Purchasing Strategies

Mistakes of Homebuyers

Posted on October 8, 2014 by Melissa Hart

An increasing number of homebuyers are coming into the market. However, along with that trend, is an increasing number of financial regrets due to mistakes such as:

considering that renting may still be a viable financial choice in some situations; for example, if you may be moving due to a job or other circumstances.
with rising housing prices and higher mortgage rates, some buyers may not be competitive when bidding on a property.
other debts (such as a high car loan) may limit the monthly payment a person can afford.
putting too much faith in online property prices, which can give a false sense of true home values.
skipping the home inspection can result in not being aware of subtle home defects.
unrealistic expectations of the future appreciation of the home.

For additional information on mistakes made by homebuyers go to:

http://www.cnbc.com/id/101837611

Teaching Suggestions

Have students research suggestions for avoiding home buying mistakes.
Ask students create an in-class presentation with suggestions for avoiding home buying mistakes.

Discussion Questions

What actions might be taken to avoid these home buying mistakes?
Describe other difficult situations that a person might encounter in process of buying a home.

Categories: Chapter 7, Home Buying, Purchasing Strategies | Tags: Financial regrets, Home Buying, Home Buying Mistakes | Leave a comment

Brokerage Services Buying Guide

Posted on August 20, 2014 by Melissa Hart

“Whether you’re a seasoned investor, a newbie, or someone retesting the waters after a scary loss, financial services companies want your business.”

In this article, Consumer Reports evaluates a number of factors that investors should consider when choosing a brokerage firm to help them achieve their financial and investment goals. Brokerage firms were rated for customer satisfaction. (FYI, USAA was number 1 and Scottrade and Vanguard tied for second place.) In addition to customer satisfaction ratings, other factors discussed in this article include

The amount of professional advice and if there were costs or requirements for free advice.
A discussion of retirement plans offered by various brokerage firms.
Steps you should take when choosing a brokerage firm.
Questions you should ask when choosing a brokerage firm.
Sales tactics that raise a “red” flag when choosing a brokerage firm.

For more information go to http://www.consumerreports.org/cro/brokerage-services/buying-guide.htm

Teaching Suggestions

You may want to use the information in this blog post and the original article to

Point out to students that not all brokerage firms are the same and that the information in this article can help them choose the firm that can “best” help them obtain their investment goals.
Because this is a lengthy article, you may want to assign this as a homework assignment with students answering the questions below.

Discussion Questions

What types of advice were offered by different brokerage firms?
Did the information in the article help you understand the advantages and disadvantages of retirement plans?
What specific steps should you take before choosing an advisor or a brokerage firms.
What were some of the “red” flags you should watch for when choosing a brokerage firm?

Categories: Chapter_11, Chapter_12, Investments, Mutual Funds, Purchasing Strategies, Stocks | Tags: discount broker, full-service broker, online broker | Leave a comment

Average Tax Refund More than $3,000 So Far

Posted on April 6, 2014 by Melissa Hart

A month into the 2014 tax filing season, the IRS said the average tax refund is up 3 percent to $3,034.

This article also reports that more taxpayers are completing their own returns as opposed to using the services provided by tax professionals and filing their returns earlier this year when compared to 2013. Already, the IRS has received nearly 40 percent of expected total returns during the first month of the filing season.

Finally, recent surveys indicate most Americans plan to use their tax refund to pay down debt, for shopping, or for entertainment.

For additional information, go to http://www.usatoday.com/story/money/personalfinance/2014/03/06/irs-tax-refunds-returns/6125597/

Discussion Questions

1. Assume you just received a $3,000 tax refund. How would you use the money?

2. If you received a $3,000 refund this year, what effect would it have on your tax planning for next year?

Teaching Suggestions

You may want to use the information in this blog post and the original article to discuss

If students should use a tax refund to pay down debt, start an investment program, or spend the refund.
Time Value of Money examples to show how a refund that is saved or invested can increase in value.