Financial Fellow

Written by J.P. Wicklein

Several months ago I signed up as an investor with a peer-to-peer lending company, Lending Club. Presently I’m earning a net annualized return of 9.89%. This rate of return crushes anything I’m making through a traditional CD or online savings account. My rate of return is comparable to the historical returns offered by stocks - without the volatility.

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Written by J.P. Wicklein

Next week the federal government will launch their new Income Based Repayment (IBR) program. This program can be a godsend for those struggling to repay hefty education loans. Here’s a quick video that explains the new plan:

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                                  Written by J.P. Wicklein

     Last month I wrote an article about peer-to-peer lending in which borrowers apply for loans ranging from $1,000 to $25,000. The loans are made by individual investors, with Lending Club (the peer-to-peer lending company) acting as a middle man. Investors earn an average of 9% annually. Intrigued, I signed up as an investor last month. That wasn’t the first time I’d encountered peer-to-peer lending, though.

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Written by J.P. Wicklein

Chances are you’ve seen a TV advertisement offering a free copy of your credit report. Often, though, you’ll be required to purchase something (such as credit monitoring) to receive it for “free”. There’s only one way to receive a free copy of your credit report with no strings attached. Under the Fair Credit Reporting Act (FCRA) every consumer is entitled to receive a free copy of their credit report from each credit bureau (TransUnion, Experian, and Equifax) once a year.

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Written by J.P. Wicklein

     Buying a home will require you to make a myriad of decisions.  One of the most significant questions you’ll need to answer is whether to get a fixed rate mortgage or an adjustable rate mortgage (ARM). The answer to this question generally depends on two factors: 1) What’s the difference in interest rates between the ARM and the fixed rate? 2) How long do you plan to stay in the home you’ll be buying?

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Written by J.P. Wicklein

     Recently a friend of mine asked me whether he should take money out of his 401k account to use as a down payment on a home. There are two ways you can tap into your 401k for a down payment on a home: 1) Simply withdrawal the funds or 2) take a loan from your 401k. Should my friend take the money from his 401k? If so, which option should he choose?

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Written by J.P. Wicklein

     Lately, I’ve heard financial talking heads throwing around the “D” word…Depression.  It’s still too early to tell if we are officially in a depression. Without question, though, things are ugly and getting uglier each day. This week, five stories about the recession caught my attention:

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…………………Photo by: urban data………………………………  Written by J.P. Wicklein

…..Recently I wrote a post on my biggest financial blunders. In the article I discussed buying a home too soon, maintaining a credit card balance, having minimal short term savings, and battling a short stint with gambling. Those actions were far from the smartest things I’ve ever done. That said every coin has two sides. Here’s the other side – my biggest financial achievements:

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…………………..Photo by: pnwra……………………………………Written by J.P. Wicklein

…..I’ve heard more than one person say “You should buy as large a home as you can afford in order to get a bigger tax deduction and make the most money off appreciation”. This is terrible advice. If you choose to buy a larger (more expensive) home due to factors such as a good school district, location, the number of bedrooms, or other non-financial considerations that is understandable. However, buying a more expensive home for the bigger tax deduction and greater gains in appreciation, or to use the deduction and appreciation to justify non-financial considerations, is as foolish as it is farcical.

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   Written by J.P. Wicklein

     Recently I heard a suggestion about a unique way to payoff your mortgage early:  Instead of making larger mortgage payments each month, invest the money and use it to pay your mortgage off in one lump sum. On the surface this sounds like a good suggestion. When you make larger mortgage payments each month the extra money pays down your mortgage but, it doesn’t earn any interest. If you put the money in a money market, or some other investment, it could generate even more money that you could use to pay off your mortgage.

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