Imagine that you’re a farmer. You live in a rural county where everybody raises sheep.
The county’s farmers, on the whole, prosper. Their flocks tend to grow by 10 percent every year. Some years are better than others. In the best years, the sheep population in the county grows by 40 percent. Little lambs are everywhere! But in the worst years — years filled with frost, famine, and disease — the sheep population can collapse to half of what it was before.
Further imagine that the county becomes home to vicious predators. Wolves, perhaps. The wolves descend from the mountains and begin to eat the sheep. Some farmers protect themselves from loss, but others don’t know how — and some don’t even realize their flocks are being attacked.
The farmers who take precautions aren’t able to prevent all losses, but they come close. On farms with vigilant shepherds, only 0.10 percent of sheep are lost to wolves every year. For every thousand sheep, the wolves pick off one animal.
The farmers who don’t take precautions, on the other hand, suffer terrible losses. During the initial onslaught they lose 5 percent of their sheep. (Plus, every time they add more sheep to their herds, the wolves manage to grab another 5 percent.) To make matters worse, the wolves steadily steal 2 percent of the beasts every year. For every thousand sheep, this group of farmers loses 50 in the initial attack, and 20 more each year thereafter.
Think of it: After the first year, the smart farmers will have lost just one of every thousand sheep. The other shepherds will have lost 70 sheep.
If the county’s flocks each grew at the long-term 10 percent average during that first year, the vigilant folks would now have 1,099 sheep for every thousand they started with. The unwary farmers would have 1,024 sheep.
Now imagine that in the second year, the same pattern continues. All flocks grow at the long-term average of 10 percent, and the wolves snatch 2 percent of the animals from those farmers who aren’t paying attention. At the end of the second year, the wolf-free flocks would have grown to 1,208 sheep for every thousand that were present at the start. The flocks where the wolves run wild would have just 1,104 sheep.
Both populations of farmers enjoy the same growth rate among their flocks. The difference is that one group loses fewer sheep to the wolves.
And at the end of 10 years following this pattern? The wolf-less flocks would have grown from 1,000 to 2,566 sheep. Those under attack would still have increased, but at a much slower rate. They’d have 2,013 sheep.
Things are even worse when you look at the farmers who add more animals to their farms every year. Remember that I said the wolves slaughter 5 percent of the sheep added to the unlucky flocks? Well, assume that wealthy farmers from both populations are able to buy 100 new sheep every year — but that the wolves snatch five of these from the one group.
At the end of a decade, these wealthy farmers will have contributed a total of 2,000 sheep to their flocks for each 1,000 sheep they started with. With average long-term growth, these flocks will have grown to 4,154 animals for the lucky shepherds and 3,374 sheep for those ravaged by wolves.
Which population of farmers would you prefer to join?
I won’t belabor this analogy any longer. I think most of you get my point.
Stock-market investors are like these sheep farmers. Collectively, they enjoy investment returns of roughly 10 percent per year. Individually, however, things are different. Most investors suffer severe losses from the wolves of Wall Street. Wolves, by the way, who don sheep’s clothing to convince investors to trust them. (These investors also have a tendency to make things worse by selling their flocks when sheep prices fall and expanding them when prices rise.)
If you want to be a successful farmer, you have to understand how farming works, and how to protect yourself from the wolves. Fortunately, it’s not as tough as it seems.
The financial industry wants you to believe that investing is difficult. If you buy into their message, if you accept the premise that you need help to invest wisely, they can charge you big bucks to handle your money.
The truth is somewhat different. Investing is simple. In fact, it can be one of the easiest things you do while managing your finances. How simple? Let’s boil it down to just a few sentences.
Here’s how to invest wisely:
Set aside as much as you can in investment accounts. Prefer tax-advantaged accounts (like a 401(k) or Roth IRA) before taxable accounts.
Invest all of your money in a low-cost stock index fund, such as Vanguard’s VTSMX or Fidelity’s FSTMX.
If the stock market makes you nervous, allocate some portion of your money to a bond fund. Or invest instead in a low-cost combo fund like Vanguard’s VGSTX or Fidelity’s FFNOX.
Continue investing as much money as possible. Never touch it.(Nothing makes a bigger difference to the size of your flock investments than how much you contribute.)
Ignore the news and ignore your fund.
That’s it. Seriously. That’s all you have to do to earn returns better than 90 percent of other investors.
There are scores of books and published research papers that support this strategy. It’s also the strategy that Warren Buffett (and other top pros) recommend for 99 percent of investors. If you’d like, you can spend days or weeks or months reading about why this works. Or you can trust these folks and do it.
Longer ago, my own flock of sheep was crippled by predators and my own bad behavior. After many mistakes, I got smart. I moved to greener pastures far from danger. Now I can ignore my sheep and go about my daily life, comfortable that the animals will continue reproducing at the long-term average without any intervention on my part. And with no danger of being consumed by wolves.
California Democrats carved out the Dream for All money to help first-time buyers. The funds ran out after just 11 days with the average loan hitting $112,000.
Lea este artículo en español.
California lawmakers marketed its new loan program for first-time home buyers as a “Dream For All.”
But just 11 days after applications opened, the initial pot of money is tapped out, sucked dry by eager house hunters. It turns out the dream was only for a lucky couple thousand borrowers — a disproportionate number of them white, non-Latino and living in the Sacramento area.
The Dream for All program was paused on April 6, less than two weeks after the California Housing Finance Agency said it would make the program available to lenders. About $288 million in initial funding will be provided to 2,564 homebuyers, according to an internal document obtained by CalMatters.
exchange for a share in the home’s value when it is sold, refinanced or transferred. If the home appreciates in value, those gains to the state would then be used to fund the next borrowers.
The program was meant, in part, to help address California’s ethnic and racial wealth gap, with Black and Latino families having fewer net assetsthan the national average. Participation in the program was limited to households earning less than 150% of median earnings in their county. According to the initial characteristics shown in the agency document obtained by CalMatters, roughly two-thirds of the beneficiaries went to those making less than $125,000. The average loan was a little more than $112,000.
But those figures also show that the program was disproportionately used by white homebuyers. Senate President pro Tempore Toni G. Atkins, of San Diego, said in a statement Monday that the program was intended to reach those historically shut out of the housing market.
“While this program has been immensely successful in getting new homebuyers into the market quickly and in places with low homeownership rates like the Central Valley, clearly more work needs to be done to make sure that there is statewide awareness, particularly in communities of color,” Atkins said.
Learn more about legislators mentioned in this story
Toni Atkins
State Senate, District 39 (San Diego)
Expand for more about this legislator
State Senate, District 39 (San Diego)
Time in office
2016—present
Background
Small Businesswoman
How she voted 2021-2022
Liberal Conservative
District 39 Demographics
Voter Registration
No party
24%
Campaign Contributions
Sen. Toni Atkins has taken at least $29,015
from the Health
sector since she was elected to the legislature. That represents 9%
of her total campaign contributions.
The fact that the program ran out of cash in a two week spree speaks to just how voracious demand is for housing in California. It also suggests that some of the people who made use of the program were already well into the house hunting process.
That raises an important question: How many of the people who benefited from the loan program actually needed the help and how many would have purchased a home anyway?
“I would guess that 30 to 50% of the people who are using it could qualify or buy without it because I had plenty like that,” said Matt Gougé, a Sacramento loan officer, referring to his own clients.
Ryan Lundquist, a Sacramento appraiser and real estate analyst, said the demographics and current price trends across the region make Sacramento County “a prime target for first time buyers” and therefore a natural beneficiary of the program.
Gougé, the local loan officer, said news of the program spread by word-of-mouth throughout the capital community in the days before the state officially launched the program on March 27. The regional rumor mill may have been churning especially quickly given how much more plugged-in locals are to matters of state bureaucracy.
“Sacramento and the surrounding area’s loan officers and Realtors probably got a jump start,” he said.
While the initial funding for the program might be tapped out, the size and scope of the Dream for All program will likely be a subject of negotiations between Gov. Gavin Newsom and the overwhelmingly Democratic Legislature. In January, Newsom proposed a significantly smaller version of the 10-year, $10 billion program originally envisioned by Sen. Atkins. The governor proposed spending an initial $300 million on the program, a cut from the $500 million compromise signed last year.
Atkins, in her statement, told CalMatters that she was seeking to get more funding for the program in upcoming budget negotiations. The governor is expected to offer a revised state spending plan and a new financial forecast in May. Lawmakers must pass a balanced budget by June 15 in order to get paid.
If you’re moving away for college and planning to bring a car, remember to check how this change might impact your car insurance. You might need to purchase your own car insurance policy, for example, or you may be able to stay on your parents’ policy if you meet certain conditions. Having the right coverage in place can help ensure you’re covered in case of an accident.
If you’re a teen driver or you have a teen driver listed on your policy, you might also be looking for ways to save. Adding a younger driver can make car insurance more expensive, but the good news is that some companies offer cheaper average rates than others for college students. In addition, several companies offer competitive student discounts.
The best car insurance for college students
While many of the best car insurance companies provide discounts to college students, some are more generous than others. Below, Bankrate’s insurance editorial team selected five top car insurance providers that offer competitive rates to college-aged drivers on their parents’ policy, according to 2023 auto insurance rate data pulled from Quadrant Information Services.
Each company is listed with its Bankrate Score, which shows how well each insurance provider performs overall, on a five-point scale. Our team calculates Bankrate Scores by analyzing each company’s average premiums, coverage offerings, discount options, complaints filed with the National Association of Insurance Commissioners (NAIC), mobile app, J.D. Power score for customer service and AM Best rating for financial strength. The closer a company scores to five, the better it performs across each category.
Insurance company
Bankrate Score
Average full coverage premium with a student discount on their parents’ policy
Average full coverage premium without a student discount on their own policy
Geico
4.4
$2,523
$4,048
State Farm
4.2
$2,689
$7,089
Progressive
4.2
$3,163
$7,088
Farmers
3.8
$2,762
$6,567
Allstate
3.8
$4,184
$7,089
*Rates calculated for 18-year-olds students, either on their parents’ joint policy with a student discount applied or on their own policy without a student discount applied
Geico
Why we picked this carrier: Geico offers a low average full coverage rate when adding an 18-year-old college student to their parents’ car insurance policy.
If you’re looking for cheap car insurance, you may want to get a quote from Geico. Geico’s average annual cost for full coverage car insurance for 18-year-olds on their parents’ policy is $2,523 per year with a good student discount. College students may also be able to qualify for other discounts to further bring down the cost, like Geico’s discounts for membership in several organizations. The company received a high Bankrate Score of 4.4 for its wide range of discounts and low average premiums. However, the company lost a few points for its lack of optional endorsements. Unlike some of its competitors, Geico does not offer a 24-hour helpline.
PROS
Checkmark
Offers discounts for fraternity, sorority, honor society and other membership organizations
Checkmark
Several student discounts available
Checkmark
Low average rates for college students added to their parents’ policy
CONS
Close X
No 24/7 helpline
Close X
Few optional endorsements
Learn more: Geico insurance review
State Farm
Why we picked this carrier: State Farm offers a generous potential discount percentage for good students.
Parents with 18-year-old students on their State Farm auto policy pay an average annual cost of $2,689 for full coverage car insurance with a good student discount. State Farm offers savings for eligible college students who can maintain a GPA of at least 3.0. Students attending school away from their primary residence without a car may also be eligible for a distant student discount, and combining these two discounts could result in an even lower premium. The company received one of the highest Bankrate Scores on our list for its low average premiums, accessible mobile app and excellent online policy management. However, if you’re interested in buying accident forgiveness coverage, a State Farm policy wouldn’t be ideal. The company only offers the coverage as a perk earned by having a certain number of claim-free years on your record, which can’t be bought.
PROS
Checkmark
Low average rates for college students added to their parents’ policy
Checkmark
Good student and distant student discounts available
Checkmark
Offers a safe driving program for teens called Steer Clear
CONS
Close X
Gap insurance unavailable
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Accident forgiveness can’t be purchased, only “earned”
Learn more: State Farm insurance review
Progressive
Why we picked this carrier: Progressive’s Snapshot telematics program could be a great savings opportunity for college students who drive safely and infrequently.
Progressive’s average annual cost of full coverage car insurance for 18-year-olds on their parents’ policy is $3,163 with a good student discount. In addition to the standard good student and distant student discounts, Progressive also offers Snapshot, a usage-based car insurance program — which could help lower your rate based on your driving habits. The company earns a high Bankrate Score for its exceptionally wide range of coverage options, plentiful discounts and seamless online policy management. However, the company tends to have lower-than-average customer satisfaction ratings according to J.D. Power.
PROS
Checkmark
Usage-based car insurance available
Checkmark
Good student and distant student discounts available
Checkmark
Offers an automatic teen discount for drivers age 18 and younger
CONS
Close X
Typically ranks lower than the average in J.D. Power customer satisfaction
Close X
Rates may differ between online and agency quotes
Learn more: Progressive insurance review
Farmers
Why we picked this carrier: Farmers offers several discount opportunities to students.
Parents with 18-year-old college students on their policy pay an average of $2,762 for their insurance each year with Farmers with a good student discount applied. Farmers also offers a youthful driver discount for anyone under 25 who is a child or grandchild of a current policyholder. While Farmers scored well in terms of mobile app and policy management, the company doesn’t have 24/7 customer support and is not available nationwide.
PROS
Checkmark
Students who make the dean’s list or honor roll may be able to save
Checkmark
Several student and young driver discounts available, such as the Youthful Driver discount
Checkmark
Offers a telematics program called Signal
CONS
Close X
Not available nationwide
Close X
No 24/7 support
Learn more: Farmers insurance review
Allstate
Why we picked this carrier: Allstate has multiple discount opportunities for college students.
Although Allstate has a high average premium for a student on their parents’ policy, college students may be able to apply discounts to bring down the cost of auto insurance. College students who can maintain a GPA of at least 2.7 may qualify for a good student discount, which is more generous than many other insurers’ good student discount qualifications. The company’s Bankrate Score was impacted by its high premiums. However, it gained points for its A+ (Superior) AM Best financial strength rating and user-friendly policy management.
PROS
Checkmark
Money-saving programs such as Smart Student and teenSMART available
Checkmark
Several student discounts available
Checkmark
Robust digital tools
CONS
Close X
High average premiums
Close X
Fewer additional coverage options than other carriers
How can college students lower their car insurance premium?
Because car insurance rates for young drivers are significantly higher than the national average cost of car insurance, finding ways to save money may be critical. To find cheap car insurance for college students, you may want to get several quotes to give you an idea of what you will pay. Some other ways to save include:
Student discounts
Many car insurance companies offer discounts designed specifically for college students, such as:
Earning good grades in school demonstrates to insurers that you are responsible, making it more likely that you are a responsible driver and often earning you a discount.
Another way to save money on car insurance is to complete a driver’s education course. For example, drivers with a Geico insurance policy could save by completing a defensive driving course to refresh their memory on the rules of the road.
You could save money by leaving your car at home when you are away at school. Most car insurance carriers will discount your rate if you a a certain number of miles away without a car, prorating your premium to reflect the months you are away at school and not using your vehicle.
Students can often save by demonstrating their safe driving practices through insurance programs designed for young drivers. For instance, there are savings programs like American Family’s Teen Safe Driver, for drivers under age 21, and State Farm’s Steer Clear program, for young drivers up to age 25. After completing the program, drivers could get a discount on their car insurance.
Affiliation discounts for students
Many insurance companies also offer discounts for students who participate in certain organizations or associations, such as:
Geico offers car insurance discounts for fraternities, sororities and even honor societies, along with an extensive list of other organizations.
Some companies may offer discounts if you are an alumni of a certain university or even if you’ve simply completed a two- or four-year degree.
If a parent is a veteran or military member, you might save extra money on your car insurance through military discounts. As a military-only provider, USAA is one option for military discounts for your car insurance, but a few other companies offer military discounts, too, such as Geico, The General and Liberty Mutual.
Other ways to save
In addition to student and affiliation discounts, there are other ways college students can help lower car insurance premiums using these additional savings programs:
Lower your mileage: When you spend less time on the road, there’s a lower risk of accidents happening, so many carriers will offer lower car insurance premiums to drivers who rack up fewer miles.
Drive a used car: Newer cars may be more expensive to repair or replace, so rates could be higher. A used car is generally cheaper to fix and may qualify you for lower car insurance premiums than a new car. Driving a vehicle with extra safety features is another way to potentially earn lower premiums, so explore models with safety features like anti-lock brakes, electronic stability control, forward-collision warnings and automatic emergency braking.
Explore pay-as-you-go insurance: Instead of paying full price for car insurance, you might be able to sign up for pay-per-mile insurance, which monitors your driving and charges your car insurance accordingly. It’s a popular option with several car insurance companies: Allstate offers its Milewise program and Nationwide has its SmartMiles program.
Car additions: Some additions and upgrades may make your car safer and help you save money on car insurance premiums.
Dash cams: Dash cameras could help reduce car insurance rates by reducing the likelihood of crime involving your vehicle and also protecting you against false liability claims that could cost your insurer money. Discounts for dash cams aren’t common, but you may find a carrier that offers one.
Navigation systems: A GPS navigation system can help keep you feel more prepared when driving, helping you drive slower and more safely, which could translate to lower rates.
Anti-theft device: A car alarm or other anti-theft device may earn you extra discounts by lowering the risk of theft or vandalism.
Ways to save on driving
Driving can be expensive, especially so for college students on tight budgets. Keeping transportation costs low can help students afford to keep their cars and maintain insurance on the vehicle. Here are some ways to save on gas and vehicle maintenance.
How to save on gas
Gas can be pricey, especially if you drive often. Here are some ways to lower your gas costs:
Choose a car with good gas mileage: College students often commute between home and school, so a car with excellent gas mileage can easily save hundreds of dollars each year.
Use a rideshare service: Using rideshare services like Uber and Lyft can help you save on gas costs, and may be especially cost-effective if you opt for group ridesharing, where you split the cost with others.
Utilize public transportation: Public transportation can almost entirely eliminate transportation expenses. Buses, trains or subways are often a fraction of the cost of driving and are usually accessible at most colleges or universities.
Invest in a bicycle: A bicycle can be an even better substitute for public transportation, especially for students in urban areas. Using a personal bicycle is free after purchase, and there are also typically lots of options for low-cost bike sharing or rentals in more populated areas.
Carpool with your classmates or colleagues: If you must drive, consider setting up a carpool or car-sharing arrangement with classmates or colleagues who live along your route. They will probably appreciate the opportunity to save money and it gives you the added benefit of some company during the commute. Just be sure to talk to your insurer if you’re exchanging money for gas and maintenance, to make sure you’re still covered.
How to save on maintenance
Maintenance costs should be factored into buying a vehicle as well, as they can be a large portion of your car budget. Here are some tips to save on maintenance:
Find car deals for new graduates: Many car manufacturers offer special purchase deals for current college students or recent graduates to buy a new car. There may also be short-term leasing specials available for students for those not ready to purchase a vehicle.
Ask about student savings programs for oil changes: Another potential place to save is regular oil changes. College students can burn through many miles and require more frequent oil changes, but many of the larger chains, such as Jiffy Lube, offer students discounts.
Utilize free tire and air fill-up services: To save extra money on diagnostic and professional services, check your tire pressure yourself. Most gas stations offer free or cheap stations to check tire pressure and add air if necessary.
Research DIY repairs: There are several basic car repairs that can be done at home. Learning how to do essential maintenance can save money on parts and high labor costs. It will also save time to repair the car on your own schedule. These basic repairs are easy to learn and can save hundreds of dollars. Before attempting them, it’s worth researching potential safety hazards so that you can avoid complications:
Change the battery.
Change the oil.
Change your spark plugs.
Replace tail lights or headlights.
Swap out windshield wipers.
Methodology
Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
$100,000 bodily injury liability per person
$300,000 bodily injury liability per accident
$50,000 property damage liability per accident
$100,000 uninsured motorist bodily injury per person
$300,000 uninsured motorist bodily injury per accident
$500 collision deductible
$500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Age: Rates were calculated by evaluating our base profile with age 18 (base: 40 years) applied. The 18-year-old driver on their own policy is a renter. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.
The Federal Reserve (Fed) on Wednesday raised the federal funds rate by another 75 basis points, to 2.25%-2.50%, delivering what was expected by most investors and economists in recent weeks.
Designed to control persistent inflation, the decision comes amid slowing home sale velocity, as the housing sector is particularly interest-rate sensitive.
“Recent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low,” the Federal Open Markets Committee said in a statement Wednesday afternoon.
To stimulate economic activity during the COVID-19 pandemic, the Fed maintained the federal funds’ rates at 0%-0.25% between March 2020 and March 2022, when it started a tightening monetary policy to slow inflation.
So far, it has resulted in a cumulative 225 bps hike: 25 bps in March, 50 bps in May, 75 bps in June, a hike not seen since 1994, and today’s 75 bps.
It brought rates back to the level of December 2018 – and marked an end to the easy money that gave rise to the hottest mortgage market in U.S. history.
Prioritizing home equity solutions in a rising rate environment
The 2022 housing market has been underscored by interest rate spikes and refi decline and lenders are working hard to adjust to new borrower trends. HousingWire recently spoke with Barry Coffin about the ways lenders can capitalize on these trends by revving up their home equity solutions.
Presented by: ServiceLink
Surging prices drive the Fed. Inflation in the U.S. hit 9.1% in June, the highest level in 40 years, the Bureau of Labor Statistics reported on July 13. By then, the news raised the specter that the Fed would raise the benchmark rate by 75 or even 100 basis points today.
“Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures,” the FOMC said. “Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity.”
On Thursday, gross domestic product data will be released, and observers believe it will show that the U.S. economy grew marginally or shrank again in the second quarter, which many economists say officially marks a recession. The Biden administration has argued that two consecutive quarters of negative GDP does not constitute a recession.
Fed Chairman Jerome Powell echoed the administration’s talking points during a news conference following the committee meeting. “I do not think the U.S. is currently in a recession, and the reason is too many areas of the economy are performing,” he said, citing the strong labor market as an example. According to Powell, the Fed is trying to do “just the right amount (of interest hikes). We’re not trying to have a recession.”
Looking forward, Powell said the pace of new rate hikes will continue to depend on the incoming data and evolving outlook for the economy as “these are not normal times and there’s significantly more uncertainty now.”
“While another unusually large increase could be appropriate at our next meeting, that’s a decision that will depend on the data we get between now and then,” Powell said.
In the housing market, the tightening monetary policy has brought volatility to mortgage rates. According to the latest MMS survey from Freddie Mac, after jumping 20 basis points in the previous week to 5.50%, purchase mortgage rates increased last week to 5.54%.
This has reduced the number of sales and cooled housing prices.
Sales of new single-family houses in June fell 8.1% from May, to 590,000 at a seasonally adjusted annual rate, the U.S. Census Bureau and the Department of Housing and Urban Development reported on Tuesday. Pending home sales also fell 8.6% in June from the prior month, according to data released by the National Association of Realtors on Wednesday.
Although price cuts and contract cancelations are increasing, home prices have remained stubbornly high in housing markets across the country.
“Affordability is the biggest issue in the housing market today, and higher rates will make that worse on a monthly basis, even as the Fed does the important work of slowing down price growth,” said Skylar Olsen, Zillow’s chief economist, in a statement.
“Because the housing sector is particularly interest-rate sensitive, it is one of the primary levers through which tighter monetary policy can slow economic activity,” Doug Duncan, chief economist at Fannie Mae, said in a statement. “We continue to forecast slowing home sales through the rest of the year as the Fed continues to raise interest rates and run off its balance sheet.”
Inside: Trade and Travel is a legitimate investing course to learn how to make money in the stock market. See my personal view as a student.
I have been in the personal finance industry for a long time and have watched gurus with CFP and many more designations struggle to make money consistently in the stock market.
There are many concepts on how to trade the stock market.
Teri’s IWT system works.
It’s legit.
I’m a part of her investing course. I have seen the results. $1000 a day club in my LIVE account. Yes.
So, you get to read my Invest with Teri review first.
Teri is able to break down investing into the stock market like no one else I have seen.
You can read a book or blog and find many different concepts that work for them. Then, walk away with your head spinning and quit on the idea of trading and lose a bunch of money along the way. This is why most people leave it to professionals (which is a mistake with that pesky 1% asset management fee).
The Invest with Teri Method is a 7 Step Process that simplifies how to invest in the stock market.
She goes into detail on each of the seven steps to make sure you pick the right companies, limit your risk, know when to buy, and when to take profit.
Plus you have access to a private Facebook group and countless hours of coaching calls to really understand the IWT method.
This is how I am choosing to finance the life I want.
Okay, now that we got that out of the way… let’s dig into the details of the Invest with Teri review and learn how to travel and travel.
This is what you want? Right?
Make more money and have more time freedom.
Enough sitting on the sidelines… read this IWT review and then sign up today.
Honestly, if you have any money in the stock market, you need to take this course to understand the fundamentals.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
What Are Online Stock Trading Classes?
If you’re interested in taking stock trading classes, there are a few things to consider before jumping into the world of investing. Stock trading is an investment that can be profitable if done correctly and is a way to grow your money.
Stock trading courses are a great way for newcomers to learn about the stock market. Also, courses are fantastic for those who want to refine their investing skills or maybe stop the bleed of money from trying on their own.
The Invest with Teri Ijeoma course provides a more structured learning path and can help you avoid some of the common mistakes made by novice traders.
In order to get the most out of a stock trading course, it is important to find one that matches your individual needs and goals. Plus one that can offer support and guidance because learning to trade is a learning curve.
Who Should Take Stock Trading Classes?
It is possible to learn the ins and outs of stock trading on your own without taking any classes.
However, for those who want a more structured learning experience, or for those who want to have access to a community of traders, stock trading classes can be a great option.
Taking stock trading classes can be a great idea for people who are interested in getting into the industry. The stock market is one of the most popular industries to get involved with, so it is likely that you’ll want to pursue a side hustle that may lead to a career in this field.
There are many different types of stock trading classes available, so it is important to do your research and find the one that best suits your needs.
Even if you are an index fund investor doing it on your own, this investing class is great knowledge to understand how the market works beyond “I hope it keeps going up.”
Must Read: How To Invest In Stocks For Beginners: Investing Made Easy
Trade and Travel 2.0
Right now, Teri and the rest of her coaches are doing a MAJOR overhaul on the signature course.
Her design team is currently working really hard to create an updated look and feel so you can experience Trade and Travel even better than before.
However, there will be changes – some we know about and some we don’t.
What we Know Today:
A significant Price increase happened (like double to $10k)
Shorting and gaps will be included in the main Trade and Travel course.
Limited time support on coaching calls. (However, a subscription model for additional coaching will be available.)
What You’ll Learn in the Trade and Travel 1.0 Course
The Trade and Travel course is an online course that will teach you everything you need to know about the world of trading, and more!
First of all, Invest with Teri along with Trade and Travel are used interchangeably. They are both the same AMAZING course that will teach you to make money in the stock market.
You will learn the Teri Ijeoma trading strategy.
The Invest with Teri 1.0 course is divided into two sections:
Travel & Travel – This is the basic course to understand fundamentals and to learn how to make money as the stock market goes up.
VIP Program – This is an advanced course that covers shorting, gaps, and options.
The great news… you can start with the basic Trade & Travel program and upgrade to VIP at a later date.
If any of this sounds foreign to you, Teri is one of the best teachers I have ever met. She breaks break down investing in the stock market like no one else I have seen. She is able to take difficult concepts and make them easy.
Simply put, Teri offers a course that teaches you everything you need to know about investing.
Later, in this Invest with Teri review, I will detail the difference between the two courses and what you will learn.
Teri’s Purpose of Trade and Travel – Financial Independence
The purpose of the course is to help students learn how to generate wealth.
Students can use the extra income earned from the course to supplement their income, pay off debt, or save so they can solidify their financial independence.
There is no doubt that in order to achieve financial independence, you need to invest in yourself. This means learning new skills, working on your mindset, and making smart choices with your money.
With a positive attitude and a determined spirit, anything is possible!
Want to Learn More about Investing?
How do you trade with Teri?
The privilege to have one-on-one coaching with Teri herself is very rare. However, she is known to offer group mastermind sessions for her VIP students.
So, in order to trade with Teri, you must enroll in the full $5000 course and wait for the next opportunity to trade with her.
Trade And Travel Program
The Trade and Travel program is the fundamental part of the investing course. This section will teach you the basics of the stock market and how to make money on the way up.
Teri’s trading strategies focus on risk management and she has seen many of her students achieve success with trading.
To be upfront in this Trade and Travel review, you will learn:
Learn how to pick stocks
Understand how the stock market works and how you can make money off it
Recognize why risk management is the most important aspect of trading
Understanding how to read charts
Learn the best places to buy and sell a stock could be
Be able to tell the story of the candles
Understand if your stock trade has a strong likelihood of being profitable
Determine how many stocks to buy based on your risk tolerance
How to place a trade at your brokerage
Manage your trade and exit based on your trading plan
That is a highlight of what you will learn in the basic Trade and Travel program.
Trade And Travel VIP Investor Program
The VIP program is the advanced piece of the course once you learn the fundamentals of the Trade and Travel program.
For those looking to upgrade to the VIP program, you will learn:
Make money when the market goes down.
How does shorting the stock work
When to look for gaps and what they mean
What is globex?
Options! This is everyone’s favorite part of the course!
Understand how to make money with option contracts
Risk management with options
Plus so much more!
Plus you can rewatch all of the curriculum and coaching calls over and over until you get it. That aha moment!
Both Travel & Travel and VIP offer live zoom training each week. Plus there is a vault of recording coaching calls to review.
Supportive Trading Community
Teri has built a supportive trading community of fellow students who have gone through the course.
Each trade cuzzin offers encouragement, advice, moral support, and feedback to each other.
This supportive community can help people overcome their anxiety and doubts when trading and investing.
You can find this supportive community on Facebook groups, Telegram groups, Clubhouse clubs, local meetups in your city, and people have connected to create a mastermind group. Honestly, there are plenty of people available to make sure you are successful on your journey.
Don’t forget… There are weekly live calls and chart parties.
This is how many people have turned 10k into 100k.
My Personal Trade and Travel Reviews
This is one of the best educations I have received.
My biggest regret is that I did not enroll in the course sooner (same as the time before I upgraded to VIP).
In all honesty, this course is a better education than spending hundreds of thousands on a college degree.
Personally, I meet Teri during FINCON, a huge conference for personal finance content creators and brands.
I loved how Teri spoke during her presentation and quickly reached out to learn more about her Invest with Teri course. Also, I was intrigued by the $1000 in a day club.
As always, I investigate every single company or platform that I recommend.
Obviously, this course has an eye-shocking price tag when you first see it. However, once you start earning your money back, you quickly realize how undervalued her course is.
As I always tell my readers… if I wouldn’t put my time, energy, or money on the line, then I am not going to tell you about it. I will only recommend products, services, and courses only that I truly know that work.
My View as a Trade and Travel Student
After a few months of debate if I could afford to spend the money on this investment course…
I became a Trade and Travel student in February 2021.
As outlined above, the course is jam-packed with information. I thought with my background in personal finance I would have a leg up over the others. However, I quickly learned that I need to view the stock market from Teri’s point of view and put blinders on to others’ opinions or styles of trading.
There are a ton of ways to make money in the stock market. This is one of them.
You can google and probably find many more investment courses and rabbit holes to follow. Investing is one of the most popular Reddit Personal finance topics. People want to learn to trade and most are looking to be fed information.
You have heard that saying, “teach a man to fish and he will never go hungry.”
The same holds true for completing this course, “Teach a trader to make money and you will be more profitable than your dreams.”
The best thing about life is you get to decide what you want to do, spend your time, and budget your money. Investing in this course is a big pill to swallow and I get it. However, I would not be so adamant about telling others about this course since I see a path for people to stop the stress with money.
I am successful with trading. Now, it is your turn to become successful.
This is by far the best investing course I have ever seen. 1000% recommended by me personally.
$1,000 In A Day Club
Here is proof. I made the $1k club in my live account and $10K in SIM.
I am a part of the trading community.
What exactly is the $1000 in a day club?
This exclusive club is for those traders who have made over $1k in a day.
Many IWT traders have received this plaque and part of this $1000 in a day club.
If you want to invest money and make $1000 a day this is how to start.
This is how I am choosing to finance the life I want.
Get one step closer to reaching your dreams and financing your life!
How Long Does It Take to Learn to Trade Stocks?
The time it takes to learn how to trade stocks depends on your personal learning style.
It typically takes 2 to 3 years to learn how to trade stocks.
By taking an in-depth course, you can shorten your learning curve.
Teri’s Approach to Learning to Trade Stocks
More importantly, the results you see trading stocks will depend on the effort put in to learn the curriculum, manage the trade, minimize your risk, and prepare your mindset.
Teri’s goal for her student is to earn 1% of our capital consistently.
This is not a get-rich-quick scheme. You have to put in the hard work to reap the benefits (aka profit).
For example, some people learn better by reading and others prefer watching videos. Some people may find that they learn best by following an instructor in a live trading room.
Who is Teri Ijeoma?
How many years of trading experience does Teri have?
Teri Ijeoma has over 10 years of trading experience.
Once she left her job as an elementary school assistant principal, she took off to travel the world. Those around her started asking questions and she taught her first group of students in Thailand.
Teri enjoys enlightening people on investing strategies and is passionate about building wealth.
Combining her trading experience with her teacher background, Teri is a talented educator in the investing world.
Teri has been featured on Forbes, NBC, CBS, ABC, Black Enterprise, Yahoo Finance, Business Insider, Fox News, Comcast – just to name a few!
She thrives by teaching others how to invest, so they can afford the life of their dreams.
Teri has made significant amounts of money through trading and is motivated by helping others achieve success.
Check out Teri discussing her $1,000,000 in a day profit. Yes, one million dollars in a day!
I’m scared to lose my real money trading. Can I still take the course?
Don’t want to risk your money, but are curious?
You can practice in a simulated account before you move to real money. Then, you can make mistakes. Learn from those mistakes. Understand how the stock market moves. Make wins.
The bottom line you can make real money in the stock market. You just have to be armed with knowledge and a trading system that works.
That is why most people lose money in the stock market! They don’t understand how the stock market works. They have poor risk management strategies and tend to select the wrong companies to trade with.
In the Trade and Travel course, you will walk away with so much investment knowledge and support from other people in the course to be successful.
Afraid to trade individual stocks? Teri’s process works with ETFs too!
Is Invest with Teri Reviews Reddit? Is this a scam?
As with any popular r/personalfinance thread, this is one that comes up often…is Invest with Teri legit?
There is a lot of mixed information on the web when it comes to Invest with Teri.
Some people have had great experiences and made a lot of money, while others have had negative experiences and lost money.
Since I have been forthcoming that I am a student of her course, I would recommend active trading as a way to supplement your income.
However, you must be willing to put in the time and effort to see the results.
And honestly, that is where most people give up because you must put in the effort.
At Invest With Teri, they believe anyone can learn how to invest and generate income through investment. They offer a variety of courses on how to invest, as well as a community of support to help you get started.
Their program has helped people from all backgrounds achieve their financial goals.
Did this Trade and Travel Review Convince You?
Teri Ijeoma is a millionaire trader and coach who shares her tips and tricks for success.
Trading is a skill that can be learned, and with the right education, anyone can do it successfully.
Trading is not a get-rich-quick scheme – it takes time and effort to learn.
Don’t waste your time or money on being a self-taught trader. Take a course from an expert.
I am part of this trading community and so excited to be a trade cuz!
Start building another income stream for yourself.
Invest with Teri Ijeoma teaches you how to make a lot more money than you currently are. Very possibly, trading can help you replace your current income or even exceed it
To be successful, you need to invest in this investing course, develop a solid trading plan and stick to it.
Get one step closer to reaching your dreams and financing your life!
Be the first to know when Teri releases a coupon code for her Invest with Teri course.
Do you have an Invest with Teri Coupon?
It is VERY rare that Teri puts out a coupon code.
However, if she does, I always notify my email list who have been on the fence about enrolling.
Typically, these coupon codes are valid for a limited time only.
Trade and Travel FAQs
Obviously, you are doing your due diligence before enrolling in this course, which I completely understand. I did too! I spent a lot of time researching prior to enrolling in this course.
Here are answers to the most asked questions about Invest with Teri, Trade and Travel, VIP program, as well as Teri Ijeoma.
Is the Trade and Travel course for new investors?
Yes, the Trade and Travel course is for both new investors and experienced investors.
Honestly, you are more likely to lose money in the stock market by trading on your own rather than spending money on the best investing course available.
The course is designed for everyone, regardless of experience level.
There are different courses available within the program for more advanced students (like shorting and options).
How long does the program take to complete?
You can complete the course within a weekend if you binged watch everything.
However, it takes 8 weeks to thoroughly go through the curriculum.
The main Trade and Travel course is broken down into sections, and modules include videos, tutorials, pdf worksheets, quizzes, and more.
The course instructor, Teri Ijeoma, estimates that it will take 8 weeks to complete the online course material before you begin trading.
In addition, there are plenty of coaching calls, which are filled with gems of information that you can watch.
This investing course is much like obtaining a college degree. The more you study, the better results you will have.
What will I learn in Invest with Teri course?
You will learn how to trade stocks and options based on her Invest with Teri method.
This is a solid, effective investing strategy.
Learning how to effectively trade stocks and make 1% consistently is the goal. This is higher than the market returns on any given day.
How much does Teri ijeoma course cost?
The cost of the Trade and Travel 2.0 course is $10000.
In addition, there is a payment plan available that allows you to pay in installments which is a great option without interest or hidden fees.
Honestly, this investing course is undervalued given the amount of knowledge you will gain.
Is there a payment plan?
Yes, there is a payment plan.
This is a great way to invest in the program with an affordable payment plan based on what you can pay today.
Right now, you can start the course with Payment Plans as LOW as $208/Month.
Can I purchase the Trade and Travel course and upgrade to the VIP program later?
Yes, you can always upgrade to VIP and pay the $2,500 difference. This is something you can do at any time.
I purchased the course to learn the basics and when I made money to pay for the VIP course I upgraded. Many students have done the same.
My gem of advice… eventually, you need to upgrade to VIP to fully understand the chart analysis as well as make money on the way down.
How much money do I need to start trading?
Many students start with $500.
This question is very difficult to answer because it depends on your personal finance situation and the type of trading you want to do.
The best advice is to start small and grow your account.
Trading stocks and options come with risk as such you must recognize that it is possible to lose all of your trading money.
Personally, I recommend starting with the amount you are comfortable losing. For me, I started with $3000.
Again, you do not need a lot of money to start trading. Check out this interview with Chris Calvin (aka Trade with Coach). He started with $500 and quickly grew it to 5 figures!
What trading platform does Teri Ijeoma use?
In her Trade and Travel course, she reveals which brokerages she has used in the past.
Right now, she is known to use Tradestation.
Recently, in her 5 Day Take the Trade Live Challenge, she set up a brokerage account with TD Ameritrade.
Do I have to attend coaching calls live?
You don’t have to attend coaching calls live. Also, all of the live trainings are recorded except the weekly Trade and Travel Q&A.
By attending a live coaching call, you have the opportunity to ask questions and get help from the instructor.
You can access the class recordings at your convenience once the coaching call is uploaded.
Personally, I attend the VIP coaching calls live to get the best out of the experience.
Remember, if you miss a class, you can always watch the recording later. You will have lifetime access to the coaching call recordings.
How long do you have access to the curriculum?
LIFETIME ACCESS!
You will have lifetime access to the curriculum.
That is pretty amazing to have these resources available forever.
You can review the curriculum as many times as you like.
Personally, I have gone back and reviewed many modules and coaching calls again (and again).
Is there a Facebook group? How long do you have access?
In fact, there are two Facebook groups for students that are run by the IWT coaching staff.
One Facebook group focuses on the general IWT method and the other is specific to VIP strategies.
In addition, there is a Trade and Travel sponsored Telegram group.
These Facebook groups are a great way to connect with other students and to learn from each other.
You have access to the group for as long as you are enrolled in the course.
What’s Teri’s Instagram handle?
First of all, there are so many fake accounts for Teri Ijeoma, Invest with Teri and the Trade and Travel Course.
Teri’s real account is @teriijeoma
Beware of imposters accounts and scams.
Can I share my course log-in information with others?
No, this is not allowed.
Each person should purchase the course separately.
The only exception is you can share with your spouse.
What is the refund policy?
According to their policy, refunds are not available for any of their courses. (You can read that here).
However, they do not want unhappy students or I don’t want unhappy trading cuz.
So, if you need additional assistance, reach out to their support team at [email protected] and one of the fabulous coaches will assist you.
Honestly, this makes 100% sense as a student. There is so much knowledge and information in the course that it is not surprising.
If you truly put in the time and effort, you will see success. You have to put in the work though.
Just a reminder… trading is a risky investment if you don’t know what you are doing. You can lose money in the stock market.
Know someone else that needs this, too? Then, please share!!
With all the seesaw movement in the first eight months of 2022, I wanted to throw out some mortgage rate predictions for the rest of the year.
Note that these are just my predictions, and subject to being completely wrong. Or with any luck, maybe right, as I’m feeling slightly optimistic.
The 30-year fixed averaged 5.30% in the latest week, per Freddie Mac’s most recent weekly survey.
It was down from 5.54% a week earlier (a large amount over seven days) as the Fed indicated the worst of its own rate rises might be behind us.
There’s also talk of a looming (or present) recession, which generally leads to lower interest rates.
Mortgage Rates Could Fall Back Into the 4% Range Later This Year
While the first half of 2022 was the worst (or one of the worst) on record for mortgage rates, the second half could be pretty good.
I say pretty good because it’s hard (basically impossible) to erase all the increases seen during the first six months.
After all, 30-year fixed mortgage rates essentially doubled before beginning to fall significantly in the latest week.
So it’s going to take a lot, too much really, for rates to return to those levels.
And I’m not going to tell you how high rates were in the 1980s versus now! No one cares. All that matters is present day.
Now some good news. While there have been some ebbs and flows in 2022, the recent downward movement has actually been substantial.
In fact, there might be enough pullback to get some homeowners back in the refinanceable population.
This would be great news for those looking for a lower rate, and welcome news for mortgage lenders, which have seen applications plunge in recent months.
It could spare additional mortgage layoffs if staff are able to ramp up production during these last five months of the year.
Will We See an Uptick in Refinance Candidates?
Per the latest monthly Mortgage Monitor from Black Knight, there were fewer than 500,000 refinance candidates left as of June 2022.
At the start of 2022, there were about 11 million, with the all-important cohort falling about 95% year-to-date.
In just an 18-month span, refi candidates went from an all-time high to the lowest total since the turn of the century.
This obviously wreaked havoc on the mortgage industry, leading to lots of layoffs, whether they made the news or not.
It has also made it very difficult for some mortgage lenders to stay afloat, seeing that 2021 was a record year.
Assuming mortgage rates are able to reverse course, it could be a boon for struggling lenders, at least temporarily.
As you can see from the chart above, the few refinance candidates remaining have mortgages that were originated in the early 2000s.
In other words, they probably aren’t going to refinance if they haven’t already, or as Black Knight points out, “restart the clock on a 30-year commitment.”
After all, they could be 20 years into a 30-year payoff, so it would make little sense to refinance in most situations.
Where I See Mortgage Rates Going in the Second Half of 2022
I believe the recent downward movement in mortgage rates is meaningful, and perhaps the start of something even bigger.
Similar to the spike in gas prices in early summer, which have since fallen, mortgage rates may have overshot their mark and are now trending lower.
That means the 30-year fixed could fall back into the high 4% range or even lower during the rest of 2022.
But like gas prices, mortgage rates will remain well above levels seen back in January, when the 30-year fixed averaged about 3.25%.
This means the recent pullback, and potential larger improvement in mortgage rates, will likely only benefit new home buyers and select others.
For example, those who purchased a home recently when mortgage rates peaked might be able to apply for a rate and term refinance and shave 1% off their existing rate.
Meanwhile, those who obtained mortgages from 2019-2021 likely wouldn’t benefit from a refinance in most situations.
The exception could be those who had poor credit or a high LTV at the time of origination, and will now be able to refinance to a better rate.
Either way, any improvement in mortgage rates will be a boon for the fraught mortgage industry.
How low they go is another question, but I wouldn’t be surprised to see rates back in the mid-4% range at some point this year.
As noted in another post, mortgage rates are lowest in December on average, so we could see them march lower and lower over the next five months.
Similar to gas, rates tend to be highest in late spring and early summer, then drift lower in the fall and winter months.
This means a refinance or home purchase could make a lot of sense this holiday season, especially if home prices fall and demand wanes.
A smaller chance of a bidding war, a lower listing price, and a markedly better mortgage rate sounds like a winning combination.
Any Mortgage Rate Retreat Could Be Short-Lived
While I do believe mortgage rates will get even better as the months go on, the mortgage rate rally could easily reverse course in 2023.
At some point, the Fed’s unwinding of its enormous stable of mortgage-backed securities (MBS) will have to take place. And they’ll need to get more aggressive in doing that.
Even with a looming or current recession, along with a possible economic downturn, the unleashing of hundreds of billions in MBS could cause mortgage rates to shoot back up.
This means the second half of 2022 could wind up being a sweet spot for mortgage rates in the long run.
It might be one of the last chances to get a 4% 30-year fixed rate before they resume their climb and find themselves back in a 5-6% range or even higher.
So if you do have a mortgage rate in the 5-6% range, or you went with an adjustable-rate mortgage to save some money, be sure to keep a close eye on developments over the next few months.
It might be possible to snag a more desirable rate in October, November, or December before they potentially rise again.
Yet another year is about to come to an end, and that means it’s time to look ahead to what next year has in store.
I think just about everyone wants to see the back of 2020, though it wasn’t all bad news.
The housing market actually held up surprisingly well, and mortgage lenders enjoyed record mortgage originations.
Anyway, without further ado, here are the “2021 mortgage rate predictions” from a number of major mortgage and real estate groups, along with my own outlook.
MBA 2021 Mortgage Rate Prediction
First quarter 2021: 3.1% Second quarter 2021: 3.1% Third quarter 2021: 3.2% Fourth quarter 2021: 3.3%
Like in past years, we’ll begin with a prediction from the Mortgage Bankers Association (MBA).
They publish a monthly Mortgage Finance Forecast that includes predictions for 30-year fixed mortgage rates on a quarterly and annual basis, with rates all the way to 2023.
We’ll focus on the 2021 numbers and throw in 2022 for good measure.
As you can see, the MBA expects the 30-year fixed to remain relatively flat in the first half of 2021, before rising ever so slightly in the second half.
Their quarterly average for the 30-year fixed is 3% flat for the fourth quarter of 2020, so the 3.1% average would also represent a slight increase.
They expect mortgage rates to rise to 3.6% in 2022, which is a more significant increase that homeowners would actually notice and likely disapprove of.
For the record, the MBA anticipated 30-year fixed rates in the 3.7% range for all of 2020, so they missed the mark pretty badly a year ago.
Fannie Mae 2021 Mortgage Rate Prediction
First quarter 2021: 2.8% Second quarter 2021: 2.8% Third quarter 2021: 2.8% Fourth quarter 2021: 2.8%
Now let’s turn to Fannie Mae, which predicted the 30-year fixed to average between 3.5% and 3.6% for all of 2020. Hopefully they’ll be a little more accurate in 2021.
They seem to be playing it as safe as possible for the coming year, forecasting a 2.8% 30-year fixed mortgage rate for all four quarters.
Not only do they not see it changing throughout 2021, they also don’t see it changing from the fourth quarter of 2020.
Their 30-year fixed rate is currently set at 2.8%, per their latest monthly Housing Forecast, so if they’re right, homeowners and prospective home buyers will continue to enjoy record low mortgage rates for another year.
Their 2022 prediction is also super steady, with the 30-year fixed only expected to rise 10 basis points to 2.9%. I’m sure everyone out there would be okay with that.
Freddie Mac 2021 Mortgage Rate Prediction
First quarter 2021: 3% Second quarter 2021: 3% Third quarter 2021: 3% Fourth quarter 2021: 3%
Next up is Fannie’s brother Freddie Mac, which is also in the prediction game. Last year, they pegged the 30-year fixed at 3.8% for the entire year. That made them the most pessimistic of the bunch.
Will they be a little more positive this year or chase their bad prediction with another one?
The answer is yes and no, though they’re still being sticklers and keeping the 30-year fixed out of the 2% range.
As to why, they believe the Federal Reserve will keep its key monetary rate low until the broader economic outlook improves and inflation rises, which at the moment doesn’t appear to be happening any time soon.
All in all, their forecast is as boring as they come, with mortgage rates forecast to remain unchanged at 3% from the third quarter of 2020 through the end of 2021.
They don’t provide a 2022 forecast, so it’s unclear when they believe the mortgage rate party will finally come to an end.
Realtor 2021 Mortgage Rate Prediction
First quarter 2021: 2.9% Second quarter 2021: 3% Third quarter 2021: 3.1% Fourth quarter 2021: 3.2%
Next we’ve got a prediction from the National Association of Realtors, specifically from NAR chief economist Danielle Hale.
Last year, they expected the 30-year fixed to approach 4% around this time, but now they’re playing it a bit safer.
The Realtor.com 2021 Forecast calls for a 30-year fixed averaging 3.2% throughout the year before closing out at 3.4%.
Meanwhile, their U.S. Economic Outlook from November 2020 is a bit brighter, as seen above.
That’s the highest rate prediction in the survey, and well above the 2.71% average rate for a 30-year fixed at the moment.
They tend to the gloomiest predictor each year, so this isn’t a surprise. Remember, the fear of rising interest rates is a great motivator to perhaps, buy a home…
NAR sees existing homes sales rising 7% from 2020, and the median sales price climbing 5.7%, which means “sellers will get top dollar as buyers struggle with affordability.”
CoreLogic Forecasting Low Rates Through 2023
Another mortgage company that focuses entirely on housing market data, CoreLogic, sees 2021 being another fantastic year for mortgage rates.
In fact, they believe interest rates will remain pretty close to current levels through 2023. In other words, you’ve got time to buy a home or refinance your mortgage.
While they don’t provide a quarter-by-quarter analysis, they did say they expect “30-year fixed-rate loans to remain below 3% during early 2021 and average about 3.2% during the next three years.”
Simply put, flat rates in 2021 with some gentle rising seen over the next few years, but certainly nothing to fear.
Zillow Sees 2021 Mortgage Rates Staying Put
While Zillow didn’t provide specific numbers, they seem to be of the mind that mortgage rates are going nowhere fast.
In their latest Market Pulse from December 11th, author Matthew Speakman said, “Absent a monumental shift in the economic outlook – for instance, if a much larger-than-expected fiscal relief package is passed – mortgage rates are unlikely to head meaningfully higher anytime soon.”
That means they should continue to hover near record lows for the foreseeable future.
He also noted that lender risk appetite has increased, so borrowers who need more unconventional home loan financing may be in luck.
Zillow expects home values to rise another 7.9% over the next 12 months, which is excellent news for existing homeowners, but more bad news for renters and first-time home buyers wanting to find a permanent residence.
The Truth’s 2021 Mortgage Rate Forecast
Finally, I’ll throw my hat in the ring and make a prediction myself, as I have in years’ past.
A year ago, I said mortgage rates would be mostly flat, which wasn’t the case. They fell almost exactly one percentage point from around 3.75% to 2.71% today.
Of course, I did say there would be opportunities throughout 2020 due to hot-button issues like the election and Brexit, which still aren’t 100% clear now.
I also said it was possible we’d see new record lows this year, which we did. At last count, 14 new record lows.
So what do I think 2021 has in store? Well, I certainly think there are plenty of potential catalysts that could drive mortgage rates even lower than they are today.
While it does get tougher to break new record lows these days, with rates running out of room to fall, it’s still possible things could get even better.
Of course, most of these recent record lows have been mere basis points, including one literal one-basis point move from 2.72% to 2.71%. That wouldn’t even register for most mortgage lenders.
Still, that doesn’t mean more substantial interest rate improvements aren’t in the cards.
If my data regarding a Democrat challenger winning the presidential election holds true, we could see lower mortgage rates both in February after the inauguration and at year-end.
However, as I’ve said in past years, I expect rates to ebb and flow as they always do. That means depending on what time of the year you look, rates could be higher, lower, or just plain flat compared to 2020.
All in all, I don’t expect nearly as much movement this year as last, but I do see one or two new record lows at some point.
There’s just too much unsettled business out there still, including Brexit, COVID-19, and the U.S. presidential election.
All that uncertainty and potential bad news has the ability to push mortgage rates to new all-time lows.
And remember, when mortgage lenders aren’t as busy they have a tendency to lower rates to attract more business.
When they inevitably see loan volume drop from record levels in 2020, that exact scenario could play out.
By Peter Anderson10 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited November 6, 2018.
A while back I wrote an article about 401k loans and taking early withdrawals from your retirement account. I talked about the penalties you could face, and explained why I think it’s a bad idea.
This week I was reading some economic news and came upon an article on Reuters.com that gives a startling statistic – that nearly a quarter of Fidelity’s 401(k) accounts have a loan against them.
A record number of U.S. workers are tapping into their retirement accounts to make it through the economic downturn, Fidelity Investments found in a survey released on Friday.
Among the 11 million workers whose 401(k) plans are run by Fidelity, 11 percent took out a loan from their plan during the 12 months ended June 30, the company said, up from 9 percent at the same point a year earlier.
By the end of the second quarter, plan participants with loans outstanding against their 401(k) accounts had reached 22 percent versus 20 percent a year earlier.
To me it’s crazy that of the 11 million 401(k) plans being run by Fidelity, almost 2.5 million of them have outstanding loans. Do all these people realize the penalties they could face if they lose their job and have to repay it immediately? Or is this just a sign that times are tough, and a continuing indicator that people aren’t planning ahead for emergencies, and are living in the now?
During the quarter, 2.2 pct of Fidelity’s active 401(k) participants took a hardship withdrawal, up from 2 percent a year earlier, and another peak, Fidelity said.
Often those withdrawals were used to prevent foreclosure on a home or pay college tuition.
“People have been looking to their 401(k) plans as a source of relief to help them meet financial hardships,” said Beth McHugh, a Fidelity vice president who oversees the area. “For many individuals that is their primary savings vehicle.”
Loans and withdrawals were highest among workers between 35 to 55 years old, Fidelity found, peak earnings years.
So more people are taking out loans and hardship withdrawals from their 401(k) than ever before.
Fidelity found signs of continued thrift in the workforce. The average percentage of salary saved in a 401(k) held steady at 8 percent, similar to the rate in the first quarter, while 32 percent saved 10 percent or more of their pay.
But the rising rates of loans and withdrawals show more people have turned to their savings to cover basic expenses, McHugh said. She added that second-quarter rates tend to be higher as parents look for ways to cover college tuition.
The good news is that they do see people continuing to save money in their 401(k), but in the end many of them are turning to their retirement accounts to cover even the basics – and many of them are actually taking 401k loans out to pay for their child’s education. I’d argue that this is a mistake. The child can always take out a loan, get scholarships or do other things to help pay for their own education. But short circuiting your retirement and possible gains by reducing your balance could hurt your later on – you can’t replace those gains and the compounding interest later on!
Why Taking Out A 401k Loan Is A Bad Idea
When taking out a 401k loan, usually you can borrow up to 50% of your vested account balance or $50,000, whichever is less. In most circumstances you have a maximum of five years to repay the loan, unless you are borrowing for a first home, which allows a longer payback.
I’ve written about it more than once on this site, but I think taking out 401k loans is usually a bad idea – only to be done in the worst of circumstances. Unfortunately too many people are using them to just pay off debt, buy a new car, or pay for other wants or needs, instead of taking out a loan with their local bank. Why not pay theirselves interest instead of the bank? There are quite a few good reasons why not.
You May Have To Repay Your 401k Loan Immediately If You Move Jobs Or Are Fired: One thing people don’t consider in this unsure environment is that they could lose their job and end up having to pay back their 401k loan immediately – when they can least afford to. Many plans offer a 60-90 day grace period to repay the loan, but is that really enough on a large loan of thousands of dollars?
Subject To Taxes And Penalties If Not Repaid In Time: If the loan isn’t repaid, there will be a 10% penalty, and federal and state taxes are taken out as well.
If Your Stocks Are Currently Down, You Short Circuit Possibility Of Regaining Stock Value: If you withdrew your money when the market was down, you won’t be able to regain those losses when the market goes back up.
For many people if they find themselves in a situation where they have to repay a loan, and they don’t have the money, they may be better off taking out a loan at a bank to repay the loan – and avoid those penalties and taxes. And because they have to take out a loan with most likely end up paying a higher interest rate.
So what do you think about the high rate of 401k loans, and early withdrawals? Do you think they represent a good opportunity to pay yourself interest, or are the risks associated with them too high? Would you take out a 401k loan to pay for your child’s education? Tell us your thoughts in the comments.
Timeshares may be a fun vacation option for a while, but sometimes people want to end the arrangement. Those time share contracts, however, can seem pretty ironclad.
Whether you want out due to buyer’s remorse, a shift in your financial situation or health, or any other reason, here’s some good news: You’re not necessarily stuck.
If you change your mind soon after the purchase, for instance, you might be able to opt out during the “rescission period.”
Those who have had their timeshare for years can have alternatives, including having the resort take it back or perhaps re-selling it.
There are also what are known as “exit” companies that help timeshare owners get released from their agreements (though it’s important to vet those companies before signing an agreement).
If you’re ready to say goodbye to your vacation place, read on to learn steps for legally getting out of a timeshare contract.
5 Steps to Escaping a Timeshare
If you’re thinking about getting out of a timeshare or know you’re ready to make a change, here are five options to consider.
1. Checking the Rescission Period
If your second thoughts occur within several days of your purchase, you may be able to rescind the transaction if you’re still within the “rescission period.”
If you are, you should be able to get your money back and go on your merry way.
Keep in mind, however, that the rules vary from one state to the next.
Depending on the state where the timeshare is located, rescission periods can be anywhere from three days (the minimum required by the Federal Trade Commission) to two weeks.
In some cases, the rescission period may kick in as soon as you buy the timeshare. In others, it might start when you receive the public offering statement that includes general information about the timeshare.
For a timeshare on an exotic isle somewhere outside the U.S., you’ll need to find out what the laws are there.
If you’re eligible for rescission, you’ll want to follow the instructions in the documents you received when you purchased your timeshare.
Most likely you’ll need to send the resort a letter telling them you want out via rescission for a full refund.
It’s a good idea to send this letter using certified or registered mail.
💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.
2. Contacting the Timeshare Resort
If rescission isn’t possible because too much time has passed, another option you may be able to take advantage of is a “deed back” program.
Also known as “take-back” and “surrender” programs, these programs allow distressed owners to give their timeshares back to the resort developer, often for a fee of a couple of hundred dollars or so.
To find out if your developer offers this type of program, you may want to contact them directly and ask to speak with someone who handles “deed-backs” or “surrenders.”
You can also check online resources like ResponsibleExit.com for information about return programs.
Generally, developers will only go for this if the timeshare is fully paid for, and you’re up to date on your maintenance fees.
Some developers that accept returns may require owners to pay annual fees for a year or two while the resort finds another buyer.
In some cases, you may have to prove financial or medical hardship in order to qualify for a take-back program.
Even if your resort doesn’t have an official take-back program, you have nothing to lose by asking. Who knows; they might go for it.
Recommended: How to Automate Your Finances
3. Reselling The Timeshare Yourself
If you’re considering reselling your timeshare, it’s probably best if you don’t go into it with hopes of making a killing.
There are typically many people looking to unload their timeshares and demand isn’t generally high, unless your property is in a hot destination.
As a result, reselling can often be a losing proposition.
The best approach might be to think of reselling as someone taking the timeshare off your hands and becoming responsible for the fees moving forward, rather than making a profit.
You can list your timeshare on a general resale marketplace site, such as eBay and Craigslist. There are also sites just for timeshares, such as TUG (the website for the Timeshare Users Group) and RedWeek .
💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.
4. Reselling the Timeshare Through a Broker
If you opt to resell your timeshare, another option is to hire a real estate broker or agent who specializes in reselling timeshares.
If you choose this route, however, you’ll want to pick your broker carefully, cautions the Federal Trade Commission (FTC) .
Some real estate brokers and agents who specialize in reselling timeshares may falsely claim the market in your area is hot and that they’re overwhelmed with buyer requests.
They may even tell you that they already have buyers ready to purchase your timeshare, or promise to sell your timeshare within a specific time.
It’s wise to be skeptical of all such claims, says the FTC, and also to vet the reseller before agreeing to anything on the phone or in writing.
A good safeguard is to contact the state Attorney General and local consumer protection agencies in the state where the reseller is located, and ask if any complaints are on file. You also can search online for complaints.
You may also want to ask the reselling agency if their agents are licensed to sell real estate where your timeshare is located. If they say they are, you may want to verify it with the state’s Real Estate Commission.
Recommended: How to Manage Your Money Better
Other questions you may want to ask before hiring a reselling agent:
• How do you plan to advertise and promote the timeshare unit?
• Will I get progress reports and, if so, how often?
• What fees do you charge, and when do they have to be paid?
It’s generally preferable to do business with a reseller that takes its fee (or commission) only after the timeshare is sold.
If you must pay a fee in advance, however, it’s wise to ask about refunds, and to get all refund policies and promises in writing.
💡 Quick Tip: If you’re creating a budget, try the 50/30/20 budget rule. Allocate 50% of your after-tax income to the “needs” of life, like living expenses and debt. Spend 30% on wants, and then save the remaining 20% towards saving for your long-term goals.
5. Hiring a Timeshare Exit Company
The concept is good. With a timeshare exit company you often get a small army to handle your business.
A good one knows the inner workings of the timeshare industry, which could be advantageous to you.
One major caveat is that these services generally don’t come cheap–prices vary considerably, but can be as high as $4,500.
It’s also important to be aware that there are many bad apples out there. There have been numerous lawsuits against timeshare exit companies that backed out of their payment agreements with customers.
To help ensure that an exit company you’re thinking about hiring is reputable, you may want to check with the Better Business Bureau, and also search online, to see if there have been complaints about the company and (most importantly) how they have handled those complaints.
You can also protect yourself by refusing to make any payments before a contract has been signed by both parties.
Recommended: 5 Reasons to Switch Banks
The Takeaway
Unloading a timeshare property isn’t always easy, but some of your exit options include: backing out during the “rescission period,” reselling it yourself, hiring a broker to resell it for you, and hiring a timeshare exit company to take care of the whole separation process.
It’s important to understand all of your options (and the potential pitfalls of each) in order to choose the best solution for your situation.
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SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances. Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners. This article is not intended to be legal advice. Please consult an attorney for advice. SOBK0523039U
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