Articles by Miranda Marquit

Are You Getting Reeled In By Deceptive Refinance Marketing?

I was reading my recent issue of Consumer Reports Money Adviser when I came across a small item on deceptive mortgage ads. I've seen a few of these myself recently. You've probably seen them as well. They appear online, on TV, in the newspaper, and even in direct mail to your home. I've lost count of the number of “FHA refinance” letters I've received in the mail in recent weeks.

It's important to be on guard when you see these ads, since they often promise something that is too good to be true. Some of the items you might notice in these ads include:

Really low fixed rates advertised.
Guaranteed approval.
Implication that the advertiser is affiliated in some way with FHA.

While it's true that there are some government programs out there to help you refinance your home, you need to be careful about answering these types of ads.

My Efforts to Refinance

I am going through a refinance under HARP. (Or at least trying to go through one. Income, as always, is a snag because mine and my husband's are both irregular.) I've been thinking about refinancing for a long time, but have hesitated because I'm not sure when we will move. When I talked to my banker, it was a rather discouraging experience, so I put it out of my mind for a while.

deceptive-refinance-practices I started thinking about it again when the direct mail ads started arriving — at a rate of three or four a week. I didn't seriously think of using any of them, though. A lot of the letters included very vague information and promises of fixed rates below 3%. Additionally, the FHA logo was prominent. Upon flipping over many of the letters, though, and reading the fine print, two things became apparent:

These aren't companies associated with the FHA: Even though the logo is prominent, the fine print on the back says that the company isn't associated with the FHA. However, the companies are using the fact that many who got home loans with the help of the FHA are eligible for government programs.
The rate isn't truly fixed: Again, I had to go to the fine print to see this. But the “fixed” rate was often a portion of a 5/1 ARM. So the rate is only fixed for a limited period of time during the term of the loan.

If you aren't watching carefully for these items, they might slip past you, causing you to feel that you are getting a great deal, and that you are protected because the FHA is involved.

My own refinance is being handled through a reputable, major company that I sort-of approached (with the help of Quizzle). Rather than answering an ad seen randomly on the Internet or sent to me via direct mail, I started the process mostly on my own.

Before you agree to a mortgage, make sure you read through the terms, and you understand the entire loan. And, if you are concerned that you are seeing deceptive mortgage ads, you can get more information from the FTC.

Would Seeing Your Future Self Encourage You to Save More?

By Miranda Marquit 5 Comments

One of the tools I played around with recently was the Face Retirement tool from Merrill Edge. The application lets you take a picture of yourself, and then it ages you. You see your potential look at age 47, and every decade after that until you are 107. The idea is that seeing the face of the future, you will be encouraged to save more (and use Merrill Edge to help you).

It was an interesting tool, and I had fun watching the horror that was my potential aging process. (Hint: Don't take the picture when you're sick, and you haven't changed out of your pajamas. It'll just depress you.) However, I'm not sure that just looking at the faces would encourage me to invest more in my retirement years.

Cost of Living Inflation Calculations

aging-face One of the more useful aspects of the tool is a look at inflation. Off to the side, you can see how much the cost of living is likely to rise by the time you reach a certain age (and begin to look like death warmed over). According to Face Retirement, by the time I hit the age 67 in 2047, the cost of living will rise by 222%. The tool also includes a look at what common consumer items will cost in different years. A loaf of bread is supposed to cost more than $7 in 2047, if the current trends hold.

Some of the other items listed, though, seem designed to scare the crap out of you:

Gallon of gas in 2087: $47.14
Wedding in 2067: $169,953
Plan ticket in 2057: $1,935
New car in 2037: $69,000

If nothing else, the tool can be used to give you the worst-case scenario involving the vagaries of inflation over the course of time. And, of course, you will realize that if you aren't careful, there's no way that you'll have enough to retire on and live comfortably. Unless you take your retirement planning up a notch right now.

Planning Ahead for Retirement

I think that the tool might have been even more effective if it was a little more interactive. Answer questions about what you are doing right now, and how it will affect your future. And then make changes to your face based on your possible habits in the future. The reality is that someone who lives comfortably, and has enough saved for retirement, is going to look better than someone who lives in poverty. Health habits, as well as the environment you live in, contribute to your future looks. If you could see how you could expect to look in 40 years with what you're setting aside now, as opposed to what you could look like if you put another $200 a month into your retirement account, that would be far more effective, I think.

What I learned from using Merrill's tool is that I probably need to do a little bit more. I should diversify my income a little more, and I could probably stand to add a little more to the retirement account each month. At the very least, the Face Retirement tool gets you thinking about the future, and reminds you that now is the time to start planning for what's next. If you don't boost your retirement now, you want have to avert your fate later.

Do You Have To Quit Your Job To Be Financially Successful?

By Miranda Marquit 7 Comments

One of the themes that seems to circulate is that in order to find true financial success, you have to start your own business with the idea of eventually quitting your day job.

While many of us like the idea of working from home (often in our pajamas), a home business isn't for everyone. Indeed, there are plenty of people who are just fine working for “the man” — and that's ok.

Do You Really Want to Quit Your Job?

Do You Have To Quit Your Job To Get Ahead? My husband teaches a couple of online courses for a local university each semester. The reality is that, if he wanted to, he could teach all online courses. He could work from home, and make decent money doing it. However, while he enjoys teaching the online classes, he doesn't actually want to work from home. My husband enjoys interacting with others, and he likes going in to work. He wouldn't be happy going in from 9-5, but he likes his four-day workweek, and the flexibility in his schedule.

I also know others who like more traditional work hours. They like going in for eight hours a day, and clocking out at night. They like that they can forget about their jobs while they are at home, and they don't have to worry about whether or not they have enough freelance clients to cover all the bills each month. Other perks that people like from their jobs include health benefits, paid time off, bonuses, and other advantages, like on-site fitness and daycare.

There's nothing wrong with enjoying your job, and there's nothing wrong with climbing the career ladder for 20 to 30 years until you retire. As long as you live within your means, and contribute to your retirement accounts, you can become financially successful, and still live the lifestyle you want. There's no rule that says you have to work toward quitting your job in favor of a home business.

What about a Side Hustle?

If you like your job, but want extra money, though, there are options. You can start a side hustle and earn money on the side. Plenty of people start side hustles as a way to fund vacations and other fun activities, as well as a way to pay down debt faster, or build up retirement savings. But starting a side hustle doesn't mean that you have to let it take over your life, or replace your day job.

Indeed, for some, the idea of turning a side hustle into a full-fledged business is repellant. After all, it's one thing to make a little money off a hobby you enjoy, doing it when you want, and taking the extra cash as it comes. It's quite another thing to be required to make money from your hobby. For some, turning a side hustle into a business means the death of a fun hobby. Is it really fun anymore when you have to force yourself to do it, and when it has to be profitable?

For many, a home business is a great thing. I love working from home, and I love the control and flexibility it usually gives me. But not everyone likes to work from home, and not everyone is happy running a business. Figure out what works for you, and work toward your financial success in a way that makes you happy.

Long-Term Investing: Don’t Forget The Basics

By Miranda Marquit 2 Comments

One of my favorite shows is Downton Abbey.

My husband (who has a knack for keeping our DVR stocked with BBC period dramas) and I watch faithfully.

Whenever something financial crops up — from Thomas' ill-advised get rich quick scheme to general income inequities — I get a little more excited.

And boy, the Series Three premiere dropped a great big money problem on the Crawley family. Lord Grantham has made a huge investing mistake. He put a great deal of money in one stock, a Canadian railroad company, and that company tanked. Goodbye to the principal, to say nothing of the potential gains that have evaporated.

Watching that episode of Downton reminded me that, when it comes to long-term investing, it's important not to forget the basics — no matter what someone “in the know” tells you about the next hot thing.

Basics of Long-Term Investing

As you consider where to invest your money, it's important to think about making a plan, and then sticking with it. Here are some of the basics to remember when it comes to long-term investing:

Diversity: The main thing was that Lord Grantham put way too many of his eggs in one basket. When you invest, you want to make sure that you have adequate diversity. This includes investing in different asset classes, as well as making sure that there is some diversity across sectors, industries, and geographies. Diversity is one way to hedge risk to your investment portfolio.
Value: Look for value investments. Long-term value often means that you need to pay attention to the fundamentals. It's not about what's hot, and what's going up in price right now. It's what offers a good value for your investing dollar. Look to something that has solid underlying fundamentals, and you'll be more likely to choose an investment with staying power.
Don't panic: Long-term investing requires big-picture thinking. If you want to be successful, you can't panic and unload everything at the first sign of trouble. Volatility tends to smooth out a bit over the long-term. If you have decent diversity, and if you have invested in value, your portfolio will likely make it out of the latest crisis mostly intact for the long-term.
Consistency: You probably don't have a huge chunk of capital to invest, like Lord Grantham does, but you can still build your assets over time. This requires a certain amount of planning, and it requires you to stick to your plan. Dollar-cost averaging can be a way for you to consistently invest over time. You can consider investments like DRIPs, index funds, and ETFs that make it easy to buy partial shares and get started with a small amount of money. Invest consistently, and you'll increase your chances of doing well over the long haul.

The basics of successful long-term investing are generally rather boring. However, in many cases, a good plan and an adherence to the basics can help you build your wealth over time. Consider your plan, and resolve to stick to the basics, and you might be surprised at how positive the result can be.

What’s Your Relationship With Money?

By Miranda Marquit 1 Comment

One of the things to consider with a new year is your relationship with money. We all have a relationship with money, and it's a good idea to pinpoint how you feel about money, and how you interact with money. Understanding your relationship with money can be a big help as you work to figure out how to create a spending plan for the coming year.

Are You In Control Of Your Money?

Ask yourself whether or not you are actually in control of your money. It seems obvious that money is an inanimate object and can't control you, but if you consider your situation again, it's possible to see how your money could be in charge of you.

Relationship With Money The easiest way to figure out whether your money is control of you is to look at what you have accomplished at the end of each month. Are you living paycheck to paycheck? Do you frequently have to pull out the credit card to make ends meet? If so, your money is probably in control of you. Rather than directing you financial resources, you are trying to keep up with your spending.

A new year is a good time to create a plan to take back control of your money. Think about how you are using your money to your advantage. Are you using your money as a means to an end? Think of your money as a tool, and you will be more likely to be in control. Look at your spending priorities, and consider what you might be spending money on that you don't actually need — or perhaps even want.

If you find yourself unhappy at the end of the month, wondering where all the money went, there is a good chance that your money is controlling you. Take back control by prioritizing your spending, and then dropping the unimportant items off your list.

How Do You Feel About Wealth?

Another consideration is how you feel about wealth. Think about how you feel about making money, and what you would do about wealth. There are a number of people who are frightened of making more money, due in large part to the possibility of lifestyle inflation, as well as concerns about what they would do with that extra money.

But your feelings about wealth aren't just about how you feel about making more money. Sometimes it has to do with your definition of wealth itself. For some people, “wealth” is having enough for their needs, and some of their wants, and being able to be financial free — while still having plenty of time to spend with their loved ones. Wealth isn't always just about making more money.

Think about how you define wealth, and then make a plan to live so that your values are in line with your spending. Really think about how you feel about money, and wealth, and what's next in your life. Working out your relationship with money can help you make better decisions in the long term and in the short term, and help you achieve the lifestyle you want.

Looking for a Boost to Help You Pay Down Debt? Join the Debt Movement!

By Miranda Marquit 1 Comment

One of the hardest things about getting out of debt is the fact that sometimes you feel as though you are all alone. After awhile, you begin to feel discouraged, and you suffer from the lack of support.

If you want to succeed with your debt pay down goals, you need support and help. And if you really want to kickstart your current efforts, a little enthusiasm helps. Jeff Rose, the blogger behind Good Financial Cents, is becoming quite well-known for his financial movements. And right now he is in the midst of the Debt Movement, an effort to get consumers to collectively pay down $10 million of debt in 90 days.

Join The Debt Movement

the-debt-movement You can join the Debt Movement at any time in the next 90 days, but the earlier you join, the more progress you will make. Jeff has teamed up with ReadyForZero, which can make it easier to order your debts, make a pay down plan, and track your progress. Joining the Debt Movement can connect you with hundreds of others working toward their goals of debt pay down, as well as provide you with the motivation you need to keep it going.

On top of gaining access to education and community resources, as well as helpful and practical tips, the Debt Movement is also offering scholarships. Some of those who participate will receive debt scholarships designed to help them turbo-charge their efforts. However, you can't get access to the scholarships if you don't sign up and participate. And, even if you don't end up with one of the scholarships, you are still likely to make notable progress during the time of the Debt Movement.

Build Wealth, Not Debt

The reality is that debt is a drain on your wealth. When you are paying interest to someone else, you are sending your own money out of your control. You aren't able to direct your financial resources in a way that results in more wealth for you. Debt can place strain your relationships as well as on your pocketbook. Getting out of debt is the first step toward financial freedom.

Think about your finances. Are you over-leveraged? Do you have too much debt? Do you wish that your money could go to improving your life, rather than just paying interest and other obligations? One of the best things you can do is make a plan that allows you to get rid of your debt as quickly as possible. Think about how much you can spare to set aside for debt reduction, and take the plunge.

Joining the Debt Movement can be a great way to boost your efforts. You'll find a supportive community that can help you stay focused on the goal. Plus, you can receive practical tips and strategies for paying down your debt faster so that you pay less in interest overall. Think about joining the Debt Movement and tracking your progress. You will have more of your own money at your disposal, and you will be well on your way to financial freedom.

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