How Much Should You Save Every Month?

How Much Should You Save Every Month?

Millenials get a bad rap on a regular basis, and I’m definitely happy to be a defender of my generation in a few ways. Without slinging mud about our cohorts financial future I find it vital to talk about the very real metrics that we face in terms of federal entitlements being less reliable, and with the cost of living continually on the rise. Millenials, life hard to plan when your adjusted wages and cost of living squeeze you, and your probable student debt is so unreasonably burdensome. I would love to sit down and hash out all sorts of thoughts that I hold on these issues, but the fact is that you have to figure out a way to plan ahead. Saving money is not always easy, but this article below has a great narrative for opening your mind to what it could look like.

I personally plan to save a lot of my money to by investment properties, in part because that is what I know, but also because of the rate of return in the right investments (you are literally letting other people buy you a house…). All of that sade, this post is no sales pitch, it is a call to action for those who can relate to my own experience, and will experience the same future as me one way or another. So please enjoy this article, and feel free to share or comment, I’d honestly love to discuss it further.

-Grady

 

How Much Should You Save Every Month?

More than income or investment returns, your personal saving rate is the biggest factor in building financial security. But how much should you save? $50 per month? 50 percent of your paycheck? Nothing until you’re out of debt or can start earning more money?

How much should you save every month?

Many sources recommend saving 20 percent of your income every month.

According to the popular 50/30/20 rule, you should reserve 50 percent of your budget for essentials like rent and food, 30 percent for discretionary spending, and at least 20 percent for savings. (Credit for the 50/30/20 rule goes to Senator Elizabeth Warren, who reportedly used to teach it when she was a bankruptcy professor.)

We agree with the recommendation to save 20 percent of your monthly income. But it’s not always that simple to suggest the right percentage of income for YOU to save.

If, for example, you’re a high earner, you’d be wise to keep your expenses low and save a much larger percentage of your income.

On the other hand, if saving 20 percent of your income seems implausible, or even impossible at the moment, we don’t want you to get frustrated. Saving something is better than nothing.

But if you want a shot at being secure through old age—and having some extra cash for things you want—the numbers suggest that 20 percent is the number you’ll want to reach or exceed.

Where should you save?

Opening an online savings account is a great way to start saving.  You’ll find some of the best rates online (vs. brick and mortar) and accessing your funds can be done from anywhere in the world.  Our favorite online bank is CIT, which has launched a Savings Builder Account with an APY of 2.45%.

In order to qualify for the 2.45% APY, you must either make a deposit of $100 per month (initial deposit to open is $100 as well) or have an ongoing daily balance of $25,000 or more.  CIT is trying to promote savings health, which is why to receive the very high APY, you must be willing to commit to saving money every month.

Ready to start saving? Compare today’s top saving account rates and open one today!

Why 20 percent?

According to our analysis, assuming you’re in your 20s or 30s and can earn an average investment return of five percent a year, you’ll need to save about 20 percent of your income to have a shot at achieving financial independence before you’re too old to enjoy it.

Here’s the thing: If you want to work like a dog every day until you die, maybe you don’t need to save all that much. Sure, you’ll still want an occasional vacation and something in an emergency fund in case your car coughs up a radiator.

Beyond that, however, we save so that one day we no longer have to work for the money. For most of us, that day won’t come for many decades, but there are regular working people who reach it as young as 40 or even 35.

What are you saving for?

True financial independence means that you can sustain your chosen lifestyle entirely from your investments’ interest and dividends.

How much money do you need to save to do that?

Good question. The simple answer: It all depends. It depends on whether you’re willing to live at the poverty line, need two homes and a sailboat, or fall somewhere in between. It also depends on how well your investments perform. If you can earn an average annual return of seven percent on your money, you can stop working with a lot less than if you only earn three percent.

For simplicity’s sake, we’ll use the common “four percent rule,” which states that, theoretically, you could withdraw four percent of your principal balance every year and live on this indefinitely. That means that you’ll need to save 25 times your annual expenses to become financially independent. (If the math doesn’t shake out for you, remember 25 x 4 is 100, and 100 percent = your total balance.)

There are problems with the four percent rule, of course. For one, there are no risk-free investments that yield anywhere close to four percent today. Sudden inflation could also become a problem. To account for this, and for simplicity’s sake, we’ll base how much you need to save based on your gross (before tax) income not your expenses.

In our example, we assume that you want to save 25 times your annual income, rather than your annual expenses. By default, you’ll actually be saving more than you need (because once you’re financially independent you could stop saving). But when discussing your source of income for the rest of your life, it’s best to be conservative.

How long will it take?

The chart below shows how long it will take you to amass 25 times your income based upon the percentage of your income you save. (We assume a five percent average annual return to account for a more aggressive asset allocation while you’re saving.)

How Much Should You Be Saving?

Percentage of Income Saved Time Required To Save 25x Annual Income
1 percent 100 years
2 percent 86 years
5 percent 67 years
10 percent 54 years
15 percent 46 years
20 percent 41 years
25 percent 37 years
50 percent 26 years
75 percent 21 years
90 percent 19 years

As you can see, by saving 20 percent of your income you’ll hit 25 times your annual income in just over 40 years. That means a 30-year-old who starts saving today (assuming no prior savings) will hit this target by 71. If you save less than 20 percent, it will simply take too long for your money to grow to a point where it will allow you to live off just interest.

It’s not that scary, we promise!

Remember that you only need 25 times your annual expenses, not your income, to become financially independent. The lower you keep your expenses, the sooner you’ll achieve your personal savings goal. Also, our savings chart doesn’t take taxes into account.

Tax-advantaged accounts can help

For simplicity, our chart looks at before-tax money going in, assuming that you’ll pay taxes on the money coming out. But tax-sheltered retirement accounts like 401(k)s and IRAs change that equation for the better.

If you take advantage of these accounts, you can get away with saving 20 percent of your net, or after tax, income.

If you qualify for a Roth IRA, use it! Money you contribute to a Roth IRA now comes back to you tax-free when you’re older, so the more you save in a Roth, the less you’ll need to save in total because you won’t have to pay taxes on the Roth withdrawals in retirement.

Contributions to a 401(k) will also help ease the pain of reaching a 20 percent savings rate, according to a TIAA-CREF blog focused on millennials.

TIAA-CREF assumes you can take advantage of at least a 5 percent match from your employer when you put money into a 401(k). This means you’ll really only need to save 15 percent of your paycheck.

Plus, if you are putting money into a 401(k), this money will be deducted from your paycheck before taxes which means that each dollar you deduct will save you some after-tax cash.

Getting to 20 percent—an example

Let’s say you make $1,200 every two weeks. After taxes, it’s $1,000. Your savings goal should be 20 percent of net (after-tax) income, or $200 from every paycheck.

If you make a pretax contribution to a 401(k) of five percent of your paycheck and it’s matched by your employer, that means you put aside $60 from your check before taxes (and your employer kicks in another $60). That’s $120 into your retirement account every month, and your after-tax paycheck is only reduced to $969.

You still owe yourself $80. You could put half into a Roth IRA for additional retirement savings and the other half to build up an emergency fund. What you do with it doesn’t matter as much as the fact that you saved it at all.

This means, after all that saving, your take-home income is still $889 every two weeks, which is only about 11 percent less than your previous paycheck of $1,000. By taking advantage of your employer match and pre-tax deductions, you managed to almost double your savings rate. Talk about bang for your buck!

Between pretax savings and employer matching, saving 20 percent of your paycheck gets a bit easier.

What if I just can’t save that much?

Don’t stress. Saving something is better than nothing.

I can already hear the shouts from the comments: “How ridiculous! I spend almost everything I earn, and on rent, food, and transport! This website is out of touch with its audience!”

Okay, okay. If the 20 percent scenario I just sketched out doesn’t fit your situation (which is going to be unique to you), then please don’t think that I’m saying you’re a failure or a chump. Like I said, we believe everyone should aim for 20 percent, not that everyone should hit that target on their first try.

Start small. Start with 1 percent. When that doesn’t sting so bad, go up to two, or even three. Maybe you hit 5 percent, and that feels pretty good. Maybe you take a crazy leap for 10 percent, and that leaves you stressed and strapped, so you scale back. It’s a process, a literal give and take.

Through it all, keep that 20 percent goal in mind. It’ll keep you from getting complacent. Whenever you get a raise, raise your saving rate! You were doing fine without that money before, and you shouldn’t miss it if you never get used to having it.

Finally, if you’re in debt, you might already be saving more than you think. That’s because paying down debt is essentially saving in reverse.

Think of it this way: One day, you’re debt-free. But you’ve been making big monthly payments to your debts for years. If you suddenly begin to save that money, what would your saving rate be?

Also, try investing

If you can’t save a good chunk of your paycheck every month, investing once (for right now) can help you start saving over the long run.

To get your started, our favorite investing platform is Betterment.

Betterment claims they’re the “simplest, smartest way to invest,” and we agree that they are. With Betterment your money will be automatically invested in index funds. But first, Betterment will ask you a series of questions to help determine your goals and risk tolerance.

You’re probably wondering: How much do I have to pay for all this? Actually, not as much as you might think. Betterment’s fee is simple—0.25 percent of your total portfolio. Compared to traditional brokerage firms, this is a whole lot less.

To get a better understanding of all that Betterment has to offer, here’s our full review.

I hit 20 percent—what’s next?

Keep going! As long as you’re not depriving yourself today, it’s difficult to save “too much”.

Take the same advice we gave to those who are struggling to hit 20 percent: Test your limits, and try to increase them. Building up strength (either physical or financial) takes discipline and consistency, as well as a willingness to listen to your body (or your bank account) when it tells you your current regimen is just too intense.

But saving more is definitely a good idea. Retirement experts say that the traditional recommendation of 15 percent of income is honestly too low to guarantee a comfortable retirement, and that 25 or 30 percent is a safer bet.

Also, keep in mind that if your goal is to retire early or someday leave a well-paying but high-stress job, your savings rate will likely need to be 50 percent or more. This may seem impossible, but it might give you pause when making major financial decisions like deciding how much house you can afford or what kind of car to buy.

The most important thing is to start saving. How much will vary from person to person, as well as from year to year. The best savings philosophy, in keeping with our sports metaphors, comes from Nike: Just do it.

400 Years of American Houses, Visualized

400 Years of American Houses, Visualized

I just saw this little ad pop up for this poster about all of the different styles of houses over different eras in American history, and I’m buying it to hang up in my new office space. I just thought that there would likely be a few of you out there who would enjoy it and want to buy one for yourself too.

Grady

 

400 Years of American Houses, Visualized

Sweet home, homie.

From post-Medieval English to McMansions, domestic architecture in the United States is as diverse as its denizens. A new poster from Pop Chart Lab makes identifying them easier and offers a glimpse of over 300 years of design history in a single, beautifully illustrated graphic.

The Brooklyn-based poster company, founded by Ben Gibson and Patrick Mulligan, has earned its cred by sleuthing often overlooked information and presenting it in a beautiful way. (Co.Design detailed Pop Chart Labs’s formula for success here.) The company has tackled compendiums of basketball jerseysApple’s history, and beer, among others. There’s an insatiable thirst for infographics—someone should do a poster about that!—and Pop Chart Lab has carved itself a nice little niche.

“After the success of our two prints celebrating the architectural achievements of iconic structures around the world—The Schematic of Structure and The Splendid Structures of New York—we decided to examine the elegance of the home,” the team at Pop Chart Lab said via email.

The designers embarked on a comprehensive research project to discover the changing traits of houses—how the rooflines morphed through the decades, how architects mined the past for new styles, and how the houses we come to know today evolved from a complex lineage. Because there was an information surplus—far too much to fit into one poster—they honed in on single-family residential architecture in the United States from 1600 to today. Virginia Savage McAlester’s Field Guide to American Houses was the main reference.

Those with a knack for history might recognize the iconic Vanna Venturi house as a representative for postmodern design, Frank Lloyd Wright’s Fallingwater for Organic, and the Gehry Residence for Deconstructivism. And those with a razor-sharp memory might be able to ID the houses they lived in. (I grew up in a spot that’s a dead ringer for the Spanish-style ranch that’s illustrated.) Pop Chart Labs hops the poster fosters “a general appreciation and respect for American design evolution for the home over the past 400 years” and that viewers will “learn more about an interesting topic that we see in everyday life.”

Now go find out what style your house represents and purchase the poster for $29 from popchartlab.com.

7 Easy Ways to Pay Off Your Mortgage Early – From Dave Ramsey

7 Easy Ways to Pay Off Your Mortgage Early – From Dave Ramsey

Want To Get Ahead In Life?...

One of the biggest drivers for me pursuing a career in real estate has been the idea that I could help people map out how to stop paying rent, and how to buy financially smart properties. While Dave Ramsey rubs me the wrong way on a personal level sometimes (I’m sure we’d get along pretty well) I think he’s helped an enormous number of people change their lives, and the lives of their families for generations. So whether you are thinking about buying a house, or you just want to pay down the house that you already own there is no better day to start planning than today.

Grady

7 Easy Ways to Pay Off Your Mortgage Early

According to the Urban Institute, more than 26.9 million Americans own their home outright.(1) Some bought their homes with cash, while others whittled away at their mortgages year after year until they were gone.

Maybe you worked with a great real estate agent and got a deal on your home, but—like two-thirds of American homeowners—you had to take out a mortgage to finance the purchase.(2) You can join the ranks of debt-free homeowners and make your last mortgage payment sooner rather than later with these seven easy ways to pay off your mortgage early!

Can I Pay Off My Mortgage Early?

Each time you pay extra on your mortgage, more of each payment after that is applied to your principal balance. But, before you start making extra payments, let’s go over the ground rules.

  • Check with your mortgage company first. Some companies only accept extra payments at specific times or may charge prepayment penalties.
  • Include a note on your extra payment that you want it applied to the principal balance—not to the following month’s payment.
  • Don’t shell out your hard-earned cash for a fancy-schmancy mortgage accelerator program. You can accomplish the same goal all by yourself. High-five!

If you want to get serious about paying off your mortgage quickly, check out our mortgage payoff calculator. It will help you estimate how quickly you can pay off your home.

Biweekly Mortgage Payments

The concept of a biweekly mortgage payment is pretty simple. You make half of your mortgage payment every two weeks. That results in 26 half-payments, which equals 13 full monthly payments each year.

That extra payment can knock eight years off a 30-year mortgage, depending on the loan’s interest rate.

How to Set Up a Biweekly Mortgage Payment

  • Locate the principal and interest portion of your payment on your monthly statement and simply divide that number by two. For example, if the principal and interest portion of your payment is $1,500, your new biweekly mortgage payment is $750.
  • Don’t forget to include the tax and insurance portion of your payment each month. In this $1,500 payment example, the $750 biweekly payment only covers principal and interest. You’ll have to pay the tax and insurance portion of your payment in addition to that.
  • Find out how or if your mortgage company handles biweekly mortgage payments. Some lenders will process biweekly payments while others refuse to accept partial payments at all. In any case, do not pay a fee to initiate a biweekly mortgage plan.
  • If your lender isn’t open to biweekly payments, open a new bank account exclusively for your mortgage payment. Deposit your half-payment every two weeks and use that money to make your full mortgage payment (either by check or automatic payment) on every second deposit.
  • A biweekly payment is not a substitute for gazelle intensity. Once you reach Baby Step 5, start putting as much money as you can toward the mortgage to pay it off even faster.

How to Pay Off Your Mortgage Early

Every dollar you add to your regular payment each month puts a bigger dent in your principal balance—and you don’t have to double-down to make a difference. Adding just one extra payment each year knocks years off your mortgage!

Here are some other options for paying extra on your mortgage and how those extra payments affect, as an example, a $220,000, 30-year mortgage with a 4% interest rate:

1. Make an Extra House Payment Each Quarter

You’ll pay your mortgage off 11 years early, and you’ll save more than $65,000 in interest.

2. Bring your Lunch into Work

Toting a brown bag to work every day won’t win you any fashion contests. But trading lunch out for eating in can make you a lean-and-mean, mortgage-free machine three years ahead of schedule. Applying your $100 a month in lunch money to your mortgage will also save you more than $28,000 in interest.

Other small sacrifices can go a long way to help pay off your mortgage early. Put Andrew Jackson to work for you by adding just $20 to your mortgage payment each month. Based on our example mortgage numbers above, you’ll pay your mortgage off a year early, saving over $7,000 in the process.

How much could you save if you took your Starbucks money and added it to your mortgage payment each month? According to the Acorns Money Matters Report, the average American spends $3 per day on their coffee.(3) That’s around $90 a month added to your mortgage payments—which will save you $25,000 in interest and four years on the life of your loan!

3. Refinance—Or Pretend You Did

The only type of debt Dave won’t yell at you about is a 15-year fixed-rate mortgage with a payment that’s no more than 25% of your take-home pay. You’ll pay much more in interest on a 30-year mortgage—and, besides, who wants to be in debt for 30 years?

You can refinance a longer-term mortgage into a 15-year loan. Or, if you already have a low interest rate, save on the closing costs of a refinance and simply pay on your 30-year mortgage like it’s a 15-year mortgage. The same goes for a 15-year mortgage. If you can swing it, why not increase your payments to pay it off in 10 years?

If you have questions about refinancing or need help with a mortgage, we recommend you contact Churchill Mortgage.

4. Downsize

Downsizing your house could be a drastic step, but if you’re set on getting rid of your mortgage, consider selling your larger home and using the profits to buy a smaller, less expensive home.

With the profits from selling your bigger house, you may be able to completely pay cash for your new home. But even if you have to get a small mortgage, you’ve succeeded in reducing your debt. Now your goal is to get rid of that debt as quickly as possible. The smaller the balance, the quicker you can make it happen.

We all know hindsight is 20/20, but if you take advantage of the following tipsbefore you purchase your next home, you will be in a great position to pay that mortgage off early.

5. Don’t Bite Off More Than You Can Chew

Before you search for homes or find a real estate agent, it’s important to ensure you’re financially ready and can actually afford the house you want to buy. This handy checklist is a great place to start. If you can’t say yes to all six questions, it’s best to put your home purchase on hold.

  • Am I debt-free with three to six months of expenses in an emergency fund?
  • Can I make at least a 10% (preferably a 20%) down payment?
  • Do I have enough cash to cover closing costs and moving expenses?
  • Is the house payment 25% or less of my monthly take-home pay?
  • Can I afford to take out a 15-year fixed-rate loan?
  • Can I afford ongoing maintenance and utilities for this home?
  • If you need help figuring out how much house you can afford, our free mortgage calculator is a great place to get more information and see how much your maximum payment should be.

6. Consult a Pro to Find the Right Home

If you’re looking to buy a home that fits your budget, or if you’re ready to sell your home, consult an experienced real estate agent whose advice will save you time and money.

A buyer’s agent can help you navigate through the home-buying process. In some cases, they may even be able to help you find a house before it hits the market, giving you a competitive edge. And when it comes to making an offer, your agent will negotiate on your behalf—so that you don’t pay a penny more than you have to.

You can find a trustworthy real estate professional in your area through Dave’s nationwide Endorsed Local Provider (ELP) network. Our ELPs understand how important it is to you to buy a home you can afford, so you can trust that your ELP won’t pressure you to consider homes that would bust your budget. Contact your agent today!

7. Maximize Your Down Payment

The best way to buy a home is with 100% down. Paying cash for a home may sound weird, but imagine all the fun you could have without a mortgage payment weighing you down!

If you can’t postpone the purchase until you can pay cash, plan to put at least 10% down at the closing table. Of course, 20% is even better because then you’ll avoid paying private mortgage insurance (PMI). PMI typically costs between 0.5% and 1% of the loan amount annually. For example, on a $250,000 mortgage, PMI will cost you $1,250 to $2,500 a year.(4) Why give the bank extra money each month if it doesn’t pay your mortgage down faster?

Keep in mind that the more cash you put down on the front end, the less money you’ll need to finance. That adds up to a lower mortgage payment each month, making it easier to pay off your mortgage early.

Related: Want to learn more about how to save up a down payment on a house—and fast? Our 5-Day Home Buyer Savings Plan will help you discover simple tricks to save a five-figure down payment by this time next year.

Chris Hogan is the #1 national best-selling author of Retire Inspired: It’s Not an Age. It’s a Financial Number and host of the Retire Inspired Podcast. A popular and dynamic speaker on the topics of personal finance, retirement and leadership, Hogan helps people across the country develop successful strategies to manage their money in both their personal lives and businesses. You can follow Hogan on Twitter and Instagram at @ChrisHogan360 and online at chrishogan360.com or facebook.com/chrishogan360.

The Sting of Higher Rates – Steve Rattner

The Sting of Higher Rates – Steve Rattner

I fear that this might initially seem like a topic that is not interesting enough to hold many people’s ever shrinking attention spans, but there are a few principles that can be helpful for someone who is thinking about buying real estate with a loan related to the coming rise in interest rates. When the Federal Reserve keeps rates low (as they have for the last decade, to spur on economic growth/recovery) people tend to borrow more money, because it’s cheaper to borrow. Since people are able to borrow more they often find that prices rise faster because there are more people with more money burning a hole in their pocket. If you’ve been tracking real estate you will have surely noticed in most markets that prices have risen quite a bit over the last decade. And with people moving back into urban centers those prices have jumped more – while some rural markets have lagged behind.

So, maybe you are thinking about buying something sometime soon and you’re possibly afraid of overpaying, and/or having a rate that is higher than you want it to be? The historic average in recent decades on a mortgage interest rate is about 7%. So rates going over 5% is still relatively low. However, people are borrowing more money for homes that are larger (although that is trending down, particularly in urban areas), so people are still needing to figure out the balance of their own personal priorities. Coming up with a game plan can be somewhat complicated, but certain aspects of the search don’t have to be. Don’t be afraid to tell someone that you don’t know something, and ask for advice. Call your Realtor, and your lender to see what your options are if you think you might want to buy property. Making a plan is really in your best interest. This article might sound doom and gloom, but it doesn’t have to be entirely. Rates will rise, and things will change – so make a plan. Now go find a way to enjoy this day, and I hope you enjoy this article.

-Grady

The Sting of Higher Rates – Steve Rattner

On MSNBC’s Morning Joe today, Steven Rattner discussed the implications of rising interest rates on would-be homeowners, the stock market, and federal borrowing. Interest rates are on the rise, causing pain for Americans seeking mortgages and contributing significantly to the recent swoon in the stock market. Over the past year, the average rate on new 30 year mortgages has risen by a full percentage point, from just over 4% to just over 5%. That puts the cost of a new mortgage at the highest rate since early 2011. The increase has been largely driven by a similar rise in rates on US Treasuries. As a result, the housing market has already begun to soften. Existing home sales have fallen 6.6% from November 2017 and the sales of new homes have fallen even faster, by 11.6%. New housing starts and homebuilder sentiment has similarly declined. Interest rates normally rise later in the recovery cycle but the recent increase has been unusually fast and is due, at least in part, to rising federal borrowing. In the past 12 months, the government borrowed just over $1 trillion of new funds, almost exactly double what it borrowed in the preceding 12 months. And that high level is projected to remain indefinitely. On top of that, the average interest rate that the government pays has risen substantially, from just over 2% during the previous several years to almost 2.4% at present. As a result of these two factors, the government’s interest costs have begun to rise and are projected to increase more steeply. While the government deficit has been rising, its interest expense has remained relatively stable (until now) because rates were low. But now, interest expense will become a bigger cost for the government than Medicaid in 2020 and by 2023, interest expense is projected to be higher than the entire cost of our military budget. (Fun fact: our federal interest expense is now larger than the entire GDP of Belgium.)

Steve Rattner is the Chairman and CEO of Willett Advisors LLC, which invests former New York Mayor Michael Bloomberg’s personal and philanthropic assets. He is the Economic Analyst for MSNBC’s Morning Joe and is a Contributing Writer for the Op-Ed page of The New York Times.

Metro Brokers of OK Sold the Most Real Estate in Norman in 2017 | Norman Transcript

Metro Brokers of OK Sold the Most Real Estate in Norman in 2017 | Norman Transcript

When I was growing up I was one of those kids whose aptitude run parallel to my grades in the classroom. I was clearly the best in my class at math for many years, but I was also in a class for kids who weren’t great at reading – which I found humiliating/confusing. I couldn’t figure out if I was a smart kid or a dumb kid. I just wanted clarity actually, because not knowing which one I was constantly plagued my identity. I finally got out of the reading class in 3rd grade, but I still questioned my intelligence. I did however find that whenever I had a teacher who gave me more space to learn how I needed to I felt enormously more capable and, I would regularly lead in class rather than distract. Even when I did testing in college for ADD they found that I had a high level of intelligence, but I had trouble functioning within the established structures of a classroom. They found that I struggled in class not because I had ADD, but because I was anxious due to not functioning well in the established/traditional way that I was “supposed to”.

Fast forward about 20 years and I am still that same little kid. I know my limits and capacities better than I did 20 years ago, but I’m still challenged daily by not feeling like I fit in a simple box. Luckily I found a company 4 years ago that gave me exactly what I needed: flexibility, and a big green light! People doubted that changing some of the traditional paradigms in real estate would work, but I’m very proud to be a part of my company. I don’t want to take away from any other company (I’m so proud of the community that our industry has), but there is a reason why our company has grown faster than any other company, and sold more houses in Norman than any other company the last few years. Go team! Below is an article from the Norman Transcript about our success do to challenging norms. Thank you to the 7 founders of the company who took a big risk, it paid off.

Grady

Not Your Average Real Estate Broker | Norman Transcript

Metro Brokers of Oklahoma was founded a decade ago by a group of realtors who wanted to bring a different set of values to real estate.

Apparently, their vision to combine broker autonomy with high ethical standards has paid off. According to a ranking report of 2017 calendar year numbers, Metro Brokers was the leading agency for total transactions in Norman.

With 14.33 percent of the Norman market share, 247 listings, 294.5 sales and a total of 541.5 total transactions, they are ahead of the leading and more traditional Norman real estate companies.

“We opened Aug. 1, 2007, so we’re going into our eleventh year,” said Gwen Arveson, owner and principal broker. “We have offices all over the metro with 189 agents and 35 branch offices.”

Arveson and Betty Goss, owner-manager and branch broker, believe the supportive yet independent culture of their workplace is at least partially responsible for their success.

“We are not a traditional real estate company,” Goss said. “We believe in allowing our associates to run their own business with integrity, and we support them. We don’t have production requirements.”

In 2017, Metro Brokers of Oklahoma ranked fourth in the Oklahoma City metro for total transactions, but that’s not a market Arveson, Goss or their fellow co-owners had planned to enter initially.

Goss and Arveson were friends with each other and the other Metro Brokers owners when they decided to form the company.

“We were all selling real estate, and we decided we wanted to structure a company that was different than any company in Norman,” Arveson said. “We did that all the way from writing our vision statement to writing our culture statement of the type of people we wanted to attract.”

The business started in Norman and organically spread to the metro.

“We were not prepared to do the branch office thing,” Arveson said. “There were just seven of us who wanted to sell real estate. We have never recruited anyone. People came to us. Another thing that makes us different from other real estate companies is that we allow our branches to work with total autonomy within the law.”

Goss is a long-time Norman resident who got into real estate so she could avoid an office job.

“My best friend said I was good with people and should try real estate, and I did and I love it,” she said.

Arveson and Goss say Metro Brokers nurtures self-motivated realtors rather than promoting competition. The company doesn’t recognize the top producer of the month, but it does provide support through office facilities, insurance coverage, a website, brand awareness, training and collaboration among members who are more willing to help because they’re not in competition.

“We do interviews,” said Arveson. “Before anyone can join us, they have to come to a 30 minute interview that two of the owners conduct.”

The focus of those interviews includes ethics and values.

“When we’re interviewing, we listen to their background story,” Goss said. “We listen to keywords to how they handle their previous work. Above all, we look for integrity with how they are going to treat their counterparts, owners and the public with respect to how they do business.”

Metro Brokers does not charge extra fees to brokers — there are no desk fees, technology fees or franchise fees, and the annual membership fee never increases, it is locked in for life.

“The company was started by all Oklahoma people, and we are not a franchise so the money stays in Oklahoma,” Arveson said. “We offer full service real estate. We allow the branch offices to fully run their offices however they want. We don’t interfere with their finances.”

Arveson started in real estate in 1986. Working with like-minded realtors to create a business comprised of a “professional but non-restrictive membership group” to support each other in running a “fair and profitable real estate business,” was the culmination of a dream come true and the fruition of the values she and the other owners hold dear.

“We start every meeting with prayer,” Arveson said. “All of the owners are Christians. That doesn’t mean you have to be a Christian to work here, it just means you have to respect what we do.”

Brokers determine their own goals, commission fees, income and expenses.

“We teach them to compete with themselves,” Arveson said. “We want them to work together rather than being competitive. The real estate business is already competitive enough.”

That approach is paying off in more than just sales numbers.

“We have more associates than anyone in Norman,” Goss said. “People who do business with us are pleased with our reputation as experienced realtors who do the right thing.”

Source: Not your average real estate broker | Local News | normantranscript.com

Tax Tips For Homeowners That Could Help Reduce Tax Bills

Tax Tips For Homeowners That Could Help Reduce Tax Bills

Taxes… There are but a few exercises that help people recall their anger and anxieties better than thinking about their taxes. I personally am a believer in a civil society, and I don’t find it helpful for anyone to complain so much about paying taxes. However, it does hurt each year when I have to pull out my checkbook to pay the remainder of my bill. The last few years I’ve done myself a favor and gotten them done early, and it’s a big weight off of the old shoulders honestly. Maybe it’s a good time to go ahead and start figuring out your taxes, and if you’ve bought a home recently here is a list of things you’ll want to remember. Keep in mind that this was produced by Credit Karma and you should look into any services  that may be advertised or suggested before using them.

-Grady

Tax tips for homeowners

Young couple using a tablet to review their finances in their new home.

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Owning a home gives you access to special tax breaks, and taking advantage of them could help you at tax time.

“Many homeowners miss out on a lot of deductions every year because they aren’t aware of all the savings opportunities available to them,” says Josh Zimmelman, president of Westwood Tax and Consulting.

These seven tax tips could help you make the most of the many tax breaks for homeowners and maximize any income tax refund you may be owed.

1. Stay organized

Many of the tax deductions or credits you can take as a homeowner require you to keep detailed records of your home-related expenses. Start saving receipts and other information right away; don’t wait for tax time to roll around.

“If you take a few minutes to set up an organization system for your tax paperwork and financial records, it should be quick and easy to maintain,” Zimmelman says.

One way is to keep hard copies of all your financial documents and receipts. Or, you can scan and store your documents digitally. Apps like HomeZada can help you stay organized for a small fee.

2. Itemize your deductions

For the 2017 tax year, the standard deduction is $12,700 if you’re married filing jointly, $6,350 if you’re single or married filing separately, and $9,350 if you’re filing as head of household.

As a homeowner, though, you may have enough in eligible expenses to itemize your deductions. If those itemized deductions add up to more than the standard deduction, you could lower your tax bill even more.

Eligible expenses could include:

  • Home mortgage interest
  • Property taxes
  • Charitable contributions
  • State and local income taxes or sales tax (but not both)
  • Loss from property damage or theft
  • Some medical expenses not paid for by insurance
  • Work-related expenses your employer didn’t reimburse you for

3. Keep track of your moving expenses

Taking advantage of the moving expenses deduction can be a valuable tax tip for homeowners. If you moved into your home this year because of a work relocation, you might be able to deduct some of your moving expenses and some of the closing costs on your home.

To qualify for the moving expense deduction, you have to meet certain requirements. For example, your new workplace must be at least 50 miles farther from your old home than your old workplace was. Also, the move must occur within one year of starting the new job.

“Deductible [moving] expenses might include money spent on travel, moving trucks and storage units,” Zimmelman says.

As for closing costs, you can deduct some or all of the discount “points” you paid to lower the interest rate on the loan.

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4. Hold onto home improvement receipts

If you make any improvements to your home, the expenses aren’t deductible for the current tax year. However, when you sell the home in the future, they can help lower your tax burden then.

That’s because you can add home improvements expenses to your adjusted basis, which is generally what you paid to buy the house, plus the cost of construction, renovation, or other improvements you’ve made, minus any losses you’ve experienced from damage to the home.

For the tax year in which you sell the home, your taxes on the sale are based on the sale price plus any concessions you get from the seller (such as them paying closing costs) minus your selling expenses. If the amount you gain from that equation is higher than your adjusted basis you have a capital gain on the sale. So, the higher your adjusted basis, the less taxes you may have to pay on your profit from the sale.

5. Track your home office expenses

If you work from home, you may be able to deduct some of the expenses you incur for your business use of your home.

“Not every person who works from home can claim a home office,” Zimmelman says. “The home office must be used regularly and exclusively for business and be the primary site of the business.”

Types of expenses you can deduct include the actual expenses you incur for the home office and depreciation for the portion of the home used.

You may even be able to qualify for this deduction if you’re an employee. You have to meet additional requirements, however. For example, your remote work situation must be for your employer’s convenience. So, if you’re working from home just because it’s an option, you might not qualify for the deduction. If, on the other hand, the employer has no home office and you have no choice, you could be eligible.

6. Make energy-efficient updates

Adding a solar energy system to your home is not only good for the environment, it can also be good for your tax refund. The IRS allows you to take a tax credit worth 30 percent of the cost of installing a solar energy system.

If you’re thinking about holding off on taking advantage of this tax credit, don’t wait too long. The credit amount for residential improvements decreases to 26 percent in the year 2020, then to 22 percent in 2021, after which it goes away entirely.

7. Save your tax records

Here’s one tax tip for homeowners that’s probably valuable for most people. Once you take advantage of all the available deductions and credits in the current tax year, hold onto them.

“You never know when you might get audited,” Zimmelman says. “It’s important to have the documentation to back up your deductions.”

The law requires that you keep all the records you use to file your tax returns for three years from the date a return was filed. That’s typically how far the IRS goes back when doing an audit. Keep in mind, however, that the IRS can go back further (usually no more than six years back) if it identifies a substantial error in a return.

Bottom line

Owning a home can be expensive, but, fortunately, the tax breaks can help make up for the extra costs. As a homeowner, it’s critical to know which deductions and credits you qualify for and to make sure you maximize them to your benefit. Using Credit Karma Tax™ to file your taxes for free, and following these tax tips for homeowners could help.


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Source: Tax tips for homeowners could help reduce tax bills ⎸Credit Karma