Money Matter$

With interest rates at historic lows, there seems to be a pretty simple answer. Yes! …Probably. There as an old rule of thumb that said if you can reduce your interest rate by 1.5%, it is worth refinancing. Loan officers often tell you about the “monthly cash flow savings” from refinancing, calculating that if you’ll save $200/month off your current payment and their fee is $2,400, that you get your “money back” in only 12 months. However, what they sometimes fail to mention is the fact that you’ve often extended the length of your loan to get that cash flow savings. The only savings that really matter is the interest savings you'll reap over the life of the loan.

The rules of a 1031-exchange are fairly straight-forward, but the execution is anything but. You need to have a 1031-exchange company on-board, as well as your tax-preparer.

We have a lot of clients that own real estate investments as another way to provide investment income and grow their net worth. I can appreciate the tax advantages and diversification of owning investment property; in fact, my wife and I have acquired a few income properties over the past ten years.

Did you know that you can buy the house next door as a rental with money in your IRA? Well, you can’t—but your IRA can. Your IRA is basically it’s own entity, and has nearly limitless ability to invest in all kinds of odd-ball—or hair-brained—investment ideas. There is a small list of “prohibited transactions”.