When you buy stocks, someone involved has to pay a commission, unless you work on the floor of the stock exchange as a trader. Licensed brokers must initiate the trade, and they get a cut. How much commission you pay for your stock purchases, however, varies widely. I’ll talk a little about four ways to … Read more
I ran across a couple of threads at Financial-Planning.com about Missed Fortune 101 by Douglas Andrew. If you’ve read my previous posts about this book, you know that I’m not a big fan of this book. Anyway, here are a couple of threads by financial planners — some of them very heavily credentialed — that … Read more
How about “[a]n interest-only, payment skipping/minimum-payment-option-enabled, negatively amortizing, no-money-down, no documentation, prepayment-penalizing, 3-month LIBOR 40-year adjustable-rate mortgage with a balloon?” Let’s break this down, shall we? Interest-only means that you’re not paying down the principal, the mechanism by which you reduce what you owe to the lender; Payment skipping means that any interest you would … Read more
Walter Updegrave’s “Ask the Expert” column on CNN Money has an article entitled Starting with an interest-only loan which is a response to a reader’s question about — you guessed it! — starting with an interest-only loan with the purchase of a house. The reader is writing from Baltimore, which is a hot area for … Read more
I promised some more discussion about Douglas Andrew’s Missed Fortune 101 — which is not really an investment book as much as it is a plug for lenders and insurance companies. In this post I’ll talk about some of the points he brings up against paying down your mortgage faster. The main idea of the … Read more
I heard about Douglas Andrew’s Missed Fortune 101 when somebody recommended it for the “Best Financial Book I’ve Ever Read” series on FreeMoneyFinance. (FMF is merely the messenger, so don’t shoot him! :)) It immediately drew criticism from other readers. I posted a comment after reading part of the book and reading the reviews on … Read more
MSN Money had an article entitled “Don’t pass up free money in a 401(k)” yesterday. A lot of companies offer 401(k) retirement savings plans, which allows you to invest pre-tax wages, subject to certain federal and corporate limits, for use in retirement. The interest and dividends are untaxed until they are withdrawn. Additionally, some companies … Read more
I’ve had a couple of recent posts about mortgage refinancing, and I promised some instruction on how to crunch your own numbers to see if it’s a good deal for you. Some lenders will be up-front with you and tell you that it’s not worth it to refinance; others will not. WARNING — LOTS OF … Read more