Entrepreneur Jim Marchese offers financial management tips for the onset of 2021.
SHREWSBURY, NJ / ACCESSWIRE / February 9, 2021 / What can the average person do to take advantage of historically low interest rates? Should individuals be concerned about the expected increase in taxes due to the change in administration? Are there legal, ethical measures one can take to save hard-earned cash from the IRS? Jim Marchese offers his input on these all-important topics to help individuals retain and grow their hard-earned wealth in the coming year.
As an experienced real estate expert, it's not surprising that Jim Marchese would advise buying a two family home for your first big purchase. "In many areas, the cost of a two-family home might be $100,000 more than a single-family home; however, you may be able to purchase the two-family home with only $25,000 down, and you'll be able to split the cost in half by renting out a portion of the home," Jim notes. Now is the time to invest in housing because interest rates are likely to rise starting next year. The Mortgage Bankers Association [MBA] reports that the interest rate for a 30-year mortgage loan in 2021 is currently 3%, but this could increase over a quarter percent every year starting in 2022. Simply put, a homeowner who borrowers $300,000 with a 3% interest rate will spend in interest a total of $155,000 over 30 years versus a 3.75% interest rate which will cost over $200,000 for the same 30 years.
A person who puts off the purchase for another year or two may pay 30% more equating to an additional $45,000 to buy the same home, at the same price if the MBA's prediction is correct. These figures do not take into account rising residential real estate values. Experts note that the cost of housing has increased more than four times the value of one's income since 1960; what's more, a housing shortage exacerbates existing problems when many are looking to move to rural areas to avoid COVID-19 lockdown restrictions in big cities. Furthermore, Jim Marchese has been advising his clients since mid-2020 to consider using low-interest rates to refinance a home in order to buy a second home to rent out or sell at a future date.
Jim Marchese also advises his readers to maximize 401K contributions. "Most people aren't taught how this works and don't understand they can make changes to their employer's plan in real-time. If you get an employer match, always maximize it. It will reduce your tax burden," Jim Marchese notes. Income contributed to a 401K account isn't taxable until one withdraws the money upon retirement. At this point, a person's income is typically far lower than when they held a full-time job. This means a 401K investment can withstand a tax raise while enabling a person to increase retirement income by making wise investments.
"The stock market goes up and down, but if you have a long-term perspective, the average dollar cost of your investment will pay off when the stock market goes up," Jim Marchese points out. A look at trends over the last ninety years makes it clear that Jim Marchese's assessment of the stock market is spot on. Short-term investors have certainly lost large sums of money as the stock market experienced crashes at various points in time, with the most recent impact hitting investors in early 2009. However, stocks have always risen again and are growing to new heights. It's hard to go wrong by saving taxable dollars as long as you are choosing conservative investments acquired through reputable companies who provide investment services.
Jim Marchese offers no further advice on avoiding potential tax changes under a Biden administration, but then again, many experts see no cause for concern. As Dan Wiener, the chairman of Adviser Investment Management, recently noted, proposed tax law changes would primarily affect hedge funds and high-end active traders. Even a capital gains tax wouldn't impact long-term investors or the stock market as a whole because most investors would wait for a future administration to lower the capital gains tax rate or even abolish the tax altogether. Furthermore, experts don't expect the Democrat administration to make tax law changes in 2021, as other priorities would take center stage this year.
Jim Marchese has a long-term track record for making accurate, profitable financial decisions. His decades-long experience in the real estate market, coupled with extensive experience with investing in the stock market, has enabled him to offer sound financial counsel to readers of all ages and walks of life. It's essential to carefully consider any investment advice and adapt it to one's situation, needs, and budget. Even so, a person who wants to turn a significant long-term profit would do well to at least consider Jim Marchese's expert opinion to see how it can be leveraged to increase income without raising one's tax rate.
If you're from New Jersey, Pennsylvania, California or Maryland and would like a rate quote for purchase, investment property or refinance go to https://www.mtgnow.com/. Free free to apply online https://mtgnow.com/apply/. and ask for Jim for a personal consultation.
Mortgage Now, INC
SOURCE: Jim and Amber Marchese