Hedging, Loan Production, Auditing, QC, Broker Marketing Products; Primer on the Cost to Hedge
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Hedging, Loan Production, Auditing, QC, Broker Marketing Products; Primer on the Cost to Hedge
By: Rob Chrisman
8 Hours, 39 Min ago
A “crisis” is a time of intense difficulty, trouble, or danger. Think calamity, catastrophe, or disaster. The word makes for attention-grabbing headlines, and a scan through the news shows a mental health crisis, child care crisis, migrant crisis, China property crisis, a climate change crisis, an opioid crisis, a housing crisis… Eventually people become immune to seeing the word, and it loses its effectiveness, especially when nothing pans out from the “crisis.” I mention this because, despite a lot of predictions to the contrary, the banking “crisis” from March seems to have been contained to a few well-known banks. (Let’s hope so.) The Federal Reserve Board, released its results of annual bank stress test, which demonstrates that “large banks are well positioned to weather a severe recession and continue to lend to households and businesses even during a severe recession.” Of course, not every bank is large, and Ken Sonner telexed over the “The 100 Largest U.S. Banks by Consolidated Assets” which is of interest to anyone who has money in a bank or has a bank for a client. Yes, Chase now equals Wells Fargo plus Citi. (Today’s podcast can be found here and is sponsored by Visio Lending. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Through its top-rated Broker Program, Visio brokers can earn up to 5 percent. Hear an interview with Optimal Blue’s Erin Wester on both Product and Pricing Engines (PPE) and how pricing in the secondary market flows into the primary market.)
Lender and Broker Services, Products, and Software
In 2021, Procter & Gamble won the title of largest advertiser in the world, spending a jaw-dropping $8.1 billion on ads. While the company’s monumental ad budget is impressive, enterprising individuals who find creative ways to succeed with limited resources are doubly inspiring. Mortgage brokers are a perfect example of these types, as the majority of these lone wolves have to juggle customer service, relationship management, marketing, processing, compliance and more. To help brokers run their one-person show more effectively, Surefire by Black Knight has compiled an eBook detailing the marketing strategies and tools needed to succeed in a high-cost market. Download A Mortgage Broker’s Comprehensive Guide to Mortgage Marketing now for free.
“Learn About Current QC Trends and Industry Insights in Our Latest Webinar! With upcoming QC requirements on the horizon, now is the time to familiarize yourself with how they will impact your business. In our highly anticipated webinar, you will hear from ACES Quality Management’s President, Phillip McCall and EVP, Nick Volpe on an analysis of recent Mortgage QC Industry Trends Report, a deep dive into mortgage quality control trend reporting and how it aligns with the current state of the industry, and industry insights and how to best navigate through the volatile financial landscape. Walk away with a better understanding of what’s to come and how you can best prepare for the future. Watch Now.
“Experience unrivaled mortgage lending expertise for your next audit. At Richey May, we don’t just hire from the mortgage industry, we have the top experts who build it. We have defined what it means to be a mortgage expert for almost 40 years and are proud of our team members like Jennifer Hannah, CPA, AMP, who leads our Mortgage Banking Audit practice. As leaders in the mortgage lending industry, we provide extensive education for our clients while forging genuine relationships, communicating effectively, and resolving issues before they become problems. Our team’s extensive knowledge in mortgage technical accounting and audit acumen ensures top-quality service delivery. Guided by strong values, we strive to significantly impact our clients’ success. Reach out or visit our website to learn more about how we can help your audit drive growth, not just check a box.”
Products and Tools for Loan Production
Interest rates may tick up again next month, with experts predicting that mortgage rates will remain around mid-6 percent in the near term, but buyers are still out there. The loan officers with the right tools in place will be the ones to secure their business. With Percy’s homeownership engagement solutions, you can maintain connection with customers even after they’ve closed on a home. Percy’s captivating Equity Insights offer details on a home’s value and show how this value can be leveraged to fund home improvement projects or finance the next move. Need to work more with agents? Percy has 250,000 agents waiting to work with you. With Percy in place, our clients are reaping an average 400 percent ROI… and you can too. Learn more here about how you can use Percy to gain a competitive edge.
“In California, Golden State Finance Authority (GSFA) celebrates 30 years paving a path to homeownership for low-and-moderate income California households, having helped over 85,000 individuals and families to purchase a home and provided more than $660 million in down payment and closing cost assistance. Join us this June and July as we showcase our beginning, our mission, and the many achievements of the past three decades. ‘Golden State Finance Authority, Where Affordability Meets Flexibility®.’ Join our lending team! Start helping more homebuyers in California to Achieve the Dream. Visit www.gsfahome.org and follow us on Facebook, LinkedIn or our YouTube channel.”
“Did you know that OptifiNow provides wholesale Account Executives with an amazing tool that can double their funding volume? OptifiNow TPO is a CRM that expertly manages your wholesale lending sales team, but our Loan Scenario Ticketing Module is an absolute game changer. This module integrates with many popular Product and Pricing Engines (PPE) to enable your AEs to provide instant quotes to broker loan scenarios. OptifiNow automatically emails loan scenario quotes to brokers and follows up with them using a sequence of emails or SMS messages designed to ensure consistent engagement. Every Loan Scenario Ticket is tracked, so you know how frequently brokers are engaging with your AE, the types of products they are interested in and the pricing that was available at that time. AEs using OptifiNow’s Loan Scenario Ticketing module have been shown to double their monthly fundings. Interested? Contact OptifiNow for more information.”
The Fabled “Cost of Hedge”
Home lending is one of the few industries where the customer can lock in a future rate & price. Put another way, if you went to the local gas station, or grocery store, and told them you wanted to pay now for a gallon of petroleum or milk two months from now, you’d be stared at in disbelief. But the futures market is alive and well with companies and individuals locking in prices now for things like bacon, orange juice, wheat, gold, and corn in the future, hedging any impact of prices on their profits. There is a cost, usually the bid/ask price spread, the drop in price from one month to the next, and commissions paid in actually trading the contracts.
I periodically receive questions about the “cost to hedge” for mortgage bankers with locked pipelines. It is not an easy question to answer, like the cost of unleaded gas down at the corner. Hedging is a loan level activity where each loan’s program, interest rate, lock period, etc., is analyzed. It is tricky because company policies like extensions and renegotiations enter into it. Specifically, extensions and renegotiations increase it, and while the production team is helped, the capital markets department usually incurs the expense. And the price drop in the securities market often changes during the lock period. And then there’s always the “what is the cost of a loan that falls out?”
Capital markets vet James Hedvall recently weighed in. “Manufacturing loans faster, and bringing loans to market quicker, reduces a lender’s interest rate exposure to some degree. Thus, the reason bond loans can be an issue for some lenders. Unfortunately, I think many hedge vendors look at the problem 2-demonsionally, when it’s a 3-D issue. The problem isn’t necessarily all “speed-to-originate,” but rather “hedge model efficiency.” What assumptions are being made about the duration/beta of the hedge instrument, and pull through, broken down by product groups and cross referencing at what stage in the loan life cycle loans have fallen out in the past. Volatility in the To Be Announced (TBA) markets will kill a lender’s gain on sale. Lenders can be profitable in a rising rate environment, and profitable in a falling rate environment, but sudden swings in the bond market, and therefore interest rates, will kill you every time and all models break down.
“The cost to hedge is constantly changing. Viewed in a vacuum, I can say right now our hedge cost is around $X per loan, while the market is behaving rationally and my pull through acts as it has historically. This is also assuming I’m sending loans to market at the right time, I’m using broker/dealers that aren’t trying to pick off an additional +, and all the while having a stable ‘best efforts to mandatory’ spread. Ask me in six months how much my hedge is running and I’ll no doubt have a different answer. I believe that the real value of originating the loan quicker is a reduction in your finance fees from your warehouse bank, and not necessarily on your hedge side.” Thank you, James.
Capital Markets
Are long onboarding processes stopping you from making a switch? In a recent case study, NBH Bank describes their process getting started with MCT and how they were able to get mortgage pipeline hedging and best execution loan sales up and running in just ten days. “MCT exceeded our expectations for this onboarding process,” said Ajay Timothy, Vice President and Director of Secondary and Capital Markets at NBH Bank. “We were in a compromised position with our previous hedge provider and needed to get this done quickly…we got this done in about 10 days.” NBH Bank relied on MCT to come together with multiple teams to support them in a safe, effective way outside of normal processing times to ensure there were no gaps in their hedge coverage. Download the case study to learn how MCT is innovating the onboarding experience for clients.
Rate-wise, the main economic headline yesterday was Fed Chairman Powell’s remarks at an ECB event in Portugal, where he said that core U.S. inflation won’t hit 2 percent until 2025. He also said that there is significant disinflation in the pipeline, but that the dot plot is projecting another couple rate hikes. On a separate note, as noted in the opening paragraph, the Federal Reserve released the results of its annual stress test of banks and Wall Street’s biggest banks passed, clearing a key hurdle for returning billions of dollars to investors. The 23 largest U.S. lenders showed they can withstand a severe global recession and turmoil in real estate markets.
Fed Chair Powell once again spoke in Europe before the open to kick off today’s economic calendar. Besides Chair Powell, Atlanta’s Bostic is scheduled to speak and Sweden’s Riksbank will also be out with its latest monetary policy decision where a 25-basis points hike is expected. We’ve also received the final look at Q1 GDP (+4.1 percent) and weekly jobless claims (down to 239k, down 26k, very strong; continuing claims 1.742 million). The core PCE (personal consumption) deflator came in at +4.2. Later this morning brings the Pending Home Sales Index for May, Freddie Mac’s Primary Mortgage Markets Survey. We begin the day with Agency MBS prices worse .250-.375 and the 10-year yielding 3.79 after closing yesterday at 3.71 percent; the 2-year is up to 4.84, up .13 on the news.
Jobs
“PrimeLending LOs “tell all” at our first ever Loan Officer Roundtable! Join us for a live webinar on July 11th at 1:00 PM Eastern, where you’ll gain invaluable insights from our top mortgage loan originators. You can learn firsthand why PrimeLending could be your next best professional move. Hear personal stories, explore our work culture, and get answers to your burning questions about a career at PrimeLending. This exclusive (and anonymous) event is designed for loan officers like you, seeking a career boost. Contact Nic Hartke today to secure your spot at this one-of-a-kind opportunity to get the inside scoop from your peers. What are you waiting for?”
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Mortgage rates have been all over the place lately. They rose this week, reflecting the volatility of the U.S. economy brought by inflation and Russia’s war in Ukraine.
The average 30-year-fixed rate mortgage increased to 3.85% for the week ending March 10, up from 3.76% in the previous week, according to the latest Freddie Mac PMMS Mortgage Survey.
A year ago, the 30-year fixed-rate mortgage averaged 3.05%. The PMMS report is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit. The survey said buyers paid 0.8 mortgage points on average.
According to Sam Khater, Freddie Mac’s chief economist, over the long-term, rates will continue to rise as inflation, which spiked 7.9% in February, broadens and shortages increasingly impact many segments of the economy. “However, uncertainty about the war in Ukraine is driving rate volatility that likely will continue in the short term,” he said in a statement.
Mortgage rates usually move in concert with the 10-year Treasury yield, which reached 1.94% yesterday, compared to 1.86% on the previous Wednesday. The 15-year-fixed-rate mortgage averaged 3.09% last week, up from 3.01% the week prior. A year ago at this time, it averaged 2.38%.
Economists have said that the war in Ukraine could bring a short-term reduction in mortgage rates, as investors flock to safe haven assets like mortgage-backed securities and bonds. However, longer term inflation brought on by the conflict, mainly via oil prices, will cause mortgage rates to rise
The expectation of higher rates increases borrowers’ appetite for new loans. Mortgage applications jumped 8.5% for the week ending March 4. Compared to the same week one year ago, applications dropped 35.8%, according to the Mortgage Bankers Association (MBA).
Borrowers’ demand for mortgages increased across the board. The MBA‘s seasonally adjusted refi index rose 8.5% from the previous week, with a larger gain in government refinances. Meanwhile, the purchase index was up 8.6% in the same period.
Bitcoin has practically become synonymous with cryptocurrency, but it’s hardly the only coin option out there. If you’re thinking about investing in crypto (or are already doing it), there are several others worth considering.
Let’s look at eight alternatives to Bitcoin for those seeking out the best cryptocurrencies.
But a note before we dive in: cryptocurrencies are extremely volatile and not recommended over other forms of investments like stocks and bonds. But if you do have the appetite for this kind of high-risk investment, let’s first look at what’s happening in the cryptocurrency space at the moment, before we get into the best cryptocurrencies.
What’s Ahead:
What’s Happening in the World of Cryptocurrency?
As you may have noticed, the prices of cryptocurrency tokens have drastically decreased in recent months — with many investors calling it a crypto crash. Even those coins that are considered the “best” cryptocurrencies have dropped in value.
With recent moves by the U.S Federal Reserve to combat high inflation by raising interest rates, on top of global instability, there has been a knock-on effect that’s played out as decreased valuations and even bankruptcies in crypto. More than a few collapses have shaken the crypto market in the past year.
In May 2022, the collapse of TerraUSD (a stable coin) along with its sister token, Luna, wiped out billions in the cryptocurrency market — about $40 billion, to be exact. As a result, some people lost their life savings and othersbit debated exiting the cryptocurrency space altogether.
Later, with the collapse of massive crypto exchange FTX in November 2022 and a number of firms filing for bankruptcy soon after (including BlockFi and Genesis), the losses continued to pile on.
Even Bitcoin has dropped in value, from its peak at $69,044.77 to hovering around $28,000 (specifically $28,349.25 on March 31st, 2023). And some smaller coins have had even sharper declines.
So, what does this mean for you if you’re considering investing in cryptocurrency?
Even a stable coin isn’t stable.
There’s volatility in the cryptocurrency space.
You shouldn’t risk money in cryptocurrency that you can’t afford to lose.
Read more: 5 Things You Should Know Before Investing in Crypto
8 Alternatives to Bitcoin
With that warning out of the way, let’s look at some alternatives to Bitcoin.
You’ve probably heard plenty of buzz over the years about “meme coins” and random success stories of ordinary folks becoming millionaires through cryptocurrency investing, just by seeking out Bitcoin alternatives.
If that’s your goal, this article isn’t for you. We’re not going to promise you any get-rich-quick coins. Rather, these are coins that have people talking and that may be worth considering if you’re looking to expand your crypto portfolio beyond Bitcoin.
Read more: How To Invest in Cryptocurrency: A Beginner’s Guide
Ethereum (ETH)
The second most popular form of cryptocurrency, Ethereum is an open-source network managed by users, much like Bitcoin.
However, there are also some significant differences. The network operates through “smart contracts” written in computer code that is uploaded to the blockchain which other cryptocurrencies operate through.
Ethereum currently doesn’t sell as high as Bitcoin, with its price (as of March 2023) at $1,641.82.
Why Invest in Ethereum (Or Not)?
Ethereum is one of the safer options to invest in, ranked in the top 10 regarding price and stability.
You can also use it at more places than you may think — and within the next few years, the number of places that accept cryptocurrencies is expected to grow. Ethereum has a large existing network, a wide array of functions, and there’s constant innovation.
It may also be the best alternative to Bitcoin, particularly if you want to diversify away from an all-Bitcoin cryptocurrency portfolio. Ethereum is second only to Bitcoin in market capitalization, at $220.2 billion, compared to $548.4 billion for Bitcoin.
Ripple (XRP)
Many people like the idea of cryptocurrencies but fear their money isn’t safe in an unregulated, online world. Ripple aims to offer some of that safety.
Ripple is a money transfer and currency exchange network that processes transactions globally. And unlike most other cryptocurrencies, Ripple doesn’t need to be “mined.”
Read more: How To Mine Cryptocurrency: An Interview With a Crypto Miner
Ripple also offers fast settlement and low fees and is being used by large financial institutions (unlike other Bitcoin alternatives).
Why Invest in Ripple (Or Not)?
Ripple has been involved in a lawsuit for over a year with the SEC and the price has dropped significantly. Ripple argues it shouldn’t be treated as a security in order to avoid much stricter regulatory scrutiny. The company plans on exploring an initial public offering when the lawsuit is settled at some point in 2023.
That said, Ripple is still one of the top 10 cryptocurrencies (currently at no. 6 based on market cap). But for investment purposes, Ripple should be thought of as a cryptocurrency equivalent to penny stock — which is exactly where it’s trading.
XRP is trading at $0.535524 (as of April 2023) with a drop of over 84% from the all-time high.
But if you believe that Ripple will be a successful payment system, then its low price right now could be a key benefit.
Litecoin (LTC)
Litecoin is often thought of as a close sibling of Bitcoin. Bitcoin and Litecoin work in the same way, but there are a few key features that make them different:
Founder Charlie Lee — The founder of Litecoin is well known, unlike the anonymous creator of Bitcoin.
Speed of transactions — Lee, an engineer, designed the Litecoin system to operate about four times faster than that of Bitcoin. This means that Litecoin can confirm the legitimacy of transactions much more quickly.
Number of coins — Bitcoin has a limit of 21 million coins once all are found, but Litecoin will have 84 million.
Why Invest in Litecoin (Or Not)?
Litecoin is nearly identical to Bitcoin, but transactions are faster — which is one of its biggest draws. However, there has been discussion as to whether this speed makes Litecoin less secure.
Litecoin’s current price is $89.26 (as of April 2023), which is down over 78% from its all-time high.
The potential upside of investing in LTC is that the coin has been around since 2015 and is seen as stable.
Cardano (ADA)
Cardano is a proof-of-stake blockchain platform. It’s intended to be the next generation of the Ethereum network with a flexible blockchain and scalable platform for running smart contracts.
Cardano was introduced as an “Ethereum killer” and a valuable alternative to Bitcoin.
Charles Hoskinson, one of the co-founders of Ethereum, founded Cardano with the intent of being energy-efficient and supporting fast transactions with minimal transaction fees.
Why Invest in Cardano (Or Not)?
It may not be the best time to get into Cardano as the token has seen better days. It’s trading at $0.406295 (as of April 2023), down over 86% from the all-time high.
The upside in investing in Cardano is that it’s more energy-efficient and superior when it comes to smart contracts.
Binance Coin (BNB)
Binance is one of the largest cryptocurrency exchanges and the Binance Coin is the medium of exchange for the entire network. You can use your Binance Coin to trade and pay fees on the Binance cryptocurrency exchange. You can also use BNB on the BNB Chain ecosystem.
Binance Coin is one of the bigger players in the space (top five), with a total market capitalization of about $50 billion — although it’s primarily used to pay fees on the Binance exchange itself.
Read more: Binance.US Review
Why Invest in Binance Coin (Or Not)?
There are two factors that make Binance Coin worth considering. The first is its market capitalization. At over $42 billion and growing, it’s one of the bigger cryptocurrencies available. That’s also an indication it’s gaining acceptance in the marketplace, especially when you consider that it has been around since 2017.
The second factor is that this is a medium of exchange on the largest cryptocurrency exchange (Binance). You can use your Binance Coin to invest in the Binance Smart Chain network through Metamask if you want to get into the decentralized space.
BNB is currently trading at $316.82 (as of April 2023), down over 53% from its all-time high.
Polkadot (DOT)
Polkadot is a protocol that connects different blockchains with each other (like Ethereum and Bitcoin, for example) with the goal of weaving blockchains together. Polkadot is often referred to as a multi-chain network because it can join networks together (unlike Bitcoin).
However, Polkadot is similar to Bitcoin in the sense that it functions as both a token (DOT) and a decentralized exchange.
Polkadot wants to create an even playing field to improve innovation through the different blockchain networks. Polkadot operates by using two blockchains — a main “relay” network for permanent transactions and “para chains” for user-created blockchains.
Why Invest in Polkadot (Or Not)?
Polkadot aims to offer scalability improvements (the number of transactions per second a network can handle) and governance for protocol upgrades or changes.
What makes Polkadot a good investment is that it’s different in the sense that the network can interact with other blockchains.
With a current price of $6.32 (as of April 2023), DOT is down over 88% from its all-time high. On the flip side, the coin is up 134.37% since it started in August of 2020.
Solana (SOL)
Solana is a public and open-source blockchain. Solana is both a form of cryptocurrency and a flexible platform for running decentralized applications. The cryptocurrency SOL is used for staking and paying transaction fees on the Solana network. Solana is focused on making cryptocurrency quicker and more scalable.
Solana has become popular in the DeFi (decentralized finance) and NFT spaces among users looking for alternatives to Ethereum. NFT projects are minted and traded using smart contracts and since Solana supports smart contracts, NFT projects are popping up here.
Solana is a solution for those seeking low-cost and high-speed alternatives to Bitcoin.
Why Invest in Solana (Or Not)?
Popular NFT projects are being built on the Solana blockchain. If you’re someone who believes in NFTs, then you’re going to want to look into the Solana network.
Read more: The Complete Guide To Buying Your First NFT
Solana’s transaction speed and low costs also make it an attractive option for those looking for a Bitcoin alternative.
SOL is down over 92% at $20.73 (as of April 2023) from the all-time high, but it’s up over 4,037% since it was formed in May 2020.
Avalanche (AVAX)
Avalanche is a decentralized, open-source, proof-of-stake blockchain with smart contract functions. Avalanche touts that it’s the fastest smart contracts platform in the entire blockchain industry (from time-to-finality). Avalanche hopes to offer a highly scalable blockchain without compromising decentralization or security.
The Avalanche blockchain uses its own coin, AVAX, to cover transactions on the network.
Why Invest in Avalanche (Or Not)?
Avalanche is worth investing in if you’re looking for something new and different. The token hasn’t been around as long as some of the other forms of cryptocurrency, so it’s not as established yet, but it’s one of the fastest-growing projects.
AVAX is worth $17.60 (as of April 2023) and is down nearly 88% from the all-time high. This is up almost 528% from the day it was formed on December 31, 2020.
The Bottom Line
While Bitcoin may have once been king, there are now plenty of other cryptocurrencies on the market if you want to start investing in the space. Just remember that any coin, no matter how much buzz it’s getting, is susceptible to market fluctuations — both good and bad.
Investing in a 401(k) account offers the potential for long-term growth and financial security. However, it’s crucial to understand that this retirement savings vehicle is not immune to losses. Your 401(k) is investing in the stock market, so it’s possible to lose money over time. Here is how it works and how the markets have performed over the decades. You may want to consult with a financial advisor for your unique situation.
Can Your 401(k) Lose Money?
A 401(k) account invests in stocks, bonds and mutual funds, which are volatile assets. Therefore, your account can lose money if the companies whose stocks you hold perform poorly or a market downturn occurs. These occurrences result in a decrease in your account’s value.
Remember, investing always carries some risk and the potential for loss is inherent in any investment. However, 401(k) accounts are long-term retirement savings vehicles. So, while they can experience temporary losses, they generally have the potential for growth over the long term.
How Markets Have Performed Over Decades
The performance of the American stock market over the decades has shown a general upward trend, despite experiencing periods of volatility and market downturns. That said, past performance does not indicate future results and a wide range of factors can influence the stock market.
Historically, the U.S. stock market has exhibited long-term growth, as major indices such as the S&P 500 or Dow Jones Industrial Average represent. Over several decades, the stock market has experienced periods of significant gains and periods of decline.
For example, in the mid-20th century, the stock market experienced steady growth, with the Dow Jones Industrial Average rising about 4,000 points from 1950 to 1960. Market volatility and economic challenges, including the oil crisis and high inflation, characterized the 1970s. The 1980s and 1990s saw substantial growth, driven by technological advancements and financial deregulation. During the dot-com bubble of the late 1990s, stock prices reached unsustainable levels, resulting in a subsequent market correction.
Then, the bursting of the dot-com bubble and the events of 9/11 led to a market decline in the early 2000s. However, the stock market gradually recovered and by the mid-2000s, it reached new highs. The financial crisis of 2008 resulted in a severe market downturn, but the market rebounded in subsequent years, leading to an extended bull market that lasted until 2020.
In 2020, the COVID-19 pandemic caused a global market downturn, but central bank interventions and government stimulus measures contributed to a relatively swift recovery. The market continued to show resilience and reached new record levels in subsequent years. This trend matches the historical pattern of the stock market, which has provided about a 10% annualized return to date since its inception.
What to Do If Your Balance Drops
Experiencing a loss in your investment portfolio can be disheartening, but there are several steps you can consider taking if this happens:
Stay Cool: It’s essential to remain calm and avoid making impulsive decisions based on short-term market fluctuations. Remember, your 401(k) investments are typically long-term commitments and temporary losses can be part of the established market cycle.
Assess The Situation: Evaluate the reasons behind the loss. Is it a result of a market downturn, a specific event (such as corporate malpractice or bankruptcy), or a poor investment choice? Understanding the underlying causes helps you decide between riding it out or jumping ship if the asset will likely depreciate further.
Review Your Investment Strategy: Assess your investment strategy and determine whether it aligns with your financial goals and risk tolerance. Consider consulting with a financial advisor to evaluate your portfolio and make any necessary adjustments to your investment plan. Doing so can involve diversifying your portfolio across different asset classes, industries and geographic regions. Diversification reduces the pain when your balance takes a hit.
Consider Long-Term Prospects: Evaluate the long-term prospects of your investments. A temporary loss may not necessarily impact the fundamentals of a well-managed and fundamentally strong investment. Assess whether the reasons you invested in those assets still hold true.
Stay Invested And Avoid Panic Selling: Timing the market is a pipe dream and panic selling can often lead to missing out on market recoveries. Successful long-term investors generally stay invested, especially if their investment strategy suits their goals well.
How to Minimize Risk in Your 401K
To minimize risk with your 401(k) account, consider the following strategies:
Diversify Your Investments: Spread your investments across asset classes such as stocks, bonds, real estate and cash equivalents. Diversification mitigates the impact of any single investment’s poor performance on your overall portfolio.
Regularly Rebalance: Periodically review and rebalance your portfolio to maintain your desired asset allocation. This way, you’ll sell investments that have performed well and buy more underperforming assets to restore your desired balance. Your 401(k) automatically rebalances itself if you select a target-date fund. These funds change and mature according to your time horizon and allocate more money to conservative assets as you near retirement.
Understand Your Investment Options: Familiarize yourself with the investment options available within your 401(k) plan. Consider their historical performance, risk levels and investment strategies. Then, you can choose a mix of investments that align with your risk tolerance and long-term objectives.
Review and Adjust Contributions: Regularly review your contribution levels and consider increasing them over time if your financial situation allows it. Increasing contributions can help you take advantage of dollar-cost averaging, where you invest a fixed amount regularly, buying more shares when prices are lower and fewer when prices are higher.
Stay Informed: Keep yourself informed about market trends, economic conditions and any updates or changes to your 401(k) plan. This knowledge can help you make informed decisions and adjust your investment strategy if necessary.
Seek Professional Advice: If you are unsure about how to handle your investment losses or need guidance in adjusting your portfolio, consider consulting with a financial advisor. They can provide personalized advice based on your specific financial situation and goals.
The Bottom Line
Investing in a 401(k) account carries risks and the account can experience losses due to poor company performance or market downturns. However, historical trends have shown the American stock market to exhibit long-term growth despite periods of volatility generally. When your investment portfolio loses value, it’s important to remain calm, assess the situation, avoid panic selling and seek professional advice. These strategies can help minimize risk and optimize your 401(k) savings for long-term growth and financial security.
Tips for Minimizing 401(k) Losses
Allocating assets and choosing between fund types can be challenging. Fortunately, a financial advisor can develop a retirement plan and help you find assets that match your priorities. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Having a 401(k) is an ideal foundation for a retirement plan. However, knowing how much you should contribute to your 401(k) can be unclear.
Ashley Kilroy
Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.
Mortgage rates dropped this week after a three-week climb, as rates remain volatile amid conflicting economic indicators.
The 30-year fixed-rate mortgage averaged 6.71% in the week ending June 8, down from 6.79% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed rate was 5.23%.
“While elevated rates and other affordability challenges remain, inventory continues to be the biggest obstacle for prospective homebuyers,” said Sam Khater, Freddie Mac’s chief economist.
With rates much higher now than the fixed rate that many current homeowners bought or refinanced into, they are reluctant to put their homes on the market and trade their ultra-low interest rate for something much higher. This is leading to low inventory of homes to buy.
Mortgage rates topped 5% for the first time since 2011 a little more than a year ago and have remained over 5% for all but one week during the past year. Since then they have gone as high as 7.08%, last reached in November. Since mid-March, rates have gone up and down but stayed under 6.5% until last week.
The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.
All eyes on the Fed
Mortgage rates are experiencing daily fluctuations driven by volatility and uncertainty in the economy, said Jiayi Xu, an economist at Realtor.com, and climbed following the trend of 10-year Treasury yields, as investors evaluate the possible direction of Federal Reserve interest rate policy at its meeting next week.
In speeches last week Federal Reserve officials mentioned skipping a rate hike in June, enabling the Fed to gather more data before making any decisions, said Xu. While the comments are not official policy, she said, “by framing the discussion in terms of “skipping” rather than “pausing,” policymakers are indicating that the current interest rate may not have reached its peak for this particular economic cycle.”
The Fed does not set the interest rates that borrowers pay on mortgages directly, but its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasuries, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.
More hikes may be necessary to cool inflation and the hot job market.
“May’s jobs report reflected another month of stronger employment activity with higher-than-expected net new jobs added to the market,” said Xu. “However, the simultaneous rise in the unemployment rate in May showed mixed signals in the labor market, indicating the complexities involved in interpreting economic data and introducing uncertainties in the upcoming Federal Reserve policy decisions.”
Xu added: “While the potential for another rate hike raises the prospect of increased mortgage rates, the objective of curbing inflation will ultimately lead to a decline in mortgage rates, bringing much-desired stability to the market.”
Mortgage applications decrease
Home buyers remain sensitive to mortgage rate spikes, with mortgage applications dropping last week, according to the Mortgage Bankers Association.
“The housing market has gotten off to a slow start this summer due to higher mortgage rates, low inventory, and economic uncertainty,” said Bob Broeksmit, MBA president and CEO. “The labor market continues to be exceptionally strong, which could bring more buyers back into the market once rates move away from their recent highs.”
But they’ll have to come down significantly before some home buyers get in the market.
The most common mortgage rate that is cited as comfortable for potential buyers constrained by finances was between 3% and 3.25% — less than half of today’s level — according to a new survey by Realtor.com and Censuswide.
“Even for individuals with plans to purchase within the next year, almost 80% of them expressed concerns about being priced out of the market if housing prices and mortgage rates continue to rise,” said Xu. “Consequently, affordability will play a crucial role in helping them achieve their goal of purchasing a home.”
My husband and I are in the early stages of building a house. As we modify our floor plans, the amount we’ll need to borrow to build is on our minds. It’s probably going to be the most expensive thing we’ll ever purchase, and we need to decide what we want to borrow and what loan term we’ll want.
The main differences between 15- and 30-year loans are straightforward. Fifteen-year loans have higher monthly payments, but you pay less interest, while 30-year terms have lower monthly payments, but you pay significantly more for the house in the long run. As with most areas of personal finance, however, this decision is about more than just the math. There are other important considerations, such as retirement savings, risk tolerance, and discipline.
First, let’s take a look at the hard figures.
Crunching the Numbers
Let’s say that a 30-year-old borrower is buying a house for $160,000, and her marginal tax rate is 25 percent. At the time this article was written, 30-year loans were at 5 percent and 15-year loans were at 4.5 percent.
Using a mortgage calculator, we’ll compare the two mortgage terms by plugging in the mortgage amount and the 15- and 30-year interest rate.
A 30-year term would give a monthly payment of $859 (payment does not include taxes and insurance, which vary by locale). The borrower would pay $149,211 in interest, and $309,211 over the life of the loan.
A 15-year term would give a monthly payment of $1224. She’d pay $60,318 in interest, and $220,318 over the life of the loan.
The 30-year term lowers the monthly payment by $365 and will save the borrower $238 per year in taxes, but will cost $88,893 more in interest over the life of the loan, and she will own her home when she is 60 years old. The benefits of the 15-year term are the substantial savings in interest and the fact that she will own her home by the time she’s 45. The drawback is that her monthly payment will be higher.
The Wiggle-Room Option
But what about the option of taking a 30-year term and paying it off in 15 years? A 30-year term paid in 15 years would yield a monthly payment of $1265. The borrower would pay $67,749 in interest, and $227,749 over the life of the loan. She’ll own her home at age 45, assuming she makes the extra payment each month. But if she fell on hard times, she wouldn’t be locked into the higher payment.
Here’s a Comparison of Each Option:
It’s easy to see that the borrower will pay less for her home with the 15-year loan. But mortgages aren’t one-size-fits-all. There are other factors to consider when deciding what is right for you.
What Can You Afford?
In our example, the 30-year term works out to a monthly payment of $365 less than the 15-year term. If you couldn’t comfortably make the payment on the 15-year term, the 30-year term is the better option. You can always make extra payments when possible.
What is the State of Your Emergency Fund?
Once you sign the loan, you’ll be expected to make the same payment each month. If you take a 15-year term with a higher payment, you should have a substantial savings account in place to mitigate the risk from major unexpected expenses or job loss.
If you don’t have much of an emergency fund, you’re better off with a 30-year term, using the extra money to build your savings.
Will You be Able to Meet Your Retirement and Other Savings Goals?
If you’re leaning toward a 15-year term, be sure that you can still max out your retirement accounts and meet your other savings goals. If you can’t, stick with the 30-year term.
On the other hand, if retirement is still decades away, you are in a position to invest more aggressively. You should be able to ride out the volatility of relatively aggressive investments.
If retirement is less than 15 years away, it might be better to pay off the mortgage early for security and peace of mind.
How Do You Feel About Debt? What is Your Tolerance for Risk?
Many people are strongly averse to debt of any kind — and with good reason. Dave Ramsey is firmly in this camp, saying:
Don’t borrow money. Period. If I can’t get you to postpone the purchase that long, I strongly suggest you save a down payment of 20 percent or more, choose a 15-year (or less) fixed-rate mortgage, and limit your monthly payment to 25 percent or less of your monthly take-home pay.
Managing debt isn’t easy, and for many people, Ramsey’s hardcore anti-debt stance is the way to go.
But others are in a different place in the financial journey and are comfortable carrying mortgage debt if the borrowed funds can earn a higher rate of return somewhere else. Risk-adjusted returns need to be factored, but essentially, if you opted for the 30-year term at 5 percent, it’s reasonable to think you can earn a higher return with a portfolio of index funds. Account for the tax deductions and the 5 percent is even lower.
While it’s certainly possible to earn a higher return elsewhere, it comes down to your appetite for risk. You might get a better return by going with the 30-year term, but putting the money toward the mortgage is risk-free. Also, you have to decide if the extra money you might gain by investing elsewhere is more important to you that the peace of mind that comes with owning your home outright.
Personal Discipline
If you can afford the payments on a 15-year loan, but you’re concerned about the possibility of job loss or other major financial hits, you might be hesitant to commit to the higher payments. Another option is to take a 30-year term and pay it off in 15 years. You’ll pay slightly more in interest than with the 15-year interest rate, but still significantly less than with the 30-year loan.
The drawback is that most people lack the discipline. According to the Federal Deposit Insurance Corporation (FDIC), 97.3 percent of people do not consistently pay extra on their mortgages. Many people lack the discipline to send in the extra money every month when it’s not mandated by the bank. What this statistic doesn’t mention is how many of the 97 percent would have fallen behind on their mortgages if they were locked into a 15-year mortgage.
If you are already saving regularly and have only tapped your emergency fund for major unexpected expenses, however, you might have the discipline to pay your mortgage off in 15 years. But consumers who spend any monthly savings are better off with the shorter term if they can afford it.
What About the Tax Break?
While it’s true that you do get more of a tax break from a 30-year loan, it shouldn’t be the main consideration when deciding on a term. The 30-year borrower will pay less in yearly taxes than the 15-year borrower, but that’s because the 30-year borrower is paying significantly more interest.
In our example, the borrower would save an average of $238 per year in taxes with the 30-year loan, but will pay $88,893 more in interest over the life of the loan than she would with the 15-year term.
Which is Right For You?
In the end, your financial situation will determine the right mortgage term. If you can make the higher payment, have a substantial emergency fund, and can meet retirement and other savings goals, a 15-year mortgage is a good way to own the home in half the time and pay substantially less interest.
If just one of those conditions is not met, or if you are somewhat comfortable with debt and risk and wish to get a higher rate of return with other investments, the money saved each month with the 30-year mortgage payment may be better used elsewhere. You can always send in extra payments.
I’m still not sure which option is for us. What about you? Do you have a 15-year mortgage or 30-year mortgage? Do you prepay? What are your thoughts on risk versus higher returns?
The Federal Open Market Committee on Wednesday raised the federal funds rate for the first time in four years, marking an end to the easy money that gave rise to the hottest mortgage market in U.S. history.
The FOMC, as was predicted, raised the federal funds rate by 25 basis points to 0.25-0.50 percent, the first time the FOMC has changed the federal funds rate in two years, and the first rate hike since March 2018.
The move, designed to slow the pace of inflation, which reached 7.9% for the year that ended in February, is sure to increase the cost of mortgage borrowing. Whether it slows the frenetic pace of a housing market with historically low supply is yet unclear.
“The Fed worked to ensure today’s announcement would not be a surprise, with the rate hike following a series of foretelling decisions, including its acceleration of asset tapering in December through the end of its asset purchase program earlier this month,” Realtor.com‘s chief economist Danielle Hale said in a statement following the announcement.
“The Fed’s language in its public statements has also prepared markets for rate increases by consistently focusing on above-target inflation and progress against labor market goals. This also meant that mortgage rates have largely adjusted for the first hike, and I don’t expect a spike following the latest announcement.”
Beyond the initial 25 bps rate hike, the Fed also said it planned to raise rates six additional times in 2022 and three times in 2023, giving more certainty to investors in the secondary market, which should help ease overall volatility somewhat.
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“With the unemployment rate below 4%, inflation nearing 8% and the war in Ukraine likely to put even more upward pressure on prices, this is what the Fed needs to do to bring inflation under control,” said Mike Fratantoni, chief economist of the Mortgage Bankers Association. “The FOMC economic projections indicate slower growth and higher inflation than had been the expectation at their December meeting. Note that they do not expect to be back at 2% inflation until after 2024.”
Big questions remain, however. It’s still not entirely clear how quickly the Fed will unwind its $9 trillion balance sheet. The Federal Reserve said it would “begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting,” but did not get more specific.
“Although we anticipate that shrinking the balance sheet will begin this summer, we will be looking for details regarding the pace of the runoff and whether they would consider active MBS sales at some point to return to an all-Treasury portfolio,” said Fratantoni.
The purchases of Treasuries and MBS, which ended this month and were designed to support the economy during the Covid-19 pandemic, helped the housing and mortgage markets reach never-before-seen heights.
Fueled by a sharp drop in mortgage rates during the pandemic, the U.S. mortgage industry funded $4.1 trillion in new loans in 2020 (64% refis, 36% purchases), and $3.9 trillion in 2021 (57% refis, 43% purchases), according to the MBA.
But refi applications fell to about one-third of rate locks in February, and lenders have switched gears to serve a heavy purchase market. And that market is largely defined by a dearth of inventory.
On Friday, Zillow reported that overall housing inventory dropped to 729,000 home listings in February, a 25% drop year-over-year and a 48% fall since February 2020. It was the fifth consecutive drop in inventory.
Though the rise of mortgage rates – the MBA anticipates rates to hover around 4.5% for the next year – will force some would-be buyers out of the purchase market, other factors appear more important.
“Mortgage rates have already been increasing for many reasons — improving economy, higher inflation expectations and Fed tightening,” said Odeta Kushi, deputy chief economist of First American Financial. “As rates rise, some buyers on the margin will pull back from the market and sellers will adjust price expectations, resulting in a moderation in house price appreciation.”
But, Kushi added: “The other implication of a rising mortgage rate environment is the rate lock-in effect. Many homeowners have locked into historically low rates, and are less likely to move as rates move higher — this does not bode well for housing supply.”
Interest in residential mortgages fell 1.2% for the week ending March 11 as mortgage rates rose to their highest levels since May 2019, according to the Mortgage Bankers Association‘s latest survey.
“Mortgage rates continue to be volatile due to the significant uncertainty regarding Federal Reserve policy and the situation in Ukraine,” said Joel Kan, associate vice president of economic and industry forecasting for the MBA. “Investors are weighing the impacts of rapidly increasing inflation in the U.S. and many other parts of the world against the potential for a slowdown in economic growth due to a renewed bout of supply-chain constraints.”
Mortgage rates, which recently hit 4.27% for 30-year-fixed rate mortgages, are now a full percentage point higher than a year ago. That’s led to a significant decline in refinance activity, both for conventional and government loans.
According to the MBA, refi applications fell 3% from the prior week and were down 49% from a year ago. The seasonally adjusted purchase index increased 1% from one week earlier; the unadjusted purchase index increased 2% from the prior week but was 8% lower than the same week a year ago, largely due to a decline in inventory.
“Purchase applications slightly increased, with both conventional and VA loan applications seeing gains,” said Kan. “The average purchase application loan size remained elevated at $453,200 – the second- highest amount in MBA’s survey.”
The MBA found that the adjustable-rate mortgage share of the activity increased to 5.6% of total applications.
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The FHA share of total applications remained unchanged at 8.7% from the week prior, and the share of VA applications increased to 10.5% from 10.4%.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 4.02% from 3.79%, with points decreasing to 0.37 from 0.39 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The survey showed that the refi share of mortgage activity decreased to 48.4% of total applications last week, from 49.5% the previous week.
Inside: Are you looking for ways to make money quickly and easily? This guide has a variety of tips and tricks to help you make 1000 a day.
Making money is something that everyone is interested in. And why wouldn’t we be? Money gives us the ability to buy the things we want, travel, and live a lifestyle that most people can only dream of.
But what if I told you that it was possible to make $1000 a day? Would you believe me?
Well, in this blog post, I’m going to show you some of the best ways to make money really fast.
So if you’re looking to make some quick cash or consistent income, then this is the post for you!
In this post, I will share with your some of the best ways that I know of to make money $1k a day on a regular basis.
So if you’re ready to learn how to make 1000 a day, then let’s get started!
Is it possible to make $1000 a day?
Yes, it is possible to make $1000 a day.
In fact, this is something I regularly do (see picture to prove it).
However, achieving this goal requires commitment, hard work, and a solid plan. Factors that contribute to achieving this goal include finding a method that works for you, sticking with it, and putting in the necessary effort.
Additionally, having a unique skill set and interest in a particular method can increase the chances of success.
How to make $1000 a day?
Making $1000 a day is an appealing goal for many people, whether it’s a one-time need or a consistent source of income. Fortunately, there are several ways to achieve this goal.
Here are the top ways to make $1000 a day:
Start a high-paying job: Some jobs pay over $300k a year, and while they may require advanced degrees and education, there are also a few that don’t require a college degree.
Offer high-value services: You can offer services such as pet-sitting, tutoring, design work, or writing to make money.
Start a business: You can start a business that generates $1000 a day, such as a digital marketing agency, freelancing, or a service-based business.
Sell items you no longer need: You can sell items on eBay, Craigslist, or other online marketplaces to make quick cash.
Let your money work for you: You can invest in stocks and shares, real estate, or property to earn upwards of $1000 a day.
While each method has its own advantages and disadvantages, with the right strategy and dedication, making $1000 a day is achievable.
So, get started today and see how much money you can make.
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Best ways to make 1000 a day
We’ve compiled a list of our favorite ways to make money really fast – specifically $1k a day!
Many times, you will have to invest 100 to make 1000 a day.
If you’re looking for ways to make some extra cash, or even earn a full-time income, this post is for you.
1. Freelance Writing
Freelance writing is a great way to make extra money or even replace your full-time job. There are various types of content that freelance writers can specialize in, such as long-form content or shorter direct-response copywriting.
With freelance writing, you can earn over $.50 or even $1 per word, which means that a 1,000-word article could net you $1,000 quickly.
To start, you need to establish a portfolio of your work to pitch to new clients. This portfolio should include links to any relevant articles or copy you’ve written that’s related to the client you’re pitching. If you don’t have a portfolio yet, you might need to do some work at lower rates to get your foot in the door.
Even if you don’t consider yourself a writer, don’t strike it off the list just yet. With the right approach and mindset, anyone can become a successful freelance writer.
2. Crafting
Crafting offers many benefits beyond just making extra cash. It allows for flexibility in your schedule, creativity in your work, and the ability to turn a hobby into a lucrative business.
If you are creative and have a talent for creating handmade items, then starting a crafting business is the perfect way to monetize that skill by doing something you enjoy. There are plenty of crafts to choose from and you may even become an instructor!
The most difficult side is you are trading your time for money and it may be difficult to scale.
3. Day Trading Stocks
Day trading stocks is a high-risk, high-reward investment strategy that involves buying and selling stocks within a single trading day. It requires a great deal of knowledge, discipline, and risk management to be successful.
However, there is a large group of us who have made the $1000 in a day club.
Successful day traders use a combination of technical analysis, risk management, and discipline to make profitable trades.
This choice requires discipline, a proper trading education, knowledge, and risk management.
Trade and Travel with Teri Ijeoma is a popular course that investors can take to learn about trading stocks and options and begin their journey to making $1,000 a day.
4. Trading Options
Trading options can be a lucrative way for seasoned investors to make money.
With options, investors can speculate on different stocks with only a fraction of the investment capital needed to buy the stocks outright.
Investors who are familiar with investing in individual stocks can take the next step in the process by trading options. While options may seem exotic on the surface, they are a common tool used by seasoned investors and are especially valuable during volatile activity in the stock market.
To trade options successfully, investors need research skills, investing knowledge, discipline, and patience.
Trading options can be a high-risk option, especially for those who lack expertise in the area. However, it can be extremely lucrative for those who have experience and knowledge in the stock market.
Investors should consider taking courses to learn more about trading options.
5. Youtube
YouTube can be a great source of income for those who are willing to put in the effort to create quality content. It offers multiple ways to generate revenue, including sponsorships, affiliate marketing, and Google Adsense.
With the right approach, it’s possible to make $1000 or more per day on YouTube.
Remember, success on YouTube takes time and hard work, but the potential rewards are significant.
6. Selling on Amazon
Selling products on Amazon can be a highly profitable business opportunity.
Amazon FBA, or Fulfilled by Amazon, is a business model where you send your inventory to Amazon warehouses and they handle the rest, including storage, shipping, customer service, and returns.
This makes it a great option for digital nomads and those looking to scale their business quickly.
With an average profit margin of $20 per sale, it’s possible to make $1,000 per day by selling just 5 units per day of 10 different products.
7. Sell Printables Online
Selling printables online has become a popular way to make passive income.
With the rise of digital products, creators can sell anything from coloring pages to budget spreadsheets on platforms like Etsy. Thousands of creators make a living selling digital products, and it’s easy to see why.
Learn how these sellers got started.
The key is to pick a topic you’re knowledgeable in and passionate about, so you can create high-quality products that people will want to buy.
8. Dropshipping
Dropshipping is one of the best ways to make $1000 a day, especially for those looking to start a business with minimal initial investment.
This business model allows entrepreneurs to sell products to customers without ever holding a single piece of stock.
Dropshipping is a viable and profitable business model that can generate high profits without the hassle of managing inventory. With the right niche, platform, supplier, and marketing strategy, entrepreneurs can make $1000 a day or more with dropshipping.
9. Consulting
Consulting is one of the best ways to make $1000 a day!
It’s a lucrative career option that allows you to provide expert advice to clients and help them solve problems.
The first step to becoming a consultant is to determine your area of expertise. This could be anything from personal finance to marketing to human resources. Your expertise should be something that you have significant knowledge and experience in.
One of the most important aspects of becoming a consultant is building your network. This includes reaching out to potential clients, attending networking events, and connecting with other professionals in your field.
10. Become a Virtual Assistant
Being a virtual assistant can be a great way to make money while setting your own hours.
As a virtual assistant with no experience, you can work from home and typically on your own schedule. You can choose to work part-time or full-time based on your availability and the workload of your clients.
The tasks that you are asked to perform as a virtual assistant can vary widely, but commonly needed skills include administration, accounting and bookkeeping, marketing, communications, customer service, and many other capacities.
You don’t need special skills or training for this job, as most clients will bring you up to speed on what they need to do. However, having organizational, communication, and time-management skills can be helpful.
Check out the checklist to get started as a virtual assistant.
11. Side Hustles
Side hustles are a great way to earn extra income and supplement your regular income. With a little effort and some creativity, you can make up to $1000 a day with certain side hustles.
Here are some of the best side hustles that can help you achieve this goal:
Deliver food: You can make good money by delivering food with these apps. You can choose your own hours and work as much or as little as you want. DoorDash is a great option.
Drive with ridesharing apps like Uber and Lyft: If you have a car and some free time, you can earn money by driving people around. You can make up to $1000 a day, depending on how much you work.
Pet sit or walk dogs: If you love animals, you can make money by pet sitting or dog walking through Rover.com. You can earn up to $50 per day, depending on the services you offer.
Babysit or tutor: If you have experience with children or are good at a particular subject, you can offer your services as a babysitter or tutor through Care.com. You can make up to $50 per hour, depending on your qualifications.
Side hustles are a great way to make extra money and reach your financial goals.
12. Start a Business
Starting a business is one of the most effective ways to make 1000 dollars a day on a regular basis. However, it requires careful planning and execution to succeed.
The first step is to research the market and identify a profitable business idea and build it to profitability.
Challenges may arise, such as competition, financial setbacks, and marketing difficulties, but with persistence and determination, you can overcome them and achieve financial success.
The potential for significant financial gain from starting a successful business is immense, making it a worthwhile endeavor for anyone willing to put in the effort.
13. Yard Work
Yard work is an excellent way to make $1000 a day, especially if you have some extra time and don’t mind getting dirty.
If you want to get up and running quickly, there is nothing better than a local side hustle to earn extra money such as mowing lawns in your neighborhood.
Mowing lawns is not only a great side hustle for adults but also for teens. For an average size lot, you could expect to make at least $35. If you could line up a few lawns each weekend, you could easily make an extra $1000 each month.
Landscaping, leave pickup, and bush trimming are all simple tasks that you can complete quickly if you have the right equipment. You can choose to set an hourly rate or get paid for the entire job, depending on the task.
You may have to start hiring crews in order to hit $1k a day.
14. AirBnb or VRBO Rentals
Airbnb or VRBO are popular platforms for renting out your property to travelers.
Many successful hosts have earned $1000 or more per day because they have accumulated more than one property.
One tip for success is to garner excellent reviews that people want to come back time and time again.
15. Affiliate Marketing
Affiliate marketing is a lucrative way to make money online and has the potential to earn you $1000 a day.
This works well for influencers who have a reach of thousands of people. Another way is creating a niche website that focuses on a specific product or market segment.
It’s essential to promote products effectively to generate revenue. Successful affiliate marketers have earned six figures or more per year.
16. Flip Products or Retail Arbitrage
Retail arbitrage is a popular business model that can help you make $1,000 per day or more. The premise is simple – buy or find things cheap and resell them for a higher price.
This is a great example of how to flip money.
To be successful, you’ll need to have an eye for the right product and do product research to choose products that will sell.
Here is a list of the most popular items to flip.
17. Pickup Services
Pickup services refer to businesses that provide transportation and delivery services for goods, furniture, or other items. These services are in high demand, especially in urban areas where people are always on the move and need help with moving heavy or bulky items.
Starting a pickup service business requires some equipment, such as a truck or van, and marketing strategies to attract customers.
So, if you are looking for a new side hustle or business opportunity, consider pickup services as a viable option.
18. Casino Gambling
While casino gambling is not a recommended way to make $1000 a day, it is still worth mentioning as a potential option.
However, it is important to note that gambling should always be done responsibly and within one’s means.
If you are considering casino gambling as a way to make quick money, it is essential to understand the most profitable games and their strategies. Here is an ordered list of the best casino games to play to make money:
Blackjack: This game has one of the lowest house edges, making it a popular choice for professional gamblers. The objective of the game is to beat the dealer’s hand without going over 21. The key to winning at blackjack is to use basic strategy, which involves making the mathematically correct decisions based on the dealer’s upcard and your own hand.
Craps: This game has a low house edge and offers a variety of betting options. The objective of the game is to predict the outcome of a roll or series of rolls of the dice. To win at craps, it is essential to understand the different bets and their odds and to follow a betting strategy that suits your playing style.
Baccarat: This game is easy to learn and has a low house edge. The objective of the game is to bet on the hand that will have a total of 9 or closer to 9. The key to winning at baccarat is to understand the different bets and their odds and to follow a betting strategy that suits your playing style.
When playing these games, it is important to practice good bankroll management by setting a budget for yourself and sticking to it. It is also crucial to know when to quit to avoid losing money.
A winning streak can lead to making $1000 a day, but it is important to be cautious and not get carried away.
19. Freelance Graphic Design
Graphic designers create visual concepts using computer software or by hand to communicate ideas that inspire, inform, and captivate consumers. They work on various projects such as branding, marketing materials, website design, and more.
Freelance graphic design is a lucrative option because there is always a demand for graphic design services, and businesses are willing to pay top dollar for high-quality designs.
By building a strong portfolio, staying up-to-date with the latest design trends, and providing excellent service to your clients, you can earn a substantial income as a freelance graphic designer.
20. Make Money Flipping Items
Flea market flipping is a great way to make some extra cash on the side or even turn it into a full-time business. It involves buying items for a low price and reselling them for a profit.
One couple, Rob and Melissa Stephenson, have become full-time flea market flippers and even host their own website, Flea Market Flipper, to help others find success in the venture. They offer several courses to help individuals turn this into a serious side hustle or even a full-time business earning six figures.
Learning from successful flea market flippers like Stephenson’s can be a great way to get started. They have the skills and knowledge to help individuals find valuable items, network, and use social media and photography to their advantage.
21. Photography
Photography is a lucrative career option that has the potential to generate high income or as a side hustle.
There are different types of photography that one can explore to make money, including wedding photography, family photography, real estate photography, and stock photography.
By building a strong portfolio, networking, finding clients, investing in high-quality equipment, and constantly improving your skills, you can become a successful photographer and make a great income. Don’t underestimate your potential in this field.
22. Rental Income
Passive income through rental properties is a great way to generate consistent long-term income. Here are the steps to follow in order to make $1000 a day through rent income:
Find a suitable property: Look for properties that are priced reasonably, require minimal renovations, and are located in areas with high rental demand. You are likely to start making $1000 a month.
However, the earning potential is dependent on the ability to scale multiple properties, keep them occupied, and increase monthly income streams.
Investing in rental properties can be a lucrative and rewarding experience for those willing to put in the effort.
23. Amazon Merch
Amazon Merch is a platform that allows you to create and sell your own merchandise on Amazon. It’s an excellent way to make money because Amazon handles all of the heavy lifting, such as printing, shipping, and customer service.
Using Amazon Merch, you can sell a variety of products from t-shirts to phone cases, and best of all, you don’t need to invest in inventory or equipment.
All you need to do is create the designs.
Successful Amazon Merch sellers include graphic designers, artists, and entrepreneurs who have created unique and appealing designs that resonate with their target audience.
24. Creative Skills like Video Editing
Creative skills can be a valuable asset when it comes to generating income. Video editing is another skill that can be monetized.
With the rise of video content, businesses, and individuals are always in need of skilled video editors. One can offer video editing services for YouTube creators, and businesses, or even edit personal videos for clients.
Freelance platforms like Upwork and Fiverr are great places to find video editing jobs.
25. Fashion Design
Fashion design is one of the most lucrative ways to make money, and it’s an industry that’s always in demand.
Whether you’re interested in starting your own fashion label, working for a fashion house, or becoming a freelance designer, there are plenty of opportunities to make a living in this field.
Marketing yourself is also key to success in fashion design. Use social media platforms like Instagram and Pinterest to showcase your work and build a following.
Networking is also an important part of building a successful career in fashion design. You must stay up-to-date on industry trends, make valuable connections, and potentially land new clients or job opportunities.
Create a website or blog where you can share your designs, offer fashion tips, and connect with potential clients.
Pay attention to industry trends, stay creative and original, and focus on developing your skills and building your brand. Then, there are plenty of opportunities to make a living in this exciting and dynamic industry.
26. Start a Blog
Many people say blogging is dead. But, it’s not.
Starting a blog can be a great way to share your interests, skills, and experiences with others while also creating a new income stream for yourself. The flexibility of blogging allows you to turn your current job or passion into a successful blog.
However, starting a blog can be challenging, and it requires technical knowledge, writing ability, social media skills, and topical expertise.
Once you have started your blog, it’s essential to treat it like a business and monetize your content.
27. Self-Storage Business
Self-storage business is a lucrative venture that involves renting out storage units to customers who need extra space for their belongings. These businesses are in high demand, especially in urban areas where living spaces are often small and cramped.
In fact, the self-storage business is expected to bloom to $64.17 billion by 2026.
Starting a self-storage business can be a profitable venture if done correctly.
28. Invest in Cryptocurrencies
Cryptocurrencies have gained popularity as a potential source of significant income. Bitcoin, Ethereum, and Litecoin are some of the best cryptocurrencies to invest in.
To invest in cryptocurrencies, one must first set up a digital wallet and choose a reputable exchange such as Coinbase or Bitstamp.
It is important to research the market and understand the volatility of cryptocurrency before investing. While the potential for high returns exists, it is important to approach cryptocurrency investing with caution.
29. Invest in Real Estate
Investing in real estate can be a lucrative way of making money.
To make $1000 a day through real estate investing, there are several steps you can take.
First, set aside a few hundred dollars each month to invest in real estate over time.
Second, consider the different types of real estate investments available, such as rental properties, commercial properties, and fix-and-flip properties. Each investment type has its own advantages and disadvantages, so it’s important to research and choose the one that fits your financial goals.
Third, consider investing in real estate investment trusts (REITs) or crowdfunding platforms like Fundrise, which allow you to invest in real estate without purchasing a property.
Remember that investing in real estate carries a degree of risk, so it’s important to do your research and seek advice from successful real estate investors.
30. Make Money on the Internet
Making money online has become a popular option for those looking to earn a substantial income. The internet provides a wealth of opportunities for anyone with an internet connection and a bit of creativity.
You need to learn how to make money online for beginners.
There are so many options today and you never have to leave your house!
When it comes to making $1000 a day online, it’s important to acknowledge that it’s not a quick or easy process. It takes time and effort to build a successful online business or generate significant income through freelance work or other online opportunities.
However, with dedication and hard work, it is possible to achieve your financial goals.
How to make $1,000 really fast?
If you’re in a financial bind and need to make $1,000 quickly, there are several options available to you.
Here are the top ways to make $1,000 a day quickly:
Sell items on eBay or Craigslist: If you have items that you no longer need, consider selling them online. This could include clothes, furniture, or electronics. This is a quick and easy way to make money fast.
Offer freelance services: You can offer services such as tutoring, design work, or writing. If you have a specific skill or talent, you can find customers online who are willing to pay for your services.
Do odd jobs for people in your community: You can offer to mow lawns, rake leaves, or shovel snow for a fee. This is a great way to make money quickly, especially if you live in an area with a lot of homeowners.
Participate in paid focus groups or surveys: This is a great way to make money quickly without leaving your home. Companies are always looking for feedback on their products and services, and they are willing to pay for it.
Rent out a room in your home on Airbnb: If you have a spare room in your home, you can rent it out on Airbnb and make money quickly. This is a great option if you live in a popular tourist destination.
Manage social media accounts: Many businesses need help managing their social media accounts, and they are willing to pay for them. If you have experience with social media, this could be a great way to make money quickly.
Start a blog: If you have a passion for writing or a specific topic, you can start a blog and sell advertising space or products/services to your readers. This takes some time to build up, but it can be a lucrative way to make money in the long run.
Sell handmade crafts or goods online: If you’re crafty, you can make items and sell them online, such as on Etsy. This is a great way to turn your hobby into a money-making opportunity.
Borrow money from friends or family: This is not an ideal option, but if you’re in a bind and need money quickly, consider asking for a loan from someone you trust.
Pawn items for cash: This is a last resort option, but if you have items of value, you can pawn them for cash quickly.
Don’t be afraid to try different methods and see what works best for you.
This is the perfect side hustle if you don’t have much time, experience, or money.
Many earn over $10,000 in a year selling printables on Etsy. Learn how to get started by watching this free workshop.
If you’ve ever wanted to make a full-time income while working from home, you’re in the right place!
This intensive training combines thousands of hours of research, years of experience in growing a virtual assistant business, and the power of a coach who has helped thousands of students launch and grow their own business from scratch.
FAQ
Passive income is a form of earnings that is generated without active involvement.
It is a way to make money while you sleep and can provide financial stability and independence.
This is one of three types of income and the one you want to strive towards building.
Ultimately, the best side hustle for making $1000 a day is one that meets your needs and interests while providing a good return on investment.
Here are several factors to consider before choosing the best option.
Think about your skills, interests, and availability. If you have a full-time job, you may want to consider a side hustle that allows you to work flexible hours.
Next, consider the earning potential of the side hustle you are considering. Some side hustles pay more than others, and you want to choose one that will give you the highest return on investment.
Additionally, consider the start-up costs associated with the side hustle. Some require significant investment, such as buying a car for ride-sharing apps or purchasing an online course.
Most importantly, choose a side hustle that aligns with your passion and expertise. This will make the work more enjoyable and increase your chances of success.
There are many ways to make money from your expertise.
You can start a consulting business, offer services such as coaching or speaking, create and sell information products, or build a following and sell advertising or sponsorships. The possibilities are endless.
What’s important is that you start somewhere and then take action to turn your expertise into cash.
Ready to Make 1000 in a Day?
There are many ways to make money quickly and easily.
The best way to make money fast is to find a way that best suits your skills and interests.
Whether it’s graphic design, content creation, photography, or trading stocks, there are plenty of opportunities to turn your passions into profit. So, start honing your skills and explore the endless possibilities of the gig economy.
Learning how to make quick money in one day is possible. You just need to be determined and disciplined.
So, which method do you choose on how to make $1k a day?
Know someone else that needs this, too? Then, please share!!
As the Federal Reserve raised short-term rates for the first time in years, mortgage rates climbed 31 basis points to 4.16%, according to data from Freddie Mac‘s PMMS survey.
“The 30-year fixed-rate mortgage exceeded four percent for the first time since May of 2019,” said Sam Khater, Freddie Mac’s chief economist. “The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year. While home purchase demand has moderated, it remains competitive due to low existing inventory, suggesting high house price pressures will continue during the spring homebuying season.”
During a highly anticipated meeting on Wednesday, the Federal Reserve raised the benchmark rate a quarter of a percentage point. The Fed said there would likely be six more rate hikes in 2022 and three more in 2023, the primary tool the central bank is using to reduce inflation, which climbed to a 40-year high in February, at an annual rate of 7.9%.
The 30-year-fixed rate rose 31 points from 3.85% for the week ending March 17, according to Freddie Mac. A year ago, the 30-year averaged 3.09%. Freddie Mac assumes borrowers bought 0.8 mortgage points on their loan.
The 15-year fixed-rate mortgage averaged 3.39%, up from 3.09% last week. A year ago, the 15-year fixed-rate mortgage averaged 2.40%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.19% with an average of 0.2 points purchase by borrowers, 22 basis points higher last week. A year ago, the 5-year ARM averaged 2.79%.
The increase in rates in recent months has dramatically chilled refinancing activity in the mortgage market. According to the Mortgage Bankers Association, refi applications this week are down 49% from a year ago, and rate lock data from Black Knight found that refis in February were down to just about one-third of mortgages.
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The seasonally adjusted purchase index increased 1% from one week earlier; the unadjusted purchase index increased 2% from the prior week but was 8% lower than the same week a year ago, largely due to a decline in inventory.
Still, it remains to be seen whether the spoke in mortgage rates back to 2019 levels will chill the purchase market, which in many markets is still defined by low inventory, multiple offers and bidding wars. Zillow reported late last week that inventory dropped to 729,000 home listings in February, a 25% drop year-over-year and a 48% fall since February 2020. It was the fifth consecutive drop in inventory.
While mortgage rates will chill the refi market, the Federal Reserve laying out a clear path ahead should stem some of the volatility with mortgage rates, which have been on a rollercoaster ride for over a month.