If you’re ready to shop for a new home, a mortgage preapproval letter shows sellers that you’re a serious buyer who can secure financing from a lender. It also gives you a clear idea of how much you may be eligible to borrow.
To show lenders that you’re a qualified borrower, you’ll need personal identification, pay stubs, bank account statements, a list of your monthly debts, tax returns, W-2 statements and information about your down payment. You’ll also need to submit to a credit check. Most lenders require a credit score of at least 620 for a conventional mortgage, but a higher score will increase your chances of getting preapproved and can lead to lower rate offers.
The lender may also verify your history of making your rent or mortgage payments on time. Depending on whether the lender has additional questions and how much of its preapproval process is automated, accepted borrowers can expect to receive a preapproval letter anywhere from a few hours to a few days after applying.
Even if you have all of the required documentation and a qualifying credit score, don’t take the application process for granted. Lenders will be scrutinizing your financial readiness. Avoiding potential pitfalls will help keep your homebuying goal on track.
Don’t take on any new debts or lines of credit
Lenders want to see that your finances are stable, including your obligations to creditors. Avoid making large purchases on credit or opening additional credit lines, including new credit cards.
“Making large purchases, such as buying a car or expensive furniture on credit, can significantly impact your debt-to-income ratio” says Matt Vernon, head of consumer lending at Bank of America in Charlotte, North Carolina. “By taking on more debt before obtaining preapproval, you could potentially exceed the debt-to-income ratio threshold that lenders are comfortable with, making it harder to qualify for the mortgage amount you need or to obtain favorable terms.”
Don’t create job or income instability
“Lenders prefer borrowers with stable employment and income histories because they view them as less risky,” says Vernon. He adds that changing jobs or having irregular streams of income can alarm lenders and jeopardize your application, even if your income is higher as a result.
If your income fluctuates or is unpredictable — for instance, if you’re in a commission-based role or self-employed — you will also need to demonstrate that your earnings are consistent enough to make your monthly mortgage payment, says Steve Kaminski, head of U.S. residential lending at TD Bank, also based in Charlotte.
Don’t make large deposits without documentation
“Large, unexplained deposits might raise questions about the source of funds or suggest undisclosed debts, which could impact the borrower’s ability to repay the mortgage,” says Vernon. If you’ve received money from a family member toward a down payment, be prepared to provide the lender with a signed letter from your relative that confirms the funds are not a loan. The lender may also ask for additional documentation, such as withdrawal and deposit slips.
Don’t rush the process
Even if you’re eager to shop for homes, it’s imperative to take your time with your mortgage preapproval application. “If anything’s off or missing, it could slow down or even hurt your preapproval process. Take a little extra time to double-check everything to avoid any delays,” Vernon says.
It’s worth your while to look at multiple lenders. Comparing quotes could get you the lowest rate and save you thousands in interest. Researching and narrowing your lender options during preapproval will help you act quickly once you’ve found a home and are ready to move forward with a mortgage application.
Kaminski says, “There is a lot to consider, and it can be overwhelming when combined with the emotion of home shopping and potential stress of low housing inventory and competitive offers.”
While you can’t control the market, you can present the strongest possible personal financial profile. In addition to providing the right information at the right time, you want to avoid any moves that could damage lenders’ perception of your ability to make loan payments. By getting preapproved, you’ll have successfully completed an important step in your homebuying journey.
Federal Home Loan Bank reform is in the air in Washington D.C.
The White House recently endorsed a plan to double FHLBanks’ mandatory contributions to affordable housing programs from 10 to 20% of their net income, following a recommendation by the Federal Housing Finance Agency. And the Coalition for Federal Home Loan Bank Reform, a group that I chair and started as a small group of D.C. insiders, has become a true coalition of nine national organizations representing hundreds of thousands of Americans.
Despite billions of dollars in public support, few Americans know about FHLBanks. The Federal Home Loan Bank system is made up of 11 regional banks that pass on discounted loans to their membership of banks, credit unions, and insurance companies. As a government-sponsored enterprise (GSE), the FHLBank system is Congressionally chartered to receive unique subsidies, tax exemptions, and powers, in exchange for providing the public benefits of supporting affordable housing and community development.
The Congressional Budget Office published a new report, which for the first time in two decades put a dollar amount on the public subsidies that FHLBanks receive, estimating that in 2024 the FHLBank system will receive $7.3 billion dollars(!) in government subsidies.
As I show in Figure 1, this subsidy partly flows from the FHLBanks’ tax-free status and regulatory exemptions. But the bulk of the subsidy comes from the way GSE status confers an “implied federal guarantee” on FHLBank debt: the perception that the federal government will stand for FHLBank debt if the system fails. CBO concluded that GSE status reduced FHLBanks borrowing costs by 0.4% and noted that if the system was “private instead of public” its credit rating would fall to AA or A instead of the current AA+ rating. None of these subsidies require Congressional appropriations but rely on federal guarantees, including the high costs of public bailout, were the FHLBanks to fail.
Under the current system, most of these billions in public subsidies flow on as private profits, rather than support public benefits. Congress mandates that FHLBanks devote 10% of their net income every year to affordable housing programs, which support affordable housing development and downpayment assistance. But that meant that in 2023, FHLBanks only paid $355 million towards Affordable Housing Programs while paying out nearly 10x that amount, or $3.4 billion, as dividends! Through these payouts, FHLBanks are redistributing a public subsidy as a profit to banks and insurance companies.
FHLBanks still believe in trickle-down economics. They claim that their discounted loans and dividends to members may trickle down to consumers in the form of discounted mortgage rates. However, many of their members are not even in the mortgage business anymore: a Bloomberg investigation found that 42% of FHLBank members had not originated a single mortgage over the last five years. It is unclear how cheap loans and big dividend payouts to insurance companies help Americans buy their first house or find an affordable rental.
Even the technocratic, impartial CBO questions this twisted system when it dryly noted in its report: “Other stakeholders of FHLBs, including the executives and owners of banks, might also realize benefits.” That is, parts of today’s public subsidy simply go towards supporting seven-figure executive pay at the 11 FHLBanks.
Whether it is coming from the White House, the FHFA, the Congressional Budget Office, or the Coalition, the status quo at FHLBanks is unacceptable. Wasteful government spending, especially amidst a national housing crisis where both parties are seeking solutions to our housing supply shortage, is a bipartisan issue.
Congress should demand greater accountability on how these public subsidies support public benefits. They can start by passing legislation that greatly improves the Affordable Housing Program contributions that FHLBanks make, from the current meager 10% to at least 30% – a set-aside that FHLBanks have shown they can sustainably make when they paid REFCORP contributions from 1989 to 2011.
I think it is time that the public learned about FHLBanks and how they are skirting their responsibility to help support our nation’s housing troubles. There is so much untapped potential here: imagine having the full leverage of $7.3 billion in public subsidies to truly support imaginative housing solutions.
Sharon Cornelissen is the chair of the Coalition for Federal Home Loan Bank Reform and Director of Housing at the Consumer Federation of America, a national pro-consumer advocacy and research non-profit.
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.
The concept of new vs. old wealth did not exist until fairly recently in human history; before that, most people could not have even imagined that they were one or the other kind of person simply because there was no such thing as cash!
Typically, old money is people with a lot of resources who are looking to pass on what they have in order to secure their future. New money, on the other hand, comprising mostly or exclusively by entrepreneurs starting from scratch.
The concept of old money vs new money has been around since the 1920s -yet many people have not given much thought to the concept.
Since most people feel like they will never belong in either group of people – old money or new money.
Are you interested in the concept of old money, but need to make it happen with new money? There are many reasons why you should give both styles of money a chance.
Over time, old money becomes new money.
A lot of people are fascinated with the idea of becoming independently wealthy quickly, right! But, what about those who want to become wealthy gradually? It takes time for old money to become new money.
There is a lot of discussions these days about the old and new money.
When you’re trying to make a big change in your life and start to build your own wealth, it can be difficult.
In order for the change to stick and grow into something more permanent, there are many steps that must take place. Lessons learned from old money.
If you are looking to improve your finances, then this post will help spark some inspiration!
What is Old Money?
The definition of “old money” is describing a social class of people we consider members of the upper class in society. This type of old money has been around for centuries and can be traced back to previous generations.
Old money is a wealth passed down from one family generation to another.
It is not “new,” and old money is a result of work that has made their first generations wealthy.
However, many people do not know about the qualities of old money because they may have been brought up as “old” money is only for a select few.
In today’s society, it is easy to identify someone as having old money because they are typically wealthy and have descended from many generations. You may look down on those who have old money for being “old-fashioned” or not “progressive” enough or just “trust fund” babies. This is a misconception.
Many of those with old money carry the wealth that has been given to them by their ancestors with dignity, insightfulness, and grace. Even when others lost everything due to greediness, they were able to withstand time periods of economic hardship.
Old Money tends to be more generous and kind than new money, which is often seen as selfish.
You can look at families such as the Vanderbilts or even the Rockefellers as old money passed down from generation to generation.
Even in Europe, the term “old money” associates with wealthy families. These families have been able to keep the wealth and power that they have passed down from generation to generation, as well as the pride of their heritage.
What is New Money?
New money is the self-made wealthy people in the world who have made it big.
New money is the recent abundance of money that has created their wealth.
It is new to them, and it took a lot of time for them to get where they are.
New money refers to self-made millionaires of the world, such as Jeff Bezos, Steve Jobs, and Mark Zuckerberg. They are rich because they were able to create a product or service that would go on to be one of the most popular products in their respective markets and quickly become successful.
Most of the new money is mainly found in occupations like technology, sports, and entertainment. These self-made millionaires of the world are entrepreneurs and innovators who have helped shape our society as we know it today.
Many of these people may have grown up poor or broke without extra money for anything. They did not have the support of old money to help them find success.
However, today, they can show that they have a lot of money.
What is the difference between old money and new money?
New money is made recently, whereas old money is made by previous generations in years prior.
Beyond that, there are some notable differences of old money vs new money behavior.
Chance to Make New Money
The biggest difference between new and old money is that new money has a lot of competition, which means there are many more opportunities to earn it.
You can make new money today.
You cannot change your heritage and family’s ability to pass down old money and wealth to you.
This is great for those with an entrepreneurial spirit. They can start to build wealth today.
Wealth Source
New money is self-made and old money is inherited.
Old and new money can be differentiated by who created the wealth.
You have old money if you inherited something from your parents or grandparents. Inheritance is when one person or business transfers part of its assets to another person at the time of death.
Earned wealth is the result of an individual’s effort and hard work, which is seen in the person’s bank account. Creating new money happens in your lifetime.
You are able to pass down that wealth and then, it becomes old money.
Tolerance for Risk
Old-money investors typically do not take on risks. So, they would not invest in something that has a 50-50 chance of working out. That’s why old money is safer than new money because it has a much lower risk factor.
Old-money investors typically invest in things they know will work out such as real estate, long-term investing, or other businesses.
New money takes on a lot of risks because you cannot rely on it as much as you would with old-money investments.
New money investors are starting from zero with nothing. They have much less to risk and the reward is much higher.
Social Perception
New money is not as elitist as old money.
People’s perception of old money is different from new money.
Old money has an attached stigma to the lifestyle they must maintain. In the United States, old wealth is more respected than recent wealth. This idea comes from the social perception of those who are wealthy for a long time and are able to maintain their status with ease.
People who come from lower-class societies often will have a hard time being accepted into high society. Thus, why old money and new money collide on many hot topics.
New money entrepreneurs may grow up poor and end up in a higher class than their parents. However, they may still be looked down on by those of Old Money because they grew through grit and ingenuity.
Differences in Spending Habits
The difference in spending habits between each group is not just limited to the amount of money they spend. Not only do different people have different tastes and needs, but there are also differences in how much people are willing to spend on certain items.
For example, there is a difference between people who buy luxury goods and those who don’t, but both groups could have the same amount of income.
There are many differences in spending habits between old money families and new money.
However, it is important to understand that they do not have a direct correlation with success or financial status.
For old money, they tend to be willing to spend money to uphold an appearance and a certain lifestyle. Yet, they are careful to make sure the family money can be passed on for generations.
Whereas, new money has wildly different spending habits. Some are frivolous with their money because they have waited so long for the opportunity and know they can always make it back again. Others are more hesitant to spend because they worked too hard to get where they are at today.
When does New Money become Old Money?
There is no clear line between old and new money, but the comparison still has value because there is still enough generational wealth to draw from.
The transition from new money to old money happens when the generational wealth is passed down.
The perception of old money was made in the early 1900s. In fact, old money is just wealth passed down and lasts another generation.
The hardest part for new money to become old money is teaching the younger generations how to manage their newfound wealth.
In addition, the common “new money” folks with net worth of over $2 million may not have the right advisors like the billionaires to properly transfer their wealth to future generations and start to build the old money way of life.
Do you know what 10 figures in money is?
Old Money vs New Money Examples
The easiest way to differentiate between old and new money is that old money is inherited from the older generation while new money is created by the current generation.
Old Money has the privilege of being passed down for generations, giving it a sense of stability and security.
New Money comes with its own set of challenges in terms of debt, lack of legacy, and lack of time-tested investment strategies for saving or spending.
New-Age millionaires are self-made wealthy families with new money, making up a large percentage of the wealthiest Americans. These people tend to be more frugal than old-money families who may have been successful for generations and acquired their wealth in the past without much effort. The current generation is acquiring its own lavish lifestyles rather than relying on inheritance. New money families are considered “new entrants” into an exclusive club for old money family members and can feel like they’re being left out due to their lack of legacy.
There are many reasons to give old money a chance, including the fact that it is more likely to be passed down than new money.
Old money is inherited while new money is created by the current generation. Old families are seen to be more educated and refined. In addition, they tend to spend less on luxuries because they know the next generation will have their hands full with managing their possessions.
Old Money is seen to be more classy than New Money.
Accordingly, Old Money families are considered a higher class, with roots going back centuries and attributed to industrialists from a previous era of wealth creation.
Why Take on an Old Money Mentality with New Money
There are many reasons why you should give “old money” a chance. Even if you were not born into inherited wealth, there are plenty of lessons to learn and pass along to your family.
Reason #1 – Financially Stable
First, the people who have old money are usually more financially stable and will be able to help out when times get tough.
They are taught how to be wise with money.
Learn if you embody one of the 32 habits of financially stable people.
Reason #2 – Life Experiences
Second, old money people are more knowledgeable and worldly than new money. They have a wealth of knowledge about the world and will be able to share it with you when hanging out with someone who is new money.
With old money, they have the resources to provide a higher level of education as well as travel to many countries.
However, you do not need money to do experience life to the fullest. One of the best ways to find immeasurable life experiences is to volunteer either locally or globally.
Reason #3 – Financial Safeguards
Third, old money people are more financial safeguards in place than new ones. So, they never worry about being broke or homeless due to the fact that they were born into wealth and their parents passed it down to them.
You can accomplish this with new money as well.
You must create financial safeguards to make sure a sizable chunk of your wealth is making a passive income. Thus, providing for your needs as well as your heirs for many years to come.
This is where a strong financial plan of how to transfer assets to the next generation is needed.
Reason #4 – Giving Back
Fourth, old money people usually give back more frequently than new money. As such, you can find many places with old money names on the building.
Here are some examples of what old money and new money can do:
– Give opportunities for young entrepreneurs
– Help create jobs and is an important part of the economy
– Give people a voice who don’t have many opportunities.
-Create funding for social projects that are beneficial to society
Reason #5 – Transfer Inherited Wealth
Lastly, there is something special about being able to pass down generational wealth.
This is something that comes with a lot of responsibility as you must teach your heirs how to manage money wisely.
However, you can build a lasting legacy beyond your own life.
Ready to Build New Money Wealth?
Money in the 1920s is much different than today.
Old money is usually inherited wealth or obtained through family connections. As technology increases, new money is replaced old money. However, when you look at industries like real estate where there’s not a lot of room for new money, it may be a good idea to give old money habits a chance.
When you give old money a chance in life, you will learn how much time-tested wisdom there really is behind these worldly possessions and riches.
Just because you want old money or new money, it does not greedy or extravagant. It means you know the value of a dollar and want the best for your family.
Embrace one of the many important habits of those with a background of wealth.
But the truth is, nobody likes the idea of talking about money, especially when it involves inherited wealth. So, have discussions today about long-term money decisions.
At the end of the day, it is more important to appreciate family ties over material possessions since they will last longer than any other form of wealth.
Old money offers wisdom to help new money avoid making the same mistakes.
The old money vs new money style is here to stay.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Builder confidence rose for the fourth straight month and residential construction stats may now be trying to catch up. Both construction permits and housing starts rose in February compared to both January and February 2023 levels.
The U.S. Census Bureau and the Department of Housing and Urban Development (HUD) said new residential construction began on a seasonally adjusted pace of 1.521 million units last month. This is 10.7 percent higher than the 1.374 million units reported in January and 5.9 percent more than the level a year earlier.
Single-family starts rose 11.6 percent for the month to a rate of 1.129 million units and were up 35.2 percent year-over-year while multifamily starts increased by 8.5 percent. They retreated however by 35.9 percent on an annual basis.
On a non-seasonally adjusted basis, construction started on 108,100 units during the month, 79,200 of which were single-family houses. The January numbers were 97,400 and 69,700 respectively.
Permitting also increased, although not as dramatically. Authorizations were at a seasonally adjusted level of 1.518 million, 1.9 percent higher than the 1.489 million estimate the previous month. The year-over-year change was +2.4 percent.
Single-family permits were up 1.0 percent to 1.031 million, 29.5 percent higher than a year earlier. Multifamily permits increased 2.4 percent but lagged the prior February by 32.8 percent.
Permits issued during the month totaled 118,300, up from 114,800. Single-family permits increased from 75,900 to 79,300.
Analysts were on target with their forecasts. Those polled by Econoday had consensus estimate of 1.449 million for starts and 1.500 million for permits.
There were an estimated 124,100 residential units completed in February compared to 97,300 in January. Of those, a respective 81,000 and 61,000 were single-family units. On a seasonally adjusted basis, completions increased 19.7 percent from January and 9.6 percent for the year.
The National Association of Home Builders (NAHB) said its index measuring home builder perceptions of the new home market climbed back above the key level of 50 this month. The NAHB/Wells Fargo Housing Market Index rose 3 points to 51, the highest level since July 2023 and the first time it has surpassed the 50 mark since last July. NAHB economist Robert Dietz said builders are responding to the strong demand for housing and mortgage rates which are below the peak reached last fall.
The HMI survey asks builders for their perception of current single-family home sales, sales expectations for the next six months, and current traffic of prospective builders. The scores for each component form an index where any number over 50 indicates that more builders view conditions as good than poor.
All three indices posted gains in March. The HMI index charting current sales conditions increased 4 points to 56, the component measuring sales expectations in the next six months rose 2 points to 62 and the component gauging traffic of prospective buyers increased 2 points to 34.
Dietz also noted that the slightly lower rates are allowing builders to cut back on discounting to boost sales. In March, 24 percent of builders reported cutting home prices, down from 36 percent in December 2023 and the lowest share since July 2023. However, the average price reduction in March held steady at 6 percent for the ninth straight month. Meanwhile, the use of sales incentives is holding firm. Sixty percent of builders offered some form of incentive in March. That share has remained between 58 percent and 62 percent since last September.
Looking at the three-month moving averages for regional HMI scores, the Northeast increased 2 points to 59, the Midwest gained 5 points to 41, the South rose 4 points to 50 and the West registered a 5-point gain to 43.
The Census/HUD report estimates there were 1.666 million residential units under construction at the end of February, 683,000 of them single-family houses. In addition, builders have a backlog of 270,000 permits including 141,000 for single-family residences.
Starts in the Northeast region were down 10.3 percent from January but 16.2 percent higher than the previous February. Permits rose 36.2 percent from January and surged 79.6 percent compared to February 2023.
The Midwest saw gains of 16.4 percent from the prior month and 23.2 percent for the year. Permits increased by 3.8 and 14.9 percent.
Housing starts jumped 15.7 percent and 11.5 percent from the two earlier periods in the South. Permitting dipped by 1.3 percent from January and 5.1 percent for the year.
The West lost ground, with starts falling 7.9 percent and 10.8 percent for the month and the year respectively. Permits were also lower, by 6.8 and 11.2 percent.
For Moriello, she previously explained why it’s fairly easy for existing clients — including forward mortgage borrowers — already served by the company to be flagged as potential reverse mortgage customers once they reach the age of eligibility. For the HECM program, a company professional could look into their customer relationship management (CRM) software and see when a client could potentially qualify for a reverse mortgage.
“Any loan officer can run a report in their own database to calculate when someone’s date of birth hits that prime age [for a reverse mortgage],” Moriello said.
While some may think that certain technology tools are either forward-specific or reverse-specific, Moriello says that the tools at her company are often interchangeable by forward and reverse professionals.
Still, there are advantages to being a lender that is active in both forward and reverse, she explained.
“I feel like, as a loan officer that can look at all products and decide to show the client what different products — like a home equity line, a forward mortgage or a reverse mortgage — can do for them, it gives me the unique opportunity to present all products to them at the same time,” she explained. “[It helps me] give them an understanding about how each product would serve them.”
2024 HECM limit
On Jan. 1, the limit for HECM loans was increased to $1,149,825 by the Federal Housing Administration (FHA). Loan originators who have spoken with RMD on the topic generally find the increase welcome, but they do not feel that the higher limit is a “game-changer” when it comes to new business this year.
Moriello thinks it could be potentially beneficial overall.
“It’s absolutely a consideration,” she said. “I’m in the Northeast, so the higher the dollar amount, the better. I had a conversation [with a borrower] where we were talking through the benefits of taking out a HECM line of credit [for] future planning, [including] the growth rate tied to the HECM line credit.”
Still, despite the potential utility of a higher HECM limit, there are still some product gaps that the proprietary market could serve for people with higher-value homes, she said.
“When I sat down with this borrower, I realized I’ve got to run both the HECM and the proprietary for this client due to the value of the home,” she said. “I wish that we had a proprietary product that had more of a growth-rate line-of-credit option more similar to the HECM.”
Receptivity of referral partners, clients
When asked about openness to reverse mortgages from business referral partners and borrowers, Moriello explained that getting a curt “no thanks” is still common. But for those who might find a benefit in a reverse mortgage, they’re more open of late to explore the possibility.
“More often than not, these high-level professionals are looking for options for their clients,” she said, “whether those options are to help them buy a new home, to live a better life with more assets in retirement, or to help them get a non-taxable stream of cash flow to help them in retirement. They’re looking at opportunities.”
Certain longstanding issues have not gone away, including a perception by some financial planners that makes them feel reverse mortgages are not an option that can even be explored, let alone discussed. But modern classes of financial planners generally seem to be more open to conversations, based on Moriello’s conversations.
“These financial planners are much higher caliber and quality than I’ve ever seen before, but yet the understanding of the compliance behind it causes them to have to take a step back,” she said. “And sometimes they feel they can’t even talk about a reverse mortgage. It’s not as often as it used to be, which is a good thing.”
Spending speed
As for what’s fueling these greater levels of openness, Moriello said it could come from a lot of places, but the speed with which clients are burning through money today is a clear possibility.
“I know from what I can see, it is absolutely tied to how fast people are going through money,” she said. “I can absolutely see that these professionals are worried that their folks are going to run out of money.
“We were just talking here in the office about our own electric bills, which have effectively doubled in our area. That’s one thing when you’re still working, but what happens when you’re on a fixed income?”
That puts far more pressure on fixed-income retirees, which could lead to conversations about tapping into home equity, she said.
“What that means is folks need to take more money out of retirement than they ever have before, and the financial professionals are looking at understanding that. So, they’re looking at options to help them extend the life of their assets so that they can continue to live well in retirement.”
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.
I’ve been told that life is about living in the moment.
But are you living with intention?
Intention means to be aware of what you want, and your desires should align with your purpose.
If they don’t, it can lead to a feeling of not knowing who you are or where on earth life is heading. And without those two things happening in unison – clarity and direction – then any type of accomplishment becomes difficult if not impossible (see my personal story below, for example).
So how do you live with intention?
For many people, life is a struggle.
We are constantly told that we need to do certain things and be a certain way in order for us to feel fulfilled or happy.
While this may sound like good advice, it can lead some of us down the wrong path–especially when our lives are already suffering from a lack of motivation or direction.
In this post, we will discuss seven reasons why you should consider living your life with intention now rather than just letting life lead you. Also, this may change your perspective on life.
There are great benefits that come along with living your life with intention and what it means to live without limitations.
Most importantly, there will be questions you may want to ask yourself which could help get you started on the right path going forward.
Either way, to live life with intention, you must take action now!
What is Intentional Living?
This is an intentional practice of living more intentionally, with a greater focus on self-care and mindfulness.
Intentional living is a lifestyle that encourages you to identify your priorities and values.
This means that it matters more than ever before because people are gradually becoming clearer on what they want in life and how they can achieve those things.
It is not an easy task but one worth taking up if you’re ready for the challenge, as there will be greater clarity of focus when pursuing this goal.
Living Life with Intention Meaning
Intentional living means that we are aware of what’s going on in our lives and make conscious decisions about the things we want to do. It also implies being present, stopping for a moment, reflecting, and thinking about what’s happening.
When you live intentionally it gives your life meaning because you will see progress over time as opposed to just fixing things or achieving goals by ticking them off a list.
Intentional living is a lifestyle that allows for more time to experience love, laughter, happiness, and appreciating the intrinsic value of simpler things.
Saying I appreciate you is important.
In these exploratory questions below, we looked at what makes you happy, how you spend your time, and your future plans.
Why is it important to live intentionally?
It is important to live intentionally because you will have a life that is more meaningful, purposeful, and rewarding.
You are able to make decisions about what you want out of your life and know what is most important to you.
In this busy world, it is easy to get caught up in the rat race. Simplify your life and spend time doing what matters most requires living with intention.
We need to be mindful of how we choose our day-to-day activities so that they serve a greater purpose.
By living intentionally, one can live a happier and healthier life. Purpose in life is correlated with happiness.
7 Reasons For Living Life with Intention and Purpose
Intentional living is a lifestyle that focuses on reflecting and making conscious decisions about what’s in alignment with your values.
This approach to life helps you live more meaningful, satisfying lives by taking time out of each day to consider who you are, what matters most to you, and how might be able to change the course of your life for the better.
It only takes 7 minutes per day for intentional reflection.
In a short amount of time, the benefit is it allows you not only to think about what is in alignment with your values but also how you might be able to change the course of your life for the better.
And that’s the point of intentional living: to live your life with intention.
These 7 reasons are not only worth pursuing now but also in life’s present moments where there is no need to wait until tomorrow because it can be done today!
1. You’ll be more in the present moment.
You will be able to live a life more spontaneously and deeply, with intention.
By living each day more deliberately, you will find greater peace bliss, serenity in your day-to-day life, and increased meaning in a world where things and people repeatedly start to look the same.
Living a life with intention and purpose is going to be one of the best decisions you can make. Why? The power that comes from living a deliberate life will impact every area of your being.
2. You’ll be focused on goals and daily tasks, not distractions.
A person’s life is often focused on daily tasks, work, and going through the same routine day after day. This focus has its benefits, but it also entails forgetting about important goals that a person has set.
With the abundant distractions in our lives, we seek the next big project (or social media) to distract us from what we need to focus on.
In times like these, it becomes difficult to make the “life decisions” that will lead us closer to success.
3. You’ll be more likely to make smarter decisions and take on new challenges with confidence.
Happiness is a choice, and so are meaningful relationships. Time well spent will be a joyful day.
Managing your expectations will improve your life, making it harder for you to get too disappointed.
Start new projects with ease and make motivation part of your daily routine.
Handle criticism with ease knowing there will be some bumps and bruises along the way, but you know it is worth sticking your neck out.
Utilize today’s technology to your advantage – not a distraction device.
Sidestep old patterns or bad habits, so that you are open to the opportunities that lie ahead.
Perception of ease is attainable when you make healthy lifestyle choices and become reliant on an inner sense of what is worth.
4. It will help you better understand your priorities, which means less decision fatigue!
You’ll feel more relaxed knowing you are saving your time for the activities that matter: conversation, cooking dinner with friends, sitting on the couch working on your weekend project, and reading a book.
Maintaining your lifestyle and personal growth should be a top priority in your personal development plan since it is impossible to get back any time you waste.
This should not have to be a life of hustle.
In this life, you have time for time activities with meaning and purpose.
5. It will help keep you on track with your goals and priorities, which can be hard to do without a plan.
You have to find your 100% pure motivation and encouragement in this journey of life!
By setting goals and aligning your priorities, it will transform the way you live your life and have a fulfilling time.
Our focus on this post resonates with a well-timed message to help facilitate personal growth and success- with empowering and easy steps.
Learn how to make money goals and a vision board.
6. You’ll have the freedom to live life how YOU want to live it.
You’ll have the freedom to live life how YOU want to live it.
You will have the freedom to set and achieve objectives using the resources you have.
You will love how it keeps you balanced, since your world is always changing, and the results will show on your path to success.
One of the ways to achieve this is to understand the real meaning of time freedom. More importantly, you need to figure out how to live with time freedom dominating your day.
7. You will have clarity of your desired outcome and what you want to create for yourself, others, or both (meaning you’ll have a purpose).
Since the idea of pursuing happiness can be vague, you have to define the truths about living this free life and live more intentionally.
In these times, many are foregoing happiness in favor of sacrificing something to feel secure within their careers or daily overexerting themselves by trying to “keep up with the Jones.” You deserve clarity of how you want to spend the remaining years you have.
This answer will vary from person to person and situation to situation because you have the freedom to design the life you want.
With so many distractions and options, it can be hard to find your way. Whether you’re looking for love, fulfillment, or a career path, this mantra is the life guideline that will provide clarity and stay true.
Now, It is Your Turn…
Living Life with Intention turns the phrase “figuring it out” into a guide to the life you love.
It is about being aware of what matters most and prioritizing it in a way that helps you reach your goals. Intentional living is not just for those seeking blessings or divine guidance; anyone can benefit from this approach – whether they be spiritual seekers or simply trying to improve their quality of life.
This is how can I have an intentional life.
Is intention and purpose the same thing?
Intention is a conscious choice to act in a certain way. Purpose, on the other hand, is something that we do because it’s part of our core values and who we are as people. Intention helps you live life with purpose and intention.
The difference between Intention and Purpose:
– Intentions are short term goals or actions. These are things you do today to achieve your purpose.
– Purposes are your long term goals or actions. This is whys why you are doing the things that lead up to your intentions.
In addition, purpose also means that you are doing something for a larger reason than just the goal or action itself.
Intention and purpose are different because the intention is short-term, while purpose is long-term. They correlate to each other on how you live your life each day.
How to Live Life with Intention
Intention is defined as the direction or goal of one’s thoughts and actions. Even though people may be living their lives without intention, life still has a direction.
In order to live life with intention, one must think about their actions and their consequences of them. The consequence could be something small such as not picking up an item at the store that you needed to buy, or it could be something monumental such as not staying in a relationship that you feel is no longer healthy for you.
The point of living life with intention is to make the best choices for oneself, one’s family, and one’s future.
In order to do this, you must answer these soul-searching questions.
For most people, this is difficult because it requires you to consider how you want to live your life.
There are many ways that one can do this, and the answer will be different for everyone. However, it is important to do this with intention and intentionality.
1. Envision your perfect day
Make a picture of what your life would look like if you were living that perfect day and make it as detailed as possible.
Find a quiet place to sit and be still for at least 10 minutes.
Think about:
What would you spend your time doing?
Where would you be?
Who would be with you?
Now, how can you live days like that more often?
2. Decide your Personal Values
In order to make a change, you must first decide what is important to you. This process can be difficult and painful, but it’s necessary in order to keep yourself motivated towards your goal.
It is important to decide what your personal values are and use them as a guide for making decisions in life.
This is a process that starts with thinking about what your personal values are. This can be difficult to do in the abstract, but it is helpful to think of your values as being somewhere on a spectrum between your beliefs and what you do.
Do this exercise like you were an outside person looking in. What would that person say about you? What do you value in life?
Your life of personal values will be necessary in order to live with intention.
3. What is your Vision for Life?
Your vision for life is what makes all the difference in how you live your day-to-day life.
Core values are the guideposts that lead you along your path to fulfillment and happiness. By looking back on moments when you feel proud or happy, it’s easier to find out what is important to you and how those things can be expressed through your actions today.
A simple example could be:
My vision for life is to be happy and healthy. I want to live a long, fulfilling life with the love of my family and friends.
If you have never created a vision board, then this vision board planner will help you out!
4. Question the “Norms”
Think about everything you believe you belong on your list of “have tos.”
Those things you feel like you must do. Some examples of these are “you have to go,” “you need to eat,” and “I have to do my homework.”
Now, take a birds-eye observation… do these “norms” and “have tos” serve you well?
Are these “norms” the reasons why you are not living your life with intention?
Take inventory of what you actually have to do every day and eliminate all that does not serve your goals.
5. Relax Intentionally
Relaxing intentionally is a process in which one seeks to achieve a temporary escape from stress and the overwhelming pressures of everyday life.
This is something that is HARD to do when you first attempt to relax.
It is important to take some time for yourself.
Unwind from a busy day and get back into the life of intention by choosing low-energy activities that re-energize you.
During quiet time, spend time intentionally uncovering ways that help you relax.
Are you Ready to Live Life with Intention?
Ultimately, living life with intention is about curating a life based on things that really matter.
You can do this through intentional time management and making sure you are spending your time in the way that makes the most sense for yourself. This will help you to be more clear on what it means to live intentionally as opposed to just being dictated by society’s standards or guidelines.
This is something that you deserve to do.
Furthermore, intentional living is about being present and aware of what you value.
It is a shift from striving for the life that others think you should be leading to embracing the one that feels good. Intentional living allows us to find more room for love, laughter, happiness, and appreciate all those things we often take for granted in our daily lives.
It doesn’t mean giving up on your goals or aspirations but rather finding rhythm so they feel true instead of false like many other pursuits.
Living a life of intention will impact the world on what you believe in.
This is a step necessary for personal growth, which leads to accomplishing more things than you ever thought possible.
With true reflection, it will take time to figure out your values and decide what they are.
Intentional living is about more than just paying bills and going to work each day — it’s about giving your life a purpose. It means considering every decision from all perspectives that are relevant to the kind of life you want
You just have to start questioning every single action you take.
This is how can we live an intentional and purposeful life.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
He pointed to the marked improvement in sentiments toward selling, which could signal an influx of existing home listings in the near future. He also noted a lingering optimism among consumers that mortgage rates might see a decline over the next 12 months, which could potentially energize the housing market even more. “If their expectations … [Read more…]
Yields spiked in the first half of February as the jobs report and CPI both suggested a stubbornly resilient economy and inflation outlook. That was January data. Now that the market is getting to see and digest February’s data, things are starting to change. Traders are increasingly thinking about concepts like “residual seasonality” in price indices for January as well as the tendency for NFP to beat/miss in a big way only to reverse course in the next month of data. The extent to which the market would need to reprice borders on ‘extreme’ in the event of this sort of data volatility in the next week and a half. There’s no solid reason to assume that will happen, but today’s ISM services data fires another warning shot.
Taken in conjunction with last Friday’s ISM data, the market is quickly shifting its perception of how this week’s jobs report may come in. There could even be some hope for next week’s CPI although the components keeping that data elevated are not well-reflected in the ISM reports. Even so, it’s been enough for a noticeable lead-off from the recent range.
In an unprecedented fusion of creativity and vibrancy, Dutch design studio Raw Color has partnered with global furniture giant IKEA to introduce the Tesammans collection, a groundbreaking assembly of home furnishings that boldly defies conventional color norms. Launched during Paris Fashion Week at the IKEA+ exhibition, this collection marks a significant turn in home decor trends, inviting homeowners to embrace the joy and complexity of color through everyday items. Spearheaded by IKEA’s creative leader Maria O’Brian and Raw Color’s co-founders Daniera ter Haar and Christoph Brach, the collection emerged from a two-year intensive research endeavor, culminating in an offering that spans 18 pieces across 15 different colors.
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Challenging Color Conventions
The Tesammans collection is designed to challenge and transform the mainstream hesitation towards vibrant colors in home decor. By incorporating a minimum of two colors per item, the collection pushes boundaries and encourages a more dynamic interaction with color. From optical illusion rugs and throws that change perception based on light and positioning, to three-tiered metal lamps and abstract wall clocks, each piece is a testament to the potential of color to influence mood and space. Key products like a sculptural mobile and a gridded trolley showcase Raw Color’s innovative approach to color combinations, aimed at creating visually engaging and interactive home decor.
Materializing Color Perceptions
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One of the core aspects of the Tesammans collection is its exploration of how colors interact with different materials. This was a significant challenge, as noted by Daniera ter Haar, reflecting the complexity of achieving the desired color effects across diverse mediums. Ceramic pots, for instance, reveal the subtlety of color matching in solid forms, while pre-cut fabrics showcase vibrant shades in soft, pliable materials. This exploration not only highlights the technical prowess of Raw Color but also underscores IKEA’s commitment to innovative design solutions that meet the emotional and aesthetic needs of its customers.
A Milestone for Raw Color and IKEA
The launch of the Tesammans collection during Paris Fashion Week, accompanied by a photo series by renowned photographer Annie Leibovitz, represents a significant milestone for both IKEA and Raw Color. For IKEA, it reinforces the brand’s position as a leader in affordable, innovative home decor. For Raw Color, established in 2008, it marks a culmination of years of research into the emotional and functional aspects of color in design. The collection not only showcases the studio’s deep understanding of color theory and application but also offers a fresh perspective on how everyday objects can transform our living spaces.
The Tesammans collection by IKEA and Raw Color is more than just a line of home furnishings; it’s a vibrant invitation to homeowners to explore the emotional richness of color. By challenging conventional color norms and demonstrating the joy of color through practical, beautiful items, IKEa and Raw Color are setting a new standard for what our living spaces can look like. As this collection makes its way into homes around the world, it’s clear that the future of home decor is bright, bold, and brilliantly colorful.
In the past, real estate investing was only accessible to the affluent. However, the advent of real estate investment trusts (REITs) has altered this perception.
Investing in real estate through a REIT eliminates the need for purchasing and managing properties individually. This can be a smart way to branch out from the stock market and diversify your investments, yet it’s important to note that economic downturns may still affect your returns.
In this piece, we’ll explore the advantages and disadvantages of REITs and guide you on how to embark on this investment journey.
What is a REIT?
A real estate investment trust (REIT) is a company that owns and operates income-generating real estate. A group of investors will pool their money together to invest in a REIT, which makes it possible for you to earn rental income from real estate without buying and managing it yourself.
REITs invest in all sectors of the real estate market, including apartment buildings, hotels, retail locations, warehouses, and more.
Investing in REITs is popular due to its potential for a stable income and ease of buying and selling as most REITs are publicly traded. Additionally, the wide range of real estate sectors that REITs invest in adds to its appeal, providing investors with diverse investment opportunities.
REIT Requirements
To be recognized as a Real Estate Investment Trust (REIT) by the Internal Revenue Code (IRC), a company must adhere to several guidelines, such as:
Offering shareholders a minimum of 90% of taxable income as dividends each year.
Investing a minimum of 75% of its resources in real estate assets or cash.
Generating at least 75% of its gross income through real estate rentals, mortgage interest, or sales.
Being taxed as a corporation.
Maintaining a board of directors or trustees.
Having a minimum of 100 shareholders after its first year in operation.
Limiting the ownership of its shares by no more than five individuals, with each holding no more than 50% of the total shares
The Pros and Cons of Investing in REITs
There are upsides and downsides to any investment decision, and REITs are no exception. If you’re on the fence about investing in a REIT, here are a few things you should consider first.
Pros
Diversify your portfolio: Investing in a REIT is a good way to diversify your portfolio outside the stock market. And it allows you to invest in real estate without having to take on the risk of buying and managing the properties yourself.
Steady stream of income: Many people are drawn to REITs for the steady dividend payments. By law, a REIT must distribute at least 90% of its taxable income to its shareholders.
Less volatile investment: There is no such thing as a risk-free investment, but REITs do tend to be less volatile than the stock market.
Liquid asset: Unlike physical real estate, REITs are a liquid investment and much easier to buy and sell quickly.
Cons
Some REITs can be risky: Not all REITs are created equal and in particular, non-traded or private REITs are not as easy to sell.
They can be expensive: To begin investing, some REITs require a minimum investment of $25,000.
You may lose dividend payments: During an economic downturn, you could lose your dividend payments if the property stops producing adequate income.
Different Types of REITs
There are several kinds of REITs, depending on how the shares are bought and held. Here is an overview of the different types of REITs you can invest in.
Publicly-Traded Equity REITs
Publicly traded REITs are listed on a public stock exchange, such as the New York Stock Exchange (NYSE) or the NASDAQ. They are regulated by the U.S. Securities and Exchange Commission (SEC).
Individual investors can buy and sell REITs with an ordinary brokerage account. Publicly traded REITs tend to be more transparent and liquid than non-traded or private REITs.
Public Non-Traded REITs
A public non-traded REIT is listed with the SEC but is not listed on an exchange. They can only be purchased through certain types of brokers, and are much harder to buy and sell.
According to the SEC, it can also be much harder to determine the value of a non-traded REIT. Non-traded REITs don’t usually provide an estimate of the value per share until 18 months after the offering closes.
Private REITs
Private REITs are unlisted and aren’t typically regulated by the SEC. This makes them harder to value and a riskier investment. They also tend to be much more expensive, and often require a minimum investment of $25,000 or more.
Equity REITs
An equity REIT operates like a landlord and owns income-producing real estate. The company manages the property, provides basic upkeep, and collects monthly rent payments.
Mortgage REITs
A mortgage REIT doesn’t own the property but instead owns debt securities backed by the property. They collect the monthly payments, but someone else owns and manages the property. This tends to be a riskier investment than an equity REIT, but the shareholder dividends also tend to be higher.
Hybrid REITs
A hybrid REIT is a combination of an equity and mortgage REIT. The company typically owns and operates both real estate properties and commercial real estate mortgages on its portfolio.
How do I invest in a REIT?
Investing in REITs can be done by buying individual REITs listed on public stock exchanges, or by investing in a REIT mutual fund or exchange-traded fund (ETF). The latter offers the advantage of exposure to real estate through a single investment, without the need to buy and manage individual REITs.
If unsure where to begin, seeking the guidance of a broker or financial planner can be helpful in finding the best investment option that suits your needs.
Is investing in a REIT the right choice for me?
Maybe, depending on your level of risk tolerance and financial goals. REITs do have a strong track record of growing dividends and long-term capital appreciation.
Many investors appreciate the steady form of income that a REIT can provide. And publicly traded REITs are regulated by the SEC and professionally managed, so they tend to be pretty transparent.
Bottom Line
Many people are interested in investing in real estate but don’t have the time or money to buy and manage properties on their own. If you find yourself in this situation, REITs could be a suitable alternative for you.
With REITs, you can diversify your investment portfolio and reap the rewards of consistent dividend payments. Additionally, REITs tend to have high liquidity, making them a simpler investment than conventional real estate.
However, non-traded and private REITs can be more risky and opaque, so it’s crucial to thoroughly understand the investment before committing. If unsure, seeking guidance from a financial advisor can help determine the best approach for you.
Interested in learning about different types of REITs? Check out our full review of Fundrise to learn more.
Real Estate Investment Trust FAQs
What is a real estate investment trust (REIT)?
A REIT is a type of investment vehicle that owns and operates income-generating real estate properties. REITs allow individual investors to invest in a diversified portfolio of real estate assets. These include office buildings, apartments, shopping centers, and warehouses.
How do REITs generate income?
REITs generate income by owning and managing a portfolio of income-producing real estate assets, such as apartment buildings, hotels, office buildings, and retail spaces. These assets generate rental income, which is then distributed to REIT shareholders in the form of dividends.
Additionally, REITs can also generate income through the sale of real estate properties or by financing real estate developments, such as mortgage origination or securitization.
How are REITs different from other real estate investment options?
One aspect that sets REITs apart from other real estate investment options is their publicly traded nature. Many REITs can be found on stock exchanges, just like regular stocks, enabling individual investors to purchase and sell REIT shares with ease and agility. This allows individual investors to access real estate investments without the hassle of directly owning and managing properties.
Are REITs a good investment?
Investing in REITs can provide a lucrative opportunity for investors seeking to diversify their portfolio and earn passive income from the real estate market. However, as with any investment, REITs are not without their own set of risks.
It’s imperative to weigh the potential rewards against these risks before making a final investment decision. Researching the investment options available to you can help mitigate potential risks and maximize your chances of success.
What are the risks of investing in REITs?
Investing in REITs can be complex and entails potential risks. Key factors such as economic downturns, interest rate fluctuations, intense competition, subpar management, and limited liquidity can negatively impact REIT returns.
To safeguard your investments, it’s imperative to perform thorough market analysis and seek professional financial advice. This approach helps you establish your investment goals and risk appetite, enabling you to make well-informed decisions and potentially lower the risks associated with REIT investments.
Can REITs be held in a retirement account?
Yes, REITs can be held in a retirement account such as a traditional IRA, Roth IRA, or a 401(k).
Are REIT dividends taxable?
Yes, REIT dividends are generally taxable as ordinary income. However, REITs may also pay capital gains distributions, which are taxable at the capital gains rate.
How do I buy REITs?
REITs can be purchased through a brokerage account, just like stocks. You can place an order to buy REIT shares online, over the phone, or through a broker.
Can I buy REITs directly from the company?
While a few REITs offer the option to buy shares directly from the company, this is not a widespread practice. Typically, REITs are listed on stock exchanges and can only be acquired through a brokerage account.
Are REITs suitable for all investors?
REITs may not be suitable for all investors. Assess your financial aspirations, risk appetite, and investment timeline to determine if REITs align with your investment strategy. To make informed investment choices, it’s advisable to either seek advice from a financial expert or conduct extensive research.