out About Fees
Investment advisors may be paid, or charge fees, several different ways. They may charge a percentage of assets under management, meaning that the fee will depend on the assets they’re managing for you. For example, if the fee is 1% of assets under management and you’re having them manage $500,000, you’d pay $5,000 annually for their services.
Others may charge an hourly fee or a flat project fee for specific services. There are also advisors that are paid commissions from the products that they sell to clients. It’s important to understand how an investment advisor makes money and how much you’ll pay in fees each year, and then decide what you’re comfortable with.
Get Details on Their Work Style
Communication and working style may be just as important as credentials and expertise. For instance, how often do they want to meet with you? Would you be working with them directly or with a wider team of people? Do they like to communicate via phone call, email, or text? This is something else to consider.
Take a Test Drive
Many advisors will offer a phone consultation or in-person visit to see if you’re a good fit. You may want to take them up on it. Finding the right investment advisor is as much a matter of chemistry as credentials.
Questions to Ask an Investment Advisor Before Hiring Them
It can be a good idea to find out as much as possible about an investment advisor so you can make an informed decision. Here’s a list of questions you might want to ask:
• What are your qualifications?
• What type of clients do you typically work with?
• Are you a fiduciary?
• How are you paid? And how much will I be charged?
• Do you have any minimum asset requirements?
• Will you work with me, or will members of your team work with me?
• How (and how often) do you prefer to communicate? (Phone, email, text?)
• How often will we meet?
• What’s your investment philosophy?
• What services do you provide for your clients?
• How do you quantify success?
• Why would your clients say they like working with you?
The Takeaway
An investment advisor can help you think about investing for the future, plan to save enough for all your goals, and understand how to get it all done. Finding one isn’t hard, but it does take time and some research to connect with an investment advisor that meets your expectations and feels like a good match.
With that in mind, getting the right advice can be critical even before you start investing. Someone with experience in the markets helping guide you can be invaluable.
Ready to invest in your goals? It’s easy to get started when you open an Active Invest account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
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SoFi Invest® The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results. Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below. 1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
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Can This SEC Rule Protect Your Crypto or Art Investments From Bankruptcy? | SmartAsset.com
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Your broker cannot use the funds in your portfolio. Not legally, at least.
While seemingly intuitive, this requirement comes from an SEC regulation known as “the custody rule.” It requires that all investment advisors and similarly-situated entities keep client securities and funds safe while those assets are in the advisor’s possession. Essentially, if you have an account with an investment advisor, trader or broker, the person has to keep your assets separate and apart from his own. The financial advisor can’t comingle your money with his or tap into it for the firm’s use.
The purpose of the custody rule is to protect client assets against adverse events like theft, misappropriation and bankruptcy. For example, a brokerage cannot use client assets to make its own investments, putting that money at risk if the investments go poorly. Nor can it use client money as operating funds, putting that money at risk if the firm goes out of business.
Recently, as investigators have picked through the wreckage of former cryptocurrency exchange FTX, they have found evidence of exactly the kind of theft and comingling that the custody rule is designed to prevent. This has prompted a reevaluation of the rules surrounding cryptocurrency and similarly situated assets.
Among the results is a proposed SEC regulation that would dramatically expand the scope of the custody rule.
For help managing your investments and understanding the implications of this new rule, consider matching for free with a vetted financial advisor.
What Is the Safeguarding Rule?
The new rule would be called the safeguarding rule, an updated and amended version of the existing custody rule. Most significantly, it broadens the scope of the custody rule to include far more assets than currently contemplated. As the SEC explains, the new rule would apply to “funds, securities, or other positions held in a client’s account and would include all other assets that investment advisers custody for their clients. The safeguarding rule would also explicitly include an adviser’s discretionary authority to trade client assets within the definition of custody.”
As the law firm Skadden Arps explains in a brief on the subject, this will give the custody rule a broad mandate. It will effectively, they write, apply to all assets of just about any kind held by a regulated entity. This would include “cryptocurrencies and other digital assets, contracts held for investment purposes, collateral posted in connection with a swap contract and physical assets, including real estate, artwork, precious metals and physical commodities, as well as ‘other positions’ that may not be recorded on a balance sheet as an asset (e.g., short positions and written options).”
In a small, but critical, detail the SEC has also stated that the term “assets” as it applies to the new rule will remain “evergreen.” This means that the agency intends for the updated safeguarding rule to automatically encompass new categories of investments and assets as they emerge without requiring a specific update. If a regulated entity holds some thing of value on behalf of a client, or if it has the authority to trade a given asset, the new safeguarding rule will apply.This is intended to address the issues created by cryptocurrency, where companies have evaded regulation for years by simultaneously insisting that crypto assets are both a great investment and securities subject to regulation.
What Does The Safeguarding Rule Mean For Investors and Customers?
For investors and customers, this means that advisors must keep many more assets safe.
When the custody rule applies, firms have to hold assets with third parties known as a “qualified custodian.” Generally this means that they have to put your assets on account someplace trusted, like a regulated depository bank or a brokerage. The idea is to make sure that a firm can’t do more or less exactly what FTX did, reaching for client assets whenever it needs capital or wants to make an investment.
Firms already need to do that with regulated securities and cash. Now, if SEC’s proposed rule goes forward, firms will also have to place virtually all assets with a trusted custodian. For example, if you place art, wine or valuable collectibles on account, they will need to make sure those assets are held by a trusted custodian.
The same will be true of cryptocurrency. All exchanges subject to SEC oversight will have to keep client assets separate, held by trusted custodians. This will dramatically change the way that much of the industry operates, as it is common for cryptocurrency exchanges to keep client assets comingled with the firm’s own assets and funds.
Firms will also need to insure the newly-covered assets, or at least to certify that their custodian carries insurance, so that clients are made whole if their assets are lost anyway.
To get a sense of the scope of this proposed rule, it’s worthwhile to consider the scope of losses due to failed and careless cryptocurrency exchanges over the years. Clients with FTX alone lost more than $1 billion when the firm went out of business. If properly applied, the new safeguarding rule would have prevented those assets from being placed at risk by denying FTX access to them and, failing that, clients would have been insured against those losses.
This isn’t the only example of a cryptocurrency exchange mishandling client funds. Investors have lost hundreds of millions of dollars due to exchanges going out of business, mismanaging their funds and (in some cases) simply misplacing critical security keys.
What’s Next For the Safeguarding Rule?
On May 8, comments closed for the safeguarding rule. This means that the SEC has gone through the process of soliciting public feedback on their proposed regulation. The agency will now review this feedback, making any updates to the proposed rule as it feels necessary. After that, assuming that no significant changes occur, it will likely pass the new rule.
Bottom Line
The SEC has proposed a new regulation called the safeguarding rule. It will require investors, broker and other regulated entities to keep all client assets safe in separate, insured accounts. While this will apply broadly, it will particularly change how many cryptocurrency exchanges do business.
Eric Reed
Eric Reed is a freelance journalist who specializes in economics, policy and global issues, with substantial coverage of finance and personal finance. He has contributed to outlets including The Street, CNBC, Glassdoor and Consumer Reports. Eric’s work focuses on the human impact of abstract issues, emphasizing analytical journalism that helps readers more fully understand their world and their money. He has reported from more than a dozen countries, with datelines that include Sao Paolo, Brazil; Phnom Penh, Cambodia; and Athens, Greece. A former attorney, before becoming a journalist Eric worked in securities litigation and white collar criminal defense with a pro bono specialty in human trafficking issues. He graduated from the University of Michigan Law School and can be found any given Saturday in the fall cheering on his Wolverines.
Demand for mortgage loans increased for the first time in six weeks, ahead of the Federal Reserve’s meeting on Wednesday, when observers expect at least another 75 basis points hike to the federal funds rate.
According to the Mortgage Bankers Association (MBA), the market composite index, a measure of mortgage loan application volume, increased 3.8% for the week ending Sep. 16, compared to the previous week. It was also down 64.3% compared to the same week in 2021.
The refinance index gained 10.3% from the previous week but fell 82.6% from the same week in 2021. Meanwhile, according to the MBA, the purchase index was up 1% from the previous week and decreased 29.5% from the same week in 2021.
“As with the swings in rates and other uncertainties around the housing market and broader economy, mortgage applications increased for the first time in six weeks but remained well below last year’s levels,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting, in a statement. “The weekly gain in applications, despite higher rates, underscores the overall volatility right now as well as Labor Day-adjusted results the prior week.”
Due to the Federal Reserve’s rate hike of 75 basis points on July 27 to combat persistent inflation, and the expectation of another sizable increase this week, mortgage rates are in the mid 6% range.
The latest weekly survey data fromFreddie Mac shows the 30-year fixed-rate mortgage rose to an average of 6.02% this week past week. A year ago, rates averaged 2.86%.
How will non-QM perform for the rest of 2022?
With inflation and rising rates, non-QM lending has spent the last few months in choppy waters, with some lenders closing their doors. However, the outlook for non-QM for the rest of 2022 is relatively optimistic, according to Acra Lending CEO Keith Lind.
Presented by: Acra Lending
MBA’s estimate, however, indicated the average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) rose to 6.25%, from the previous week’s 6.01%. Jumbo mortgage loans (greater than $647,200) increased to 5.79% from 5.56% in the same period.
“Treasury yields continued to climb higher last week in anticipation of the Federal Reserve’s September meeting, where it is expected that they will announce – in their efforts to slow inflation – another sizable short-term rate hike,” Kan said. “Mortgage rates followed suit last week, increasing across the board, with the 30-year fixed rate jumping 24 basis points to 6.25% – the highest since October 2008.”
The MBA data shows the refinance share of all mortgage activity rose to 32.5% of total applications this week from the previous week’s 30.2%.
The Federal Housing Administration’s (FHA) share of total applications fell marginally to 13.3% from the previous week’s 13.4%. The Veterans Affairs’s (VA) share of applications decreased to 10.9%, from 11.3%, and the United States Department of Agriculture’s (USDA) share went from 0.7% to 0.6%.
The share of adjustable-rate mortgages (ARM) applications remained unchanged at 9.1% this week. According to the MBA, the average interest rate for a 5/1 ARM increased to 5.14% from 4.83% a week prior.
The survey, conducted weekly since 1990, covers 75% of all U.S. retail, residential mortgage applications.
Despite a marked improvement from the fourth quarter of 2022, independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks still lost a mountain of money in the first quarter.
On average, IMBs reported a net loss of $1,972 on each loan originated from January to March, a 35% improvement from the reported loss of $2,812 per loan in the fourth quarter of 2022, according to the Mortgage Bankers Association(MBA).
A net production loss of 68 basis points in the first quarter is a sober reminder that conditions remain extraordinarily challenging for the industry, even if losses narrowed from the record 99 bps loss recorded in Q4.
The industry has experienced four consecutive quarters of production losses and nine consecutive quarters of volume declines, according to Marina Walsh, the MBA’s vice president of industry analysis.
The average production volume was $398 million per company in the first quarter, down from $436 million per company in the fourth quarter of 2022. The volume by count per company averaged 1,264 loans, a drop from 1,395 loans during the same period.
All in all, including both the production and servicing business lines, 32% of companies were profitable in Q1, up from 25% in the last quarter of 2022.
Another silver lining for IMBs was improved production revenue of 40 bps in the first quarter from the previous quarter.
However, costs continued to escalate with the further drop in volume and reached a study high of $13,171 per loan despite substantial personnel reductions, Walsh noted.
Loan production expenses averaged $7,172 per loan from the third quarter of 2008 to the last quarter of 2022. The average number of production employees per company also declined to 374 between January and March from 413 from the previous quarter.
Servicing operating income — which excludes MSR amortization, gains or loss in the valuation of servicing rights net of hedging gains or losses, and gains or losses on the bulk sale of MSRs — slightly declined to $102 per loan in the first quarter from the previous quarter’s $104.
The sale of MSRs does not directly impact earnings as a revenue stream, but the conversion of MSRs into cash via sales deals bolsters a lender’s cash flow and overall liquidity.
It’s not all bad news, however. The MBA expects mortgage origination volume for one- to four-family homes to post $461 billion in Q2, a rise from $333 billion in Q1 2023, according to its latest forecast.
The MBA also projected the 30-year fixed mortgage rate to trend down to an average of 6.2% in the second quarter, ultimately declining to 5.5% by the fourth quarter of 2023.
In the past nine months I’ve found $12.89 in singles and specie. The cash has shown up in a number of places, but most of it is from coins I picked up.
As usual, I’ll squirrel away the found funds until Thanksgiving, at which time I’ll write a check to a food bank. I’ve been doing this for a couple of decades, including a span of several years during which I had neither a vessel into which to urinate nor a casement through which to dispose of it.
This was a painless way to help others at a time when I worried nonstop about my own ability to stay afloat. Giving to others got me out of my own head, reminding me that plenty of people lived with considerably fewer resources (financial, emotional, practical) than I had.
It also reminded me that despite my fears I actually did have enough to get by. In fact, I had so much enough that I could afford to share a little with others. What richness!
Maybe you’re in a tight spot of your own, or maybe your paycheck covers the basics without much left over. But writing a check isn’t the only way to give. Our time, our talents and even our frugal hacks can make a difference in the world.
The Ultimate Social Network Why give? Because there’s need — and because it’s as good for you as it is for the people to whom you contribute.
Helping others connects us with the bigger picture, i.e., life outside our own little circles of circumstance. Giving is the ultimate social network, because it connects us with the wider world vs. the virtual one.
Suppose you spent an hour driving a veteran to the doctor and back. For you it would be an hour you could spare. For the vet you drove, it would be a lifeline.
Note: You shouldn’t give anything — even your time — if it endangers your equilibrium or your budget. A single parent with one and a half jobs already has enough on his or her plate, and you should chase the wolf away from your own door before you pick a name off the Angel Tree.
The following tips are not one-size-fits-all. For example, maybe you:
Live in a high-rise and don’t know your neighbors.
Aren’t the kind of person who would ever pick up recyclables.
Can’t donate blood for medical reasons.
But surely one of these suggestions will resonate. And if not? Share your own ideas in the comment section.
“Used,” but still useful
Charity thrift shops. Goodwill and others can use clothing, housewares, books and maybe even furniture. However, keep in mind that the stuff you think “still has some use left in it” might not be saleable. Get a receipt in case this is the year you itemize; see “Getting the most from your charitable deductions” for specifics.
The Freecycle Network. Not all chapters are created equal, but I’ve had tremendous success with people coming to get stuff I no longer need.
Got books? This American Library Association fact sheet offers information on libraries that accept donated materials.
Got children’s books? Ask if you can leave your kids’ outgrown titles in the waiting room at a public health clinic or social service agency.
Periodical sharing. When you finish with magazines, ask if it’s OK to leave them at laundromats, job-source organizations or other places adults tend to sit and wait. Cut the mailing label off the front of the mag; it doesn’t hurt to be wary even though identity theft is generally more high-tech than that.
Rags that rock. Before tossing worn-out towels or blankets, see if pet rescue groups could use them.
Holidays for kids. This doesn’t have to cost a bundle. Shop the Black Friday or pre-Black Friday sales, or the loss leaders during the holiday season. If experience has shown you which stores have the best stuff, shave off a few more bucks by paying with a discounted gift card.
Holidays for adults. Social service agencies or places of worship will likely let you know who’s in need. Shop the same sales as noted in “gifts for kids,” above, and also watch daily deal sites like My Bargain Buddy and Dealnews.com.
Clothing drives. Got a second coat, a like-new hat, an extra scarf? If you’re in a cold climate a collection box is waiting somewhere. When I lived in Alaska I carried extra hats, scarves and mittens in the trunk of my car, in case I met a homeless person who needed them. (And I did.)
Pro bono es bueno. Lawyers and doctors aren’t the only ones who donate their time, incidentally. Whether it’s social media savvy or landscape architecture, your skills might be needed by a town landmark, a group home, an elementary school.
Helping hands. Not everyone has an in-demand skill, but just about any of us can stuff envelopes or help clean up after a PTA meeting.
Teach a class. Take stock of what you know well — web design, cake decorating, Excel spreadsheets? — and offer that knowledge to others through a club, afterschool program, fraternal organization or place of worship.
Be a youth-group leader. This is a huge time commitment, and some people (including me) aren’t nuts about certain organizations’ policies on gays and lesbians. But if you can find a match — scouting, 4-H, youth sports, Sunday school — your help is needed.
Mentoring. Big Brothers/Big Sisters is the group people most often choose, but other options exist. Maybe your place of worship has a way to match kids in need with caring adults. Perhaps a professional organization arranges job-shadows for teens interested in your industry. A recent college graduate in your field might need advice and/or networking.
Yard work. Got an elderly or chronically ill neighbor who can’t manage snow, leaves or lawn? Step up.
Give blood. If the bloodmobile comes to the workplace, well, score: You get a break from the job plus juice and cookies! If not, look for blood drives. Donation doesn’t take very long and it’s a literal lifesaver.
Frugal-hack giving
Use your coupon powers for good. By combining sale prices, coupons and instant store rebates, you can pay nothing or next to nothing for toiletries, cleaning products and food items. I’ve donated numerous bags of these things to a shelter and a couple of emergency pantries.
Coupon powers, part 2. Michael’s and Jo-Ann’s have dollar sections and they run “50% off any non-clearance item” coupons in their Sunday ads. Thus I pay 50 cents for knitted gloves that aren’t good to 30 below but do keep out the chill. Shelters can use these.
Clearance tables rule! Speaking of gloves: I found them priced at two pairs for 33 cents a couple of late-winters ago. (I bought 100 pairs to give away.) Clearance tables can also yield gifts for next year’s holiday donations.
Recycle for credit. Trade in spent ink cartridges for store credit at Office Max, Office Depot and Staples, then buy school supplies to donate. Deliver office supplies to your favorite local nonprofit. Drop off teabags or coffee filters at the senior center. (Cartridge trade-in policies vary, so be clear on the rules before you do this.)
Recycle for cash. If you walk for exercise, carry a bag and pick up cans and bottles along the way. Give the money you earn to your favorite cause.
Plant a little extra. If you have one zucchini plant you have enough; if you have two, you have enough to share. Seriously: Put a few extra seeds in the ground and donate extra produce to food bank or soup kitchen.
Calendar creep. Do charities send you calendars, greeting cards and notepads? Offer calendars to teachers (animal-themed ones are a big hit with younger kids), group homes, senior centers or nonprofits, or bundle up the cards and notepads and donate them to charity thrift shops.
A non-pay phone. Got a plan with unlimited minutes? Maybe someone in a veterans’ or long-term-care home wants to call family or friends but can’t afford it. Ask a social worker if you can temporarily donate your phone on a weekend afternoon.
House-caring hack. Next time someone offers you $50 to pick up the mail and feed the cat for a week, make a counter-offer: You’ll do those chores if he or she will make a donation to the charity of your choice. If you’re a cynic, just accept the money and donate it yourself.
Readers: How do you give on a budget — or for free?