Multifamily construction starts fell to less than half of typical recent norms during the second quarter and will likely cause rents to rise over the next two years, a report said.
New starts slowed to 30,800 in 15 core markets across the U.S., according to commercial real estate services firm Institutional Property Advisors, a division of Marcus & Millichap. The number came in 52% lower than the quarterly average of 64,200 based on the previous nine quarters dating back to early 2021. Second-quarter start volume also dropped by 62% year over year from 81,500, which represented the highest volume since 2021.
The 15 markets tracked account for close to half of all total multifamily construction pipeline nationwide.
The steep decline was not entirely unexpected but was exacerbated by recent developments in the financial industry, as tighter access to credit and capital contributed to the slowdown.
“The largest banks were generally targeting less substantial capital allocations for real estate early in 2023; likewise, many smaller banks made strategy adjustments when a handful of regional lenders failed during the spring,” the authors of the report wrote.
Financing for new apartment constructions encountered additional headwinds as rent growth also slowed and insurance costs headed higher. In its second-quarter commercial originations survey, the Mortgage Bankers Association found multifamily loan production overall down by 48% from a year earlier.
With the pace of building leveling off, new multifamily deliveries will likely begin to decrease in early 2025 and fall even further in the second half of the year, Institutional Property Advisors said. As a result, rent growth will likely accelerate as soon as spring 2024 and continue over the next 18 months.
Three Texas markets experienced the sharpest fall off in new starts in early 2023 from the prior nine-quarter average. Houston saw a 79% decline in the second quarter to 1,100 from 5,280, while Austin recorded a 74% drop to 1,400 from 5,470. Meanwhile, Dallas-Fort Worth’s numbers slid down 67% to 3,240 from 9,890.
“It’s perhaps surprising to see that level of deceleration in the Texas markets, as the Lone Star
State’s key metros are still leaders for job production and apartment demand,” the report said.
The decrease in construction, though, likely means the three cities are poised for a surge in rent-price growth. In Dallas-Fort Worth and Houston, new apartment supply is also spread out across a wider swath, rather than concentrated in a few communities as it had been in the past.
Recent research from CoreLogic found the rate of rent-price increases nationwide had fallen back close to pre-pandemic levels earlier this summer after surging in 2022.
Other markets where building starts dropped off at a greater pace than the national average during the second quarter were Philadelphia, Denver and Washington, at 66%, 62% and 57%, respectively.
Among the 15 metropolitan areas covered by the report, the Raleigh-Durham market in North Carolina reported the only growth in the number of apartment dwellings breaking new ground, with volume rising almost 5% to 3,490 from an average of 3,330 during the previous nine quarters.
Sometimes the small, unseemly, unimportant tasks we do every day can have a massive impact on our lives for the better. We call these “life hacks”. In this article, we’re walking through the top ten most powerful life hacks that can change your life. If you’re looking to bring your life together and don’t know where to start, take the time to read this article. It’s crazy where these small steps can lead you in three to five years.
1. 15 Minutes of Sun Every Morning
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Get sunlight in your eyes every morning. Sunlight offers many benefits, including but not limited to setting your circadian rhythm, priming your brain to be alert and focused, and giving your body Vitamin D. It also enhances metabolism and immune functionality. After doing it regularly, watch this transform your overall mood, well-being, and even your ability to sleep.
2. Daily Meditation
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So many of our problems come because we cannot sit by ourselves, alone with our thoughts, for even thirty minutes. Our society is filled with cheap dopamine, constant notifications, and screens everywhere we look. Take time to slow down and be present.
Meditation has already been demonstrated to reduce stress and enhance mental clarity. Meditation might be what you require if you’re grappling with burnout and finding that your performance has declined.
3. Surround yourself with optimists
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Optimists are like the light in your life that you look for when you’re currently in the dark part of your life. Surround yourself with people who bring positive influence. You are the average of the five individuals you invest the most time with. Ensure that each of these five individuals can drive you toward your goals. Ultimately, exercise careful discretion in selecting those you allocate your time to. It’s effortless to draw in negative companions during personal struggle and despondency. However, true allies will aid you in rediscovering a positive trajectory once more.
4. Practice Gratitude
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Gratitude is a key ingredient for living a fulfilling life. Gratitude helps people feel more positive emotions, build strong relationships, and improve their health. Take five minutes per day to write down five things you’re grateful for. Practicing gratitude also reminds you of all that you have: your friends, positive relationships, and good moments throughout the day.
5. Ask for Advice
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Don’t underestimate the power of a mentor. Epictetus mentored Marcus Aurelius. Jobs mentored Zuckerberg. Buffet mentored Gates. Seek advice from people two to three steps ahead of you. You can access their lifetime of wisdom in two to three years. While reading self-help books helps, having access to a mentor is on another level.
6. Journal Every Day
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Writing is essential to unleashing your creative potential. Writing or journaling daily builds discipline and allows you to organize your thinking. It also improves your vocabulary and communication skills. Mastering this skill will lead to success in the modern economy.
7. Invest in Yourself
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We spend eight hours a day working for someone else, but many of us won’t take 30 minutes to work on ourselves. Invest in yourself through reading, exercising, and learning a new skill. Just 30 minutes a day can change your life.
8. Read Good Books
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The most successful people in the world have one thing in common: they love to read. Read about things that interest you. Re-read your favorite books. Read every day. An hour a day of reading puts you at the top .01% of people.
9. Take a Cold Shower
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A three-minute cold shower will provide benefits that last the rest of the day, like raising your ability to handle stress. Taking a cold shower increases dopamine, boosts metabolism, and burns brown fat, so anything else you have to do afterward will seem easy.
10. Set a Bedtime Alarm
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After this alarm goes off, allow your mind to relax. Turn off all your devices. Take a warm shower or bath. Read your favorite fiction book. Setting yourself up for success the next day starts the night before.
Source: Reddit.
These 11 Movies Are So Bad You’ll Wish You Could Unsee Them
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The movies we love best are a combination of excellent characters, plots, stories and cinematography. But if these factors can make great movies, they can also make terrible movies—the ones that make people cringe, the ones we swear they’ll never watch again.
These 11 Movies Are So Bad You’ll Wish You Could Unsee Them
10 Celebrities Who Are Universally Disliked
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People will always have preferences and something to say about celebrities. What you might love may not be the same for others. Whether it’s about their past behaviors, legal issues, or feuds with other celebrities, here is a list of celebrities people just cannot stand.
10 Celebrities Who Are Universally Disliked
11 Vampire Movies That Will Leave You Yearning for More
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Sometimes, we just love to watch a favorite vampire movie, one of the ones that never gets old. It piques our imagination with the unknown story of two teenagers fighting for their love, the incredible and creepy scenes, and the bloodsucking classics.
11 Vampire Movies That Will Leave You Yearning for More
25 Extraordinary Sequels and Remakes That Outshine the Originals
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Every once in a while, a movie sequel or remake surpasses the original film. After polling the internet, “Name a single movie where the sequel or remake was better than the original?” Here are the top-voted responses.
25 Extraordinary Sequels and Remakes That Outshine the Originals
25 Blockbuster Films With Behind-The-Scenes Turmoil Unknown to the Public
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Several big movies with significant nightmare productions have some seriously delicious tea. After a recent poll on the internet, here are twenty-five films with disasters that made filming difficult.
25 Blockbuster Films With Behind-The-Scenes Turmoil Unknown to the Public
Northwestern Mutual Will Help Nearly 2,000 Additional Milwaukee Students Enroll Over the Next Few Years, Advancing Quality Education in the City
Additional commitment of $5.7 million to support 40 Milwaukee-based nonprofits and schools, a bridge loan to Notre Dame School of Milwaukee for expansion of campus, as well as two grants supporting St. Marcus School and St. Augustine Preparatory Academy
MILWAUKEE, Wisc., Aug. 22, 2023 – Northwestern Mutual has long been committed to investing in high-quality education to help close the opportunity gap for Milwaukee-area students. Over the last 25 years, the company has contributed more than $60 million to support these efforts. Today Northwestern Mutual is committing to an additional $5.7 million to support 40 Milwaukee-based nonprofits and schools, which includes a bridge loan to Notre Dame School of Milwaukee and two capital grants to St. Marcus School and St. Augustine Prep. This will help to add an additional nearly 2,000 quality seats to classrooms over the next few years by expanding school campuses.
“Education is a core pillar to the work that we do at Northwestern Mutual. Milwaukee is home to a great number of talented students, and we want to continue to provide them with the foundation for a quality education and opportunities for career advancement,” said Steve Radke, president of the Northwestern Mutual Foundation. “We are thrilled so many additional students will have the opportunity to benefit from the education of these three schools.”
Notre Dame School of Milwaukee, St. Marcus School, and St. Augustine Preparatory Academy are high-performing schools serving students from some of the company’s partner neighborhoods within Milwaukee and recipients of the company’s financial support.
The Northwestern Mutual Foundation is investing in a $2 million bridge loan to Notre Dame School of Milwaukee to help purchase a third campus and increasing the number of high quality education seats, which will serve more than 300 students at the school’s new building over the next few years. The two grants will be issued to St. Marcus School and St. Augustine Prep with $450,000 and $225,000, respectively, adding capacity at the two schools.
Learn more about the schools and the company’s support here: www.northwesternmutual-foundation.com
About Northwestern Mutual Foundation The mission of the Northwestern Mutual Foundation is to improve the lives of children and families in need. The Foundation has given more than $400 million since its inception in 1992 and is designed to create lasting impact in the communities where the company’s employees and financial representatives live and work. We accomplish this by combining financial support, volunteerism, thought leadership and convening community partners to deliver the best outcomes. Our efforts are focused nationally on curing childhood cancer, and locally on education, neighborhoods and making our hometown of Milwaukee a great destination. Visit Northwestern Mutual Foundation to learn more.
About Northwestern Mutual Northwestern Mutual has been helping people and businesses achieve financial security for more than 165 years. Through a comprehensive planning approach, Northwestern Mutual combines the expertise of its financial professionals with a personalized digital experience and industry-leading products to help its clients plan for what’s most important. With more than $558 billion of total assets being managed across the company’s institutional portfolio as well as retail investment client portfolios, nearly $35 billion in revenues, and $2.2 trillion worth of life insurance protection in force, Northwestern Mutual delivers financial security to more than five million people with life, disability income and long-term care insurance, annuities, and brokerage and advisory services. Northwestern Mutual ranked 111 on the 2023 FORTUNE 500.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Subsidiaries include Northwestern Mutual Investment Services, LLC (NMIS) (investment brokerage services), broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company® (NMWMC) (investment advisory and services), federal savings bank; and Northwestern Long Term Care Insurance Company (NLTC) (long-term care insurance). Not all Northwestern Mutual representatives are advisors. Only those representatives with “Advisor” in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.
A money market account is an interest-earning savings account, with some features of a checking account.
Saving money is the best way to prepare for unexpected life events and take control of your finances. But where is the best place to save your money?
If you’ve been researching different savings accounts, you may have wondered, “What is a money market account?” at some point. As of March 2023, interest rates for money market accounts are up to 4.45%,which is higher than normal.
Keep reading for a money market account definition, its benefits, and how it stacks up to other kinds of accounts.
In This Piece:
What Is a Money Market Account?
A money market account (MMA) is a type of savings account that earns interest at a bank or credit union. They are sometimes called money market deposit accounts (MMDAs).
MMA interest rates are usually higher than regular savings accounts and have some features of a checking account, like debit card and check-writing privileges, though there are more restrictions.
How Does a Money Market Account Work?
Money market accounts pay more competitive interest rates than a traditional savings account, with more access to your money than a high-yield savings account. They may also require a larger minimum deposit and balance than a traditional savings account.
As a hybrid between a savings and checking account, money market accounts have some unique features.
Interest: The interest rate offered by MMAs is typically higher than regular savings accounts. It is a variable rate, meaning it changes as the market changes.
Access to your money: Some MMAs come with a debit card and/or checks that you can use to make limited purchases.
Minimum balance: Money market accounts may have a required minimum balance, ranging from $0-$25,000. Each bank has different requirements, and they may scale for getting certain APYs.
Although money market accounts have some features of a checking account, they aren’t meant to be used as a replacement for a traditional checking account.
This is because money market accounts often limit you to six transactions per month. This includes withdrawals or payments by check, debit card, draft, or electronic transfer.
However, you can usually make an unlimited number of transactions in person or by ATM, mail, messenger, or telephone check.
Benefits of Money Market Accounts
Money market accounts are great for short-term savings goals, like an emergency fund. You’ll earn a higher interest rate than standard savings accounts while still being able to easily access your money if needed.
However, this type of account comes with its own set of restrictions. If you’re considering opening a money market account, consider these pros and cons.
Pros of Money Market Accounts:
Higher interest rates than traditional savings accounts
Safe place to keep money with insurance up to $250,000 per account owner
More access to your money than other savings accounts with debit card and check features
Cons of Money Market Accounts:
Lower interest rates than other accounts like high-yield savings accounts or CDs
Requires a higher minimum deposit and balance than traditional savings accounts
Monthly limit on number of transactions
Remember that every financial situation is different, and while a money market account may work well for one person, it may not be a good fit for another.
Money Market Account vs. Other Accounts
Money market account features overlap with different types of savings and checking accounts. The differences between these accounts may be important depending on your financial goals.
If you’re not sure if a money market account is best for you, see how they compare to other accounts.
Standard Savings Accounts
Interest type: Variable
Higher interest rates: No
Insured: Yes
Debit card/checks available: No
Minimum deposit/balance: Yes
The biggest difference between money market accounts and traditional savings accounts is access to a debit card and checks with an MMA.
Money market accounts also generally offer a higher interest rate than savings accounts. In February 2023, the average interest rate for an MMA was 0.48% and 0.35% for a traditional savings account, according to the Federal Deposit Insurance Corporation (FDIC). However, some banks like Discover and Ally are offering up to 3.4% on their MMAs.
The difference is not always that substantial, as MMA interest rates vary with the market. If you find that the interest rate for an MMA isn’t that much higher than your standard savings account, it may not be worth the higher minimum deposit and balance requirements.
High-yield Savings Accounts
Interest type: Variable
Higher interest rates: Yes
Insured: Yes
Debit card/checks available: No
Minimum deposit/balance: Yes
Money market accounts and high-yield savings accounts are very similar. Both offer higher interest rates than standard savings accounts and are insured. In March 2023, MMA and high-yield savings account interest rates were comparable.
One main difference is the addition of debit cards and checkbooks with an MMA, allowing you more access to your money than a high-yield savings account.
If you’re torn between the two options, make sure to compare interest rates, minimum deposit and balance requirements, potential fees, and transaction limits.
Checking Accounts
Interest type: Variable (or none)
Higher interest rates: No
Insured: Yes
Debit card/checks available: Yes (unlimited)
Minimum deposit/balance: Yes
While money market accounts have some features of checking accounts, they aren’t meant to replace a checking account. You still need a checking account for daily expenses, since MMAs are usually capped at six transactions per month.
Additionally, most checking accounts don’t earn interest, and if they do it’s a very low rate. These accounts work best when used together—one can’t replace the other.
Certificates of Deposit (CD)
Interest type: Fixed
Higher interest rates: Yes
Insured: Yes
Debit card/checks available: No
Minimum deposit/balance: Yes
A certificate of deposit (CD) and a money market account are both insured savings accounts that earn higher interest rates than standard savings accounts.
In fact, CDs can earn even higher interest rates than MMAs. They also have fixed interest rates, meaning your money will earn the same amount of interest during its life cycle.
In February 2023, the FDIC reported an average interest rate of 1.36% for a 12-month CD, with banks like Marcus by Goldman Sachs and Discover offering up to 4.5%.
However, the money you put into a CD gets locked up for a set period of time, usually months or even years. If you withdraw money early, you have to pay a penalty. This makes it the least flexible savings account option.
If you have extra money you’d like to safely invest, a CD is a great option. But if you prefer more accessibility to your money, a money market account is the better choice.
Money Market Funds
Interest type: Variable
Higher interest rates: Yes
Insured: No
Debit card/checks available: No
Minimum deposit/balance: Yes
It’s easy to get money market accounts and money market funds confused, or even think they’re the same thing. In reality, these accounts are very different.
Money market funds are offered by investment funds, not government securities like MMAs. This means while money market funds may have a higher interest rate, they’re not insured by the FDIC or the National Credit Union Administration (NCUA), so you could potentially lose money.
You will also have less access to your money with money market funds and may have to pay monthly maintenance or management fees.
Investing in a money market fund may be a good idea for someone who already has a large amount of savings built up in other accounts and is ready to diversify their assets.
Money Market Account FAQ
Still have questions about money market accounts? Check out the answers to these frequently asked questions regarding MMAs.
What Is the Interest Rate for a Money Market Account?
Money market account interest rates in February 2023 were 0.48% on average, but some banks are currently offering up to 3.4%. The interest rate on MMAs is variable, which means it can change depending on the market.
Are Money Market Accounts Safe?
Yes, money market accounts are a safe place to save your money. They are insured through your bank or credit union by either the FDIC or the NCUA.
Your money is insured up to $250,000 per depositor per account ownership category by both the FDIC and NCUA.
What Is the Typical Minimum Balance for a Money Market Account?
The minimum balance required for a money market account depends on the bank or credit union. Minimum balance requirements could be anywhere from $0 to $25,000 depending on the bank or current promotion.
Generally, you can expect MMAs to require a higher minimum balance than standard savings accounts, but you may be able to find an account with no balance requirements.
Some banks have one requirement for avoiding fees and another for securing a specific interest rate. Compare rates from different banks to find the best deal.
Is a Money Market Account a Savings Account?
Yes, a money market account is a type of savings account with certain privileges of a checking account, like a debit card and checkbook.
Money market accounts are a great way to safely earn interest while working toward a short-term savings goal. If you’re not sure that a money market account is a perfect fit for your savings goals, compare high-interest savings accounts.
Investing is a way to increase your wealth based on your risk tolerance and time horizon
The best investments for low-risk investors looking for moderate returns are index funds, government bonds, and high-yield savings accounts
The best investments for high-risk investors that want high returns are individual stocks, real estate, and cryptocurrencies
Investing is one of the best ways to grow your wealth and improve your financial future. One of the keys to finding the best investments is to recognize the power of compound interest. The credit bureau Experian® describes compound interest as “when interest gets added to the principal amount invested or borrowed, and then the interest rate applies to the new (larger) principal.”
There are many ways you can invest, and some investments earn more than others, and some investments are riskier than others. Today, you’re going to learn about the nine best investments in 2023 based on average returns as well as your personal risk tolerance.
The investing information provided is for educational purposes only. We recommend consulting a financial professional before investing.
The best investments
The best investments right now to grow your wealth include:
High-yield Savings Accounts
Short-term Certificates of Deposit (CDs)
Government Bonds
Corporate Bonds
Real Estate and REITs
Individual Stocks
Index Funds
Exchange-traded Funds (ETFs)
Cryptocurrency
1. High-yield Savings Accounts
High-yield savings accounts are similar to a regular savings account, but you’ll often earn more interest by keeping your money in one of these accounts. You can sign up for a high-yield savings account through many banks and credit unions, and some accounts can earn you anywhere from three to four percent annually.
If you have or plan on making an emergency fund, Javier Simon from SmartAsset recommends using one of these accounts. “Anyone looking to open a rainy day or emergency fund that provides a higher-than-average interest rate and high liquidity should consider a high-yield savings account,” writes Simon. You’re saving anyway, so why not make money from storing your funds?
Best investment for: People with lower risk tolerance and who are good at saving. This is one of the safest investments with high returns because many banks are FDIC insured, so even if the economy has a downturn, your money is backed by the government.
Risk level: Very low
How to invest: Banks, credit unions, and online banks
Potential returns: Moderate
2. Short-term Certificates of Deposit (CDs)
When looking for where to invest money, many people turn to certificates of deposit, which are also known as CDs. Like high-yield savings accounts, CDs are another type of account. CDs work by allowing you to deposit your money with the caveat that you don’t withdraw the money for a certain amount of time. Once that time frame expires, you’ll receive your money back as well as the interest.
Best investment for: People willing to store their money for one, three, or five years, which are the average predetermined time frames. Just remember, unlike a savings account, there’s a fee for withdrawing your money early.
Risk level: Very low
How to invest: Banks and credit unions
Potential returns: Moderate returns that sometimes exceed those of high-yield savings accounts
3. Government Bonds
Sometimes, the government needs to borrow money, so they offer people the option to loan them money via government bonds. Like CDs, these bonds are for a specified period, but they provide regular payments. Peoples sometimes use bonds as one of the best passive income investments due to these payments.
One caveat to note is the return on government bonds varies depending on how the economy is doing.
Best investment for: People with a low risk tolerance often buy government bonds. Unless the government fails, there’s not much that will prevent getting your return from this investment. Unlike other investments, government bonds can last for up to 30 years.
Risk level: Very low
How to invest: The United States Treasury or through a stock broker
Potential returns: Low
4. Corporate Bonds
Like government bonds, corporate bonds are loans, but you’re providing that loan to a company. This investment helps companies that need money to invest in new products and expand their business. Since these aren’t backed by the government, they can be riskier because the company may go out of business. Although these have a higher risk, they also have a higher return than government bonds.
Best investment for: Individuals with a higher risk tolerance and are looking for higher returns may want to invest in corporate bonds. These bonds pay out regularly, and they’re a safer investment when buying bonds from large, stable companies that have been around for a while.
Risk level: Moderate to high
How to invest: Stock brokerages
Potential returns: High
5. Real Estate and REITs
One of the investment ideas many people turn to is real estate because it can provide extremely high returns when the housing market is good. The downside is that when the housing market has a downturn, as we saw in 2008, people experience big losses.
Rather than investing in real estate, you can invest in real estate stocks, which are called real estate investment trusts (REITs). These stocks are for companies that own properties like malls, office buildings, and other forms of real estate that generate revenue. These can be slightly less risky but still have some risk due to the nature of real estate.
Best investment for: Those who are looking for high returns or have a diversified portfolio already and can weather some higher-risk investments.
Risk level: High
How to invest: Mortgage broker for real estate and stock brokerages for REITs
Potential returns: High
6. Individual Stocks
Individual stocks are available to everyone, and when the average person buys these types of stocks, they’re known as “retail investors.” You may have heard of retail investors investing in individual stocks during the GameStop stock hype of 2021, which also showed how risky individual stocks can be.
Individual stocks come with a high risk and high reward. Basically, you’re buying a portion of a single company, also known as a share of the company. Numerous factors dictate the price of a stock including the profits or losses of the company as well as speculation of the future of the company.
Best investment for: People who are looking for higher returns and don’t mind the risk may want to invest in individual stocks. These stocks can involve doing a lot of research into a company in order to make a quality decision. It’s possible for single stocks have the potential for large returns and losses. For example, investing in Amazon (AMZN) in 2018 and selling in 2021 would have over a 100 percent return, but buying in 2021 and selling in 2022 would have a 50 percent loss.
Risk level: High
How to invest: Stock brokerage
Potential returns: Low to high
7. Index Funds
Index funds are a type of stock, but rather than owning one stock, you’ll own multiple stocks. These stocks track a specific market, like the S&P 500 or the Dow Jones. When purchasing an index fund, there are often low fees and steady returns. The famous investor and founder of The Vanguard Group, John C. Bogel, popularized investing in index funds. This type of investing is popular because indexes like S&P 500 index funds track the 500 largest companies in the United States.
Best investment for: People who are new to investing as you don’t need to regularly check in and research different companies because index funds track the top companies in the U.S.
Risk level: Low
How to invest: Stock brokerage companies
Potential returns: Moderate
8. Exchange-traded Funds (ETFs)
Exchange-traded funds (ETFs) are similar to index funds because your single stock has shares of multiple companies, but ETFs are usually for specific industries or categories. For example, ARK Invest is a well-known ETF that often invests in technology companies, and there are other ETFs that have an assortment of bonds, like Vanguard’s Bond Market Index Fund (BND).
Best investment for: People with a moderate level of risk tolerance. ETFs can be thought of as a mix between index funds and individual stocks since they’re riskier than index funds, but they’re less risky than individual stocks because you’re more diversified.
Risk level: Moderate
How to invest: Stock brokerage
Potential returns: Low to high
9. Alternative Investments
Cryptocurrency trading is a hot topic, but many people don’t fully understand how it works. Cryptocurrencies are a digital form of currency that’s traded on a network known as the blockchain. The first cryptocurrency was Bitcoin, and now, there’s an endless number of cryptocurrencies. Many people have become millionaires or billionaires from investing in crypto, but it’s an extremely volatile market, and many more have also lost their life savings.
Currently, there is very little to no regulation around cryptocurrency, and much of the investing involves speculation. Notable investors like Warren Buffett and his business partner Charlie Munger have been highly critical of crypto investing, calling it, “worthless, artificial gold.”
Best investment for: People with a high risk tolerance and can tolerate losing their investment may find high returns with crypto investing.
Risk level: Very high
How to invest: Crypto exchanges
Potential returns: Very high
How to Choose the Best Investments
There’s no single right way to choose the best investments because it’s dependent on your unique situation. To make the best choice for yourself, you’ll need to assess your personal risk tolerance and when you’re hoping to cash out on your investments.
1. Assess Your Risk Tolerance
When it comes to investing, the higher the risk, the higher the reward, but it can also mean bigger losses due to unforeseen circumstances. While looking at the top nine best investments, consider how risky they are and whether or not they’re right for you. If you’re concerned about losing money and simply want steady, average returns from your investments, you may want to choose investments that are lower risk.
2. Gauge Your Time Horizon
An important aspect of investing is when you plan on needing the returns from your investment. Many people invest as a way to save for retirement, but some people invest in order to make money to pursue another goal, like purchasing a new home or going on a big trip. For those with a longer time frame of 10 or more years, you can tolerate making low-risk investments with steady returns. If you need the returns sooner, you may want to look into taking more risks.
A simple way to invest based on your time horizon is to use target date funds. The United States Securities and Exchange Commission describes target date funds as being “designed to be long-term investments for individuals with particular retirement dates in mind.” With this type of fund, you set the date you plan on retiring or selling your investments, and it will automatically adjust for risk.
3. Recognize Your Personal Investment Knowledge
Investing does come along with some risks, and these risks vary depending on which type of investing you do. For example, investing in a high-yield savings account is much less of a risk than investing in individual stocks. As a way to minimize your risk and be fully aware of the risks you’re taking, it’s helpful to educate yourself further on each investment and gauge your personal knowledge.
There’s always room to grow your investing and personal finance knowledge. Even the greatest investors in the world continue to learn as much as they can about investment strategies.
4. Assess How Much You Can Budget for Investing
When getting started on your investment journey, it’s often a good idea to minimize your debts as much as possible before creating a budget. For example, if you have a high amount of credit card debt, the interest you’re paying will counteract the money you’re putting into different investment opportunities.
Once you have minimal debt, you can create a budget to see how much you can invest each month. With many of the investments covered here, you can set up automatic investments to make the process a little easier as well.
Best Investments: FAQ
Now, you know about various investments as well as the risk associated with each one. The following are some additional frequently asked questions to help you get started with investing.
What Is Compound Interest?
Compound interest is when the money you make from interest starts making you additional money as well. For example, with a 10 percent interest rate, $1,000 would make you $100. The following year, you’d earn 10 percent interest on $1,100 because that extra $100 you earned will earn interest as well.
Without investing anything else, your original $1,000 investment will be more than double your original investment in 10 years.
Which Investment Gives the Highest Returns?
Investments that have the highest return opportunities include real estate, individual stocks, and alternative investments like cryptocurrencies. Just be sure to keep in mind that these investments also come with the most risk.
Is It OK to Invest During Times of Uncertainty?
Investing during uncertain times can bring better-than-average returns later on. Marcus by Goldman Sachs recommends taking the long view when making your investments. Even during a bad economy, historical data shows that it eventually recovers. You’ll just need to assess your risk and decide if you can weather the storm until it rebounds.
Should You Invest with Bad Credit?
Investing is a way to save for your retirement or future purchases, and it can increase your overall net worth. If you have bad credit or a lot of debt, it may be best to wait on investing because that money could go to paying off debt, improving your credit, and increasing your financial security.
If you need help improving or repairing your credit score, allow Credit.com to help. We have services like ExtraCredit, and we can also provide you with a free credit report card. We’ll be there to help you learn how to improve your credit as well as other ways to increase your wealth, so sign up today!
Rithm Capital Corp., the real estate investment trust that operates NewRez, Caliberand several other businesses, entered into a definitive agreement to acquire Sculptor Capital Management Inc. for $639 million, the company announced on Monday.
The deal, if approved by regulators, will bring to Rithm Sculptor’s $34 billion of assets under management, including real estate, credit and multi-strategy investing spectrum. To Sculptor, Rithm will provide capital to accelerate growth across sectors and seed new funds and strategies.
Rithm is paying $11.15 per Class A share of Sculptor – a premium of 18% over the closing price on July 21 – with cash on hand and available liquidity. The transaction is expected to be neutral to Rithm earnings in 2024 and accretive in 2025.
In the first quarter of 2023, Rithm had a GAAP net income of $68.9 million, compared to $81.8 million in the previous quarter. The company had $1.4 billion in cash. Rithm is scheduled to release second-quarter earnings on August 2.
Michael Nierenberg, chairman, CEO and president of Rithm Capital, said in a statement that the transaction is “transformational.”
“Sculptor’s $34 billion of AUM coupled with Rithm’s $7bn of permanent equity capital and $30+ billion balance sheet creates a world-class asset management business,” Nierenberg said.
Sculptor will operate as a subsidiary of Rithm, led by Jimmy Levin as CIO and executive managing partner, who will report to Nierenberg. Sculptors’ investment and leadership teams will continue in their roles.
“We have long sought a partner with the stable capital structure, culture and vision to help unlock the potential for our platform to deliver more and greater value to our fund investors,” Levin said in a statement.
Sculptor formed on November 17 a special committee of independent directors to explore potential transactions. Sculptor’s leadership has agreed to vote their shares, representing about 26% of the outstanding voting shares, in favor of the transaction. The board of directors of Rithm and Sculptor have approved the deal.
The transaction, subject to customary closing conditions, is expected to close in the fourth quarter of 2023.
The deal with Sculptor comes four days after Rithm’s acquisition of $1.4 billion worth of unsecured personal loans from Goldman Sachs‘ Marcus business unit. Rithm bought the portfolio at a discount, Nierenberg told Bloomberg.
“This purchase is extremely attractive to us building off our past and current expertise in consumer finance,” Nierenberg said in a statement.
In another potential transaction, Rithm said in May that it was considering spinning off the mortgage division to aid its flagging stock, which company executives described as “extremely undervalued.”
The financial services industry has come a long way in recent years. It’s easier than ever for consumers to search for lenders and compare rates for the services they need.
Even Financial has had a hand in that. Founded in 2014 by Phillip Rosen, Even creates technology that helps financial companies better serve their customers.
Rosen serves as CEO of Even, now a top fintech provider with more than $50 million in capital raised. Some of the top companies in the world use Even’s technology, including SoFi and Marcus by Goldman Sachs.
What’s Ahead:
Why Even?
Whether you’re looking for a loan or investment opportunity, tracking down the best deal can be overwhelming. Comparison engines have simplified the process in so many industries, including consumer products and electronics.
The financial industry is the perfect market for a search, comparison, and recommendation engine. Even was founded with the belief that financial services are ideal for comparison shopping. Even provides the definitive search, comparison, and recommendation engine for financial services.
You won’t see Even’s work directly. Instead, they operate in the background on some of the most popular fintech sites.
Meet Even’s CEO – Phillip Rosen
Phillip Rosen has watched Even grow rapidly since founding the company in 2014. Initially, the company sought to transform finance by becoming the search, comparison, and recommendation engine for the sector.
Rosen’s background in data analytics makes him the perfect fit for a technology that powers comparison shopping. Prior to conceptualizing Even, Rosen co-founded Orchard Platform, an investment platform geared toward peer-to-peer and online lending. He also led the development team for Offerpop, a next-generation analytics platform.
Rosen serves as CEO for Even, which has now focused its efforts on further personalizing the results consumers get. Recently, he gave us some great financial tips and discussed Even’s goals.
Money Under 30’s interview with Phillip Rosen
We’d love to hear more in-depth about how and when Even began. Tell us more about how you got to where you are today.
We started Even when we saw a clear gap in the market for an easy way for consumers to search, compare, and get matched with financial services products. As a group of fintech and adtech veterans, we saw the expensive ineffectiveness in how financial institutions were reaching consumers and the lack of accessibility for those same consumers in their search.
Our first MVP was a personal loan API that programmatically matched consumers with pre-approved loan offers. Since then, we’ve built an extensive platform with over 400+ premium partners with a wide range of financial services such as loans, life insurance, credit cards, savings accounts, and mortgages. This was only possible due to our team building strong and collaborative partnerships with both our channel partners and financial institutions partners.
Every day is a continued effort to innovate, bringing the same level of programmatic decisioning to each financial services vertical—while continuing to make the ease of entry for channel partners lower and lower through turkey integration options.
What problem is Even trying to solve?
Our mission has always been to build the definitive search, comparison, and recommendation engine for financial services.
Prior to founding Even, the financial services industry was severely fragmented. Our channel partners had no easy way to provide financial services to their users beyond static ads or embarking on a lengthy process of growing and maintaining their own relationships with lenders (and the compliance and regulatory monitoring that requires).
Even has worked to unify the financial services industry, with use of the Even API and platform.
The Even API is facilitating a transformation in the financial services industry similar to what happened to the travel industry between the late nineties and early 2000s, when the software company ITA, that powers Google Flights, created a data-driven marketplace for airlines. In short, airlines provide data to Google Flights, which then works with content partners like Orbitz and Kayak to provide travelers with recommendations that fit within their budget and needs.
Through ITA, consumers had access to a programmatic marketplace and no longer had to rely on travel agents. Similarly, Even has created a data-driven, programmatic, turnkey marketplace for the financial services industry focused on connecting consumers to a variety of personal finance products. For our financial partners (such as SoFi or Marcus by Goldman Sachs), Even has proven to lower the cost of acquisition, improve monetization, decrease delinquency rates, and deliver transparency at scale—all while delivering programmatic compliance monitoring. For our channel partners—we’ve created easy to implement solutions to add financial products to their business and monetize.
We’re fascinated by your background in data analytics. How do you see data analytics transforming personal finance? How do you use data to benefit your partners and consumers?
One of the four values we uphold at Even is being empirical—more specifically, emphasizing testing, data, and iteration as an approach to making informed decisions.
From our utilization of first, second, and third-party data to generate personalized offers backed by machine learning, to the extensive dashboards we provide partners, to the level of testing we implement before launching a new feature—data is at the heart of all that we do at Even.
We work to consistently provide our partners a better understanding of their consumers and the market as a whole. Alternatively, that same data ensures that consumers are matched programmatically with products that will work best for their needs.
What advice would you give to a Millennial who is looking for a financial service of some sort? And if you were connecting with a Millennial who felt ‘stuck’ in indecision about which product works for their needs, what advice would you give?
The technology is now at your disposal to more easily find the financial services that best meet your needs—it’s similar and as easy as a Google search now, especially with the Even platform. Long gone are the days of your parents going from lender to lender applying for loans and taking a hit to their credit each time. Long gone are the days of meeting with life insurance agents to find the policy that works to best protect your family, only being shown rates from that agent’s carriers, and filling out piles of paperwork.
We’ve enabled our partners to provide consumers like yourself a fully functioning search engine, enabling you to get matched with the financial services offers that work best for you, backed by machine learning.
Content is your friend, as financial services are being de-mystified. Websites like Money Under 30 break down more complex financial information into easy-to-read content—making the answers to any questions you have only a Google-search away. Use your technological savviness to your advantage!
You’ve worked primarily with startups throughout your career. What do you like about working with startups versus a large corporation?
Startups enable a level of agility in development that ensures we’re able to consistently adapt according to the current condition of the market, as well as the needs of our partners. I prefer that agile nature, to ensure that the team I’m leading or working with can consistently deliver the solutions that work best in real-time, while further iterating on them as the need emerges.
As a startup founder, you’ve been praised for your ability to raise capital and acquire businesses. What advice would you have for someone interested in launching a startup or starting a small business?
Though I can’t speak on small businesses, in regards to startups—raising money is a means to an end, but it isn’t “the end”. It’s important to have a defined mission, along with a set of core pillars in how you envision your company will both advance and grow. Invest in your people, and enable them to feel empowered and fearless as they find solutions collaboratively as a team.
People are at the heart of every successful business, and investing in them will pay the biggest dividends. For every successful feature launch or extension into a new vertical we’ve had, there was a team of talented and hard-working people that made them successful.
Do you have an experience you can share with our readers – where you learned a ton from what happened?
I’ve recently been learning the importance of focus. No matter how many great ideas you have, the ability and importance of focus on one could make or break one’s success in accomplishing their goals and objectives.
During such a chaotic and unprecedented time, it’s easy to lose sight of the finish line by taking new paths and running towards emerging opportunities. Focus on the task at hand, and ensure you’re seeing it through to the completion of the objective you originally set, there will always be time to follow up on the other ideas that arose during the journey.
We create yearly and quarterly “OKRs”, or “objectives and key results” that we utilize as a goal-setting framework to define and track objectives and their outcomes. By creating them both company-wide and per-team, we ensure that everyone can focus on what needs to be done—no matter the ideas and distractions that may arise along the way.
A good example of this can be found in how we transitioned into a fully distributed workforce with the pandemic. We already had many distributed teammates through the world, so moving fully-remote was less of a hurdle—but an understanding company-wide regarding what our OKRs and discussing them at bi-weekly company meetings ensured that no matter where and when our teammates were working, they knew the overall goal and could work straight towards them, even as the market and our everyday lives changed.
Your team is growing fast. What have you done to ensure you build a team that works well together?
We have a People Team that works incredibly hard to ensure that we’re seeing the widest and most diverse pool of possible applicants for each position. Once hired, we have a variety of systems and platforms in place that work to ensure we have transparency in our communications, and resources that enable flexible and async onboarding such as an extensive wiki built on
Atlassian that is continuously used to document and memorialize our work and process, Lattice to enable mentorship and succinct 1:1 management and growth, and a company-wide continuing education program we call “Even School” that provides new employees the knowledge they need to jump right into the action and make a difference.
Where do you see financial services going in the coming years? How will technology continue to change how people find and use financial services products?
Every company will be a financial services company. As the market further unifies, and integration for companies (especially at an enterprise level) become easier and easier—everyone from large-internet retailers to workforce platforms will have the functionality to offer consumers a programmatic and easy to use marketplace of the financial products that make the most sense for them.
This will substantially benefit the consumer, no longer requiring them to search extensively for the financial products they need. Accessibility will increase, and consumers will be able to find the financial products they need, where and when they need them. It will also be easier than ever for consumers to accomplish securing those financial services, as technology simplifies their process exponentially.
An example of this can be found in how we’ve helped simplify the process of purchasing life insurance. Prior to the use of APIs, consumers had to speak to a life insurance agent who was only able to offer them the policies that they had on hand. We’ve modernized this approach, enabling the broadest end-to-end, multi-carrier, all-digital online life insurance flows in the industry.
A consumer can now interact with the Even platform on one of our channel partners’ website and secure personalized life insurance policy quotes for their specific health and financial needs, and finalize the process completely online—with some carriers on our network not even requiring a medical check (depending on several insurability factors).
The future of financial services will be streamlined, simplified, and will improve for all parties involved.
Who in your life has been the most instrumental in teaching you about money management?
Many people have provided me insights and teachings along the way, but working in the fintech space—you learn so much about the vast degree of financial products and services that exist beyond what is taught by one’s family or parents when you’re younger.
After years working in this space, and just being an adult in the financial world—nothing was a better teacher than experiencing all of it in my own life.
For example, after years of utilizing credit cards—you start realizing the value of utilizing credit cards that reward you for your specific spending habits, but someone else won’t be able to teach you what those spending habits are—you’ll have to notice them, and then pivot the cast of cards in your wallet to reward you for them.
What’s the best advice you’ve received (not necessarily money-related) that has shaped how you lead your life?
When it comes to management, always make sure that the wins go to your people, and the losses are socialized amongst the leadership.
For example, if a pitch doesn’t go according to plan, placing blame on the sales team that led the pitch doesn’t make much sense and it is unproductive—it’s more productive to just have a post-mortem across the leadership team to understand what went wrong overall, and what would have made your company more attractive. Alternatively, if a pitch goes well, that should undoubtedly be credited to the sales and marketing teams that made that pitch successful—and the leadership team should congratulate them accordingly.
What’s your top personal finance tip?
Buy crypto in 2012. No, but more seriously—as once said “compound interest is the most powerful force in the universe”. Use it to your advantage.
What is the financial book/website/podcast that has most influenced you?
I’ve found that Twitter, especially the FinTwit end of it, is an extremely valuable resource to not only understand the current condition of the market and industry but to also understand what consumers are facing so you can create solutions based on it.
With constant real-time updates coming from the most intelligent people in this industry, consistent and important journalism being shared, and consumers reacting to the markets and news in real-time—it’s an unending source of information.
What piece of wisdom would you give your 20-year-old self about managing money?
Have an IRA and put money into index funds each month.
Summary
Thanks to the work of Even, it’s easier than ever for consumers to find the perfect financial services to meet their needs. Phillip Rosen and his team are leading the platform into the next phase, as companies of all types seek recommendation and comparison engines. With a mind for data and a long history of working in tech, Rosen is the perfect leader to guide Even into the next era.
While Rithm Capital’s purchase of $1.4 billion of consumer loans from Goldman Sachs will assist with its diversification efforts, it can also help its mortgage lending business, a BTIG report said.
The price paid was not disclosed. The portfolio consists of loans originated by Goldman Sachs’ Marcus unit, and held on the parent company’s balance sheet.
“To a degree we think the acquisition of Marcus loans could pair nicely with its origination efforts on the mortgage financing side of the business, especially if there’s some first-time homebuyers in the mix,” the BTIG report, authored by Eric Hagen and Jake Katsikas said. “However, we think the deeper objective is to flex its capabilities as a diversified investor and lender, including the ability to toggle between putting assets on its own balance sheet and generating fees from managing and servicing on behalf of third parties.”
These are fixed-rate closed-end installment loans, with about 95% of the pool originated between the fourth quarter of 2021 and the same period in 2022. BTIG provides “cursory details” on the portfolio, namely an average credit score of 735 and a projected loss range of between 8% and 10%.
Goldman Sachs is in the process of reorganizing Marcus. Furthermore, in the second quarter, Goldman Sachs recorded a $1.15 billion hit to its earnings because of commercial real estate issues.
At the end of the first quarter, Goldman Sachs had $2.9 billion of Marcus loans on its books, net of a $470 million write-off. During the period it sold a $1 billion portfolio to Varde Partners and provided $830 million of seller financing, BTIG and Bloomberg said.
“This purchase is extremely attractive to us building off our past and current expertise in consumer finance,” said Michael Nierenberg, chairman, CEO and president of Rithm, in a press release. “Consistent with our investment approach, we continue to look for opportunities to grow shareholder value and believe this transaction will be an excellent addition.”
Rithm could move into direct consumer lending given the changing landscape in the banking business, a Keefe, Bruyette & Woods flash note on the deal said, citing Nierenberg’s comments in a Bloomberg article.
“We view the transaction positively, as Rithm has a history of making opportunistic investments that generate attractive returns,” Bose George, an analyst at KBW said in a flash note.
This deal compliments a prior Rithm investment in what BTIG termed the SpringCastle portfolio, a small, but high-yielding package of lower credit score unsecured consumer loans originated and serviced by OneMain.
“The acquisition also aligns with Rithm’s objective of widening its stance to incorporate a comprehensive list of target credit investments, along with developing third party asset management capabilities,” BTIG said.
Rithm wants to flex its capabilities as a diversified investor and lender, with the ability to toggle between putting assets on its balance sheet and generating fees from managing and servicing them on the behalf of third parties, the report continued.
BTIG’s bottom line on this transaction is it continues to see Rithm’s diversification of capital as a source of value for investors, “especially if the objective is to eventually spin off the [mortgage] origination and servicing segments of the business, as it could help certain tangential strategies with strong returns become more visible earnings drivers.”
Rithm Capital, the Michael Nierenberg-headed real estate investment trust, appears to be getting into direct lending. The REIT bought $1.4 billion worth of unsecured personal loans from Goldman Sachs‘ Marcus business unit, Bloomberg reported Thursday.
Rithm bought the loans at a discount, Nierenberg told the outlet. The portfolio of loans Rithm purchased were to borrowers with an average FICO score of 735 and Nierenberg said he’s assuming losses between 8% and 10%.
“They’re pretty healthy borrowers who were just consolidating debt,” said Nierenberg. “It’s an opportunistic acquisition; we don’t see pools like this come across very often.”
Nierenberg told Bloomberg that Rithm is also looking to move into the direct lending space as banks face tightening regulations from Basel III.
“If the regional banks continue to pull back, it could be an opportunity,” he said.
Rithm, the REIT that operates mortgage lenders and servicers NewRez, Caliber and several other businesses, said in May that it was considering spinning off the mortgage division to aid its flagging stock, which company executives described as “extremely undervalued.”
Meanwhile, Goldman Sachs has had to eat hundreds of millions of dollars on its consumer unit Marcus. A week ago the bank sold $1 billion of personal loans to alternative investment firm Varde Partners. Goldman also sold a $1 billion tranche in the first quarter, the investment bank disclosed in regulatory filings.
If it does get into direct consumer lending, Rithm will find some familiar faces in the independent mortgage bank world. Guaranteed Rate last year announced that it would be offering unsecured personal loans to qualifying customers at competitive rates.
With house prices rising in many markets across the country, millions of homeowners are choosing to stay in their current homes and go the home improvement route instead. Not only will that increase the value of your home, but it will also help you avoid the need to make a costly and disruptive move.
But home improvements can also be expensive, rising to the level of needing a loan to complete the work. For that reason, MU30 has created this home improvement loan calculator to help you determine the real cost of making home improvements.
What’s Ahead:
Home improvement loan calculator
Getting a home improvement loan
How the home improvement loan calculator works
The home improvement loan calculator allows you to calculate a new loan either by loan term or by monthly payments. That will give you a choice over how you want to handle repayment on the loan. You can either choose a shorter term to get the loan paid off as soon as possible, or you can select a monthly payment amount that fits neatly within your budget.
The calculator will ask you to supply three pieces of information:
Loan amount.
Loan APR (the approximate interest rate you expect to pay).
Your choice to either calculate my loan term or by monthly payment, as described above.
If you choose to calculate by loan term, you’ll also be given a choice of terms ranging from 12 to 84 months, as well as an option to make an extra monthly payment to reduce the loan term and the amount of interest you’ll pay. You’ll then hit the calculate button to get your results.
Those results will include:
Your estimated monthly payment.
The amount of interest you will pay over the course of the loan.
If you choose to calculate by monthly payment, you’ll then be asked to enter an expected monthly payment. For example, if you take a $25,000 loan at 7%, and you decide $300 will neatly within your budget, you’ll enter $300 and hit the calculate button.
The results will include the 1) months to pay off the loan, 2) the years to pay off the loan, and 3) the interest paid over the course of the loan.
An example using the home improvement calculator
Let’s say you determine that you need $50,000 to complete home improvements on your property. But you want to know what the monthly payment will be as well as any options that will affect the amount of that payment.
You can use the calculator choosing to both Calculate by Loan Term and by Monthly Payment.
You’ll start by entering the following:
Loan amount: $50,000.
Loan APR: 7%.
Select a choice: Calculate by loan term.
Loan term (months): 60.
Extra monthly payments (optional): $0.
Then hit calculate.
The calculator will reveal your estimated monthly payment will be $990.06, with $9,403.60 in interest paid over the 60-month term.
But let’s say you decide a $990 monthly payment is too high for your budget. You can go back to “Select a Choice” and click the calculate by monthly payment bubble. Another box will appear below, “Expected monthly payment”. If you decide a $600 monthly payment is a better fit for your budget, enter that in that box, then hit Calculate.
The calculator will show you three results:
Months to payoff: 114 months.
Years to payoff: 9.50 years.
Interest paid: $18,400.
Whether you use the calculate by loan term or calculate monthly payment method, you’ll be able to enter different numbers and run various scenarios to come up with a loan amount, rate, term, and monthly payment that will work for you.
When you find a combination that will work for you, you can then begin your search for a home improvement loan lender.
Where to get a home improvement loan
Fiona
Fiona stands out among aggregators (a place where you can shop for multiple loan rates from a variety of companies) because their application process is ridiculously easy. They partner with some of the most popular lenders, such as SoFi, Prosper, and Marcus by Goldman Sachs, and you’ll get your potential rates in seconds.
When you decide which lender is right for you, Fiona can help walk you through the often rigorous loan application process. The good news is, you’ll already know the rate you’ll likely get.
You can shop for personal loans through Fiona, which can easily be used for home improvement projects – in fact, it’s even one of the designated categories you can get rates for.
LendingTree
LendingTree is probably the biggest and best-known online loan marketplace on the web. It’s a source for all types of financing, including home loans, personal loans, credit cards, auto loans, student loans, and business loans. And because it includes participation by dozens of major lenders in each loan category, it’s an opportunity to get multiple loan quotes after completing a single application. That will give you an opportunity to do a side-by-side comparison of the loan products that will work best for you and offer the most favorable pricing.
If you get a home improvement loan on LendingTree, you can certainly get a home loan, such as either a refinance or secondary financing, like a home equity loan or a home equity line of credit. But if you don’t want to pledge your home as security for a new loan, you should also consider investigating personal loans for your home improvement needs. You can borrow as much as $40,000 to $100,000, with no collateral whatsoever, and pay the loan off in installments with a fixed term, interest rate, and monthly payment. Since the funds from a personal loan can be used for any purpose, you can also use them for home improvement.
Credible
Credible is also an online lending marketplace, but one that specializes in personal loans, student loans, home financing, and credit cards. Once again, you can consider either direct home financing, like a home equity loan or line of credit, or a personal loan.
Like LendingTree, you can get quotes from several different lenders after completing a single application. Personal loan lenders on Credible include some of the top names in the industry, including Avant, Discover Personal Loans, Prosper, SoFi, Upgrade, and Upstart.
Credible Operations, Inc. NMLS# 1681276, “Credible.” Not available in all states. www.nmlsconsumeraccess.org.”
Credible Credit Disclosure – Requesting prequalified rates on Credible is free and doesn’t affect your credit score. However, applying for or closing a loan will involve a hard credit pull that impacts your credit score and closing a loan will result in costs to you.
What you should know about home improvement loans
Though there are loans specifically titled “home improvement loans”, it’s really a catchall phrase that describes several different loans that can be used for that purpose.
When shopping for a home improvement loan, it’s important to keep that fact in mind. While getting a home equity loan or a home equity line of credit may seem like the instinctive loan choice, it’s certainly not the only one. And it may not even be an option if you lack sufficient equity in your home. As well, you may find the restrictions on using a home equity loan for home improvement to be greater than it is with other loan types.
That’s why it’s mission-critical to consider all loan options when it comes to home improvement.
How to finance your home improvement project
Fortunately, there are several different financing options when it comes to home improvement. The one you select will depend on your financing needs and personal preferences. Let’s take a quick rundown of the options available.
0% introductory APR credit card
Many credit cards offer either introductory 0% APR on purchases or will make them available periodically on an existing credit line. The advantage of this type of financing is that it’s very simple to use. If you qualify for a card with the offer – which usually requires good or excellent credit – you’ll have access to several thousand dollars in borrowing power that you can use at your own pace.
Another advantage of this type of financing for home improvement is the flexibility you’ll get. You can borrow only as much as you need and repay on your own terms. However, be aware that the 0% introductory APR typically lasts only 12 to 18 months. The maximum loan amount will generally be no more than $10,000, so this method will only be suitable for smaller improvement jobs.
One of the best cards on the market right now is the Chase Freedom Flex℠ which offers a 0% Intro APR on Purchases for 15 months. But it also offers a TON of cash back opportunities, including 5% back on bonus categories that rotate each quarter, 5% back on travel purchases (booked through Chase Ultimate Rewards), 3% cash back on dining and drug store purchases, and finally, 1% cash back on all other purchases.
Personal loans
Available through LendingTree and Credible as described above, the major advantage of this type of loan is that it can be available in higher loan amounts – as high as $100,000 – and is totally unsecured. That makes them an especially good option if you don’t have sufficient equity in your home to complete the home improvements you want.
The major disadvantage is that the monthly payment on a large loan amount can be high since the loan term is typically no more than five years. However, some of the lenders participating in the above platforms will go out even farther on the term, from seven years to as long as 12.
Home equity loans and home equity lines of credit (HELOCs)
These are the most traditional sources of home improvement loans and may be the very best option if you have sufficient equity to cover your home improvement needs. Interest rates are low, and you’ll have more control over the term of the loan, and therefore the monthly payment. But once again, the major disadvantage is that if you don’t have sufficient home equity, this won’t be a viable route.
Cash-out refinance
Using this method, you’ll do a full-on refinance of your home, repaying any existing indebtedness, and taking out sufficient equity to cover your home improvement costs. It works especially well if you have a lot of equity in your home and prefer to handle all your home financing needs under a single loan and monthly payment.
But much like a home equity line of credit or a home equity loan, its success will depend on the amount of home equity you have. Also, be aware there are significant closing costs involved in doing a refinance, which can range between 2% and 4% of the new mortgage taken.
Summary
When you need to do a home improvement project, there’s a good chance you’ll need to find a loan in order to complete the process. Using Money Under 30’s calculator above, you’ll be able to tell how much you can borrow comfortably to fit the payment into your budget.