When I started saving for retirement, I wasn't sure how much money I should save, so I set my first milestone at one million dollars. I'm not there yet, but I'm working on it. Of course, the more I save, the more I earn in interest. But how much interest does one million dollars earn per year?Well, that all depends on your interest rate. If you can match the average annual inflation rate, which is around 3%, you can earn around $31,400, … [Read more...]
Interest Rates Changing – What Does It Mean?
If you've been following the news, you will have read that the Federal Reserve raised the key interest rates from a range of 0%-0.25% to a range of 0.25%-0.5%.In general, this is good news. It means that we're finally seeing true recovery from the economic crisis that started in 2007. While the Fed has indicated that they will proceed slowly, this is likely the first in a series of rate hikes. The last time the rate was raised was in … [Read more...]
Rising Interest Rates?
Last week, I was listening to news radio on the way to work (side note - when did I become the person who listens to the news rather than a fun morning show?). They were discussing interest rates and a recent comment from Federal Reserve Chair Janet Yellen that interest rates could start to rise in the US in 2015. It’s a good sign - it means that the Fed seems to think our economy is improving. If the Fed raises rates, that will make all other … [Read more...]
Buried in Paperwork and Repairs
I just finished filling out 54 pages of refinancing paperwork for my shiny new mortgage. I'm excited to be getting a lower interest rate, but it does smart a bit to suddenly be back to 30 years instead of 28.5 years. Of course, even though I'm not paying extra on the mortgage now, the plan is to pay extra on the mortgage as my income (hopefully) increases, so it won't actually be a full 30 years anyway.It will be nice to have the extra cash … [Read more...]
Mortgage Refinancing
I'm in the process of refinancing my mortgage. My current rate is at 4.875%, and I've managed to lock in at a 3.5% rate. I should have tried to refinance sooner before rates started to rise again. But either way, that kind of drop isn't bad. I'll break even in around 15 months, maybe less, depending on what the final closing costs will be.I'm hoping this is a less painful process than getting the mortgage in the first place. So far, it … [Read more...]