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

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

     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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Written by J.P. Wicklein

     Recently, I received the following question from a Financial Fellow reader:  “At 32 years old, is it worth borrowing money ($3,000 - $5,000) from my credit card to max out my Roth IRA this calendar year if I know I could pay off the borrowed loan within 1 to 2 years time at a relatively reasonable low or fixed interest rate (say 7%)?” Great question! Here’s my answer:

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