Should You Renovate or Move Right Now?

Should You Renovate or Move Right Now?

COVID-19 is causing different challenges for everyone. Things that were once easy have become more complicated and time consuming, especially when it pertains to financial decisions. Deciding whether to renovate your home or move into a new one in the midst of this global pandemic for one, comes with added stressors. Try some of these helpful tips to take the financial anxiety out of moving or remodeling and make this milestone a little easier in the midst of these uncertain times.

Consider the area:

Location is more than just your home – consider the school district, surrounding community, neighborhood and amount of land. Most will agree location is everything, and If you love the location of your current home, that is a great enough reason to stay put. However, if you’re still adamant about moving for other reasons, these location factors could attract potential buyers as well… let’s review your options.

Renovating your home may require more than just a fresh coat of paint, and instead could mean much needed addition. If you plan to expand your family or if you just want more space, first determine whether your current property can accommodate the addition or renovation. The growth of your family may require more bedrooms or a larger common room, but if your home and property size are too small to make an addition, this may be a sign to move.

Another consideration is the community you live in. Whether it’s a cozy village, offers great community activities, or you just love your neighborhood, these are the things you may miss if you move to another area. The same sentiment goes for the school district. If it’s highly rated and you have kids in school, it might be worth staying in the area. If you decide moving is the best option for you and your growing family, look for a home in the area that checks off all of the boxes, while offering the space you need!

Keep all of these considerations in mind when looking for a buyer as well. If you are an empty nester contemplating moving, these details may be important for a young family looking to move into a top school district. Have your home appraised and research recent comparable homes sold in your area to decide if yours could be an easy sell in the current market.

Review your finances:

Buying a home is always an investment. If that’s the side you’re leaning toward, you have to consider if you’re financially ready to go through the process. Right now, mortgage rates are at an all-time low due to COVID-19, and that may be enough to sway you in the direction of buying a new home. However, you may need to invest in minor upgrades to your current home before listing it to sell, as well as pay an agent and movers. Set extra money aside for these improvements when budgeting for the big move. You may also want to consider keeping your current home to rent on Airbnb for added income, while buying a second home to live in.

If you’re leaning toward renovating your current home and staying long-term, you have a multitude of choices to consider depending on your financial situation. Home equity loans are an option for homeowners with a decent amount of equity built up in their purchase. Usually, if you’ve owned your home for five years or more, you can take out this loan to use for whatever you’d like. Most homeowners choose to use a home equity loan or line of credit for home upgrades but you can also consider liquidating investments, using a personal loan, margin loan, or pledged asset line of credit. Be sure to pay attention to interest rates, as they may be higher for these types of loans considering the economic times.

Be aware of timing:

Due to COVID-19, selling your home or starting renovations will take longer than usual. We are living in unprecedented times, where those who can help you sell or update your home are finding unique and optimal ways to get their jobs done, while still experiencing some barriers that may slow their services down. Be patient,and use this time to connect with your renovators or realtors to find or build your perfect home.

Right now, it’s smartest to work with a realtor if you’ve decided to sell your home. Viewings have to be done virtually for the time being and you will strongly benefit from using a realtor to advertise your home online. Be aware that selling your home may take longer than in years past because many people feel less secure in their finances. Additionally, it’s hard for a buyer to make this decision without seeing their potential new home in person.

On the other hand, finding a contractor won’t be easy either. All over the country, home renovation projects are being delayed or cancelled due to stay at home orders. However, some states have recently allowed construction workers back on the job, deeming them essential. If your desired contractor is able to work and follows all CDC regulations, you can likely get your home renovation started now!

All in all, there are positive and negatives to both renovating and selling during this time. Hopefully we have given you some things to consider when trying to decide between these two options. Keep in mind that your situation may be different from your friend or neighbor, and you have to do what is best for your family right now. Involving your financial advisor in this discussion can help provide both the financial insight and perspective of your long-term goals, along with an objective viewpoint on a decision that is often quite emotional. If you’re considering this major change and want to discuss it related to your specific situation, please don’t hesitate to reach out.

Webinar | The Fragility of Retirement in the Coronavirus Era

Webinar | The Fragility of Retirement in the Coronavirus Era

 

Our team at Merriman has been diligently following COVID-19 pandemic updates across the world and in our own communities.

We have also been hearing lots of questions from clients, prospects, friends, and family.

Can I still retire or stay retired? Am I still able to relocate as I had planned? Should I sell all of my stocks now? Should I go to cash? Should I use all the cash I have to buy in? Should I file for Social Security earlier than planned? How will I pay for a hospital stay if I need one?

If you are worried about some of these things too, I have good news.

We have partnered with America’s Retirement Forum (a nationwide non-profit dedicated to providing financial education to adults) to organize a webinar that can help.

Why trust me?

I am the Director of Advisory Services at Merriman Wealth Management and an instructor through America’s Retirement Forum. I have been helping people transition into and navigate retirement for over 20 years, and Merriman has been in the business of educating investors since our founding by Paul Merriman in 1983.

In this webinar I’ll discuss:

  • The short and long-term impacts of the COVID-19 pandemic on the economy
  • Why this recession may be different from what you have lived through before
  • 5 specific steps designed to protect and maximize your retirement income in the middle of a pandemic (yes, you can implement them yourself)
  • 6 strategies and issues to discuss with your advisor

In this time of worry, false information, and uncertainty, make the choice to spend some of your time learning about what you can do to retire well. And the best part is that you don’t have to put your health at risk or leave the house. All you need is 30 minutes and an internet connection to watch this free webinar.

Click here to watch the webinar now!

Don’t delay: Some of the strategies discussed in the webinar are time-sensitive. I would hate for you to miss an opportunity or to take action without having all the facts. We want to help you avoid mistakes and take the proper steps toward securing your financial future.

Stay home, be well, and use this unprecedented time to get informed. Feel free to reach out with any questions.

Employee Spotlight | Tyler Bartlett

Employee Spotlight | Tyler Bartlett

Kim: How did you come to Merriman?

Tyler: I had heard of Merriman from Paul’s weekly radio show. I was working at US Trust and they were going through some changes, and I had started thinking about opening up my own advisory firm.  I would often talk with a fellow co-worker, Mark Metcalf, about what my firm would look like.  Both of us had been doing research on advisory firms, and learned more about Merriman. Mark interviewed with Merriman and got a job as an advisor. He said it was a great place to work and that I should apply.  I interviewed and thought about whether I wanted to be a competitor, or join a firm that was already doing a great job of taking care of clients.  Here I am 13 years later.

 

Kim: What is your role at Merriman and what do you love about working here?

Tyler:  I started as an advisor in 2006 and in late 2018 I became the Director of Advisory Services.  Helping advisors and the company improve the services we offer to clients, by overseeing all things that impact advisors and the advice we give.  There are many things to love about working here, from an employee perspective it’s a family-oriented atmosphere.  We all support each other through the ups and downs of life.  I feel that because we are all so well taken care of, we take care of our clients with the same intent.  For clients, I love how thorough we are with everything we do, and we’re always making sure that we emphasize what is in their best interest, a true client first mentality.  Everything we do is to better the client experience, while continually improving how we can provide better advice on all aspects of our client’s life as well as being transparent with the research that goes along with the improvements.

 

Kim:  How do you spend your time outside of work?

Tyler:  With my three kids who are all very active.  My daughter, Ivy, is a sophomore and plays basketball year-round.  She is an honor student, involved with the Associated Student Body, and regularly volunteers within the community.  My son, Owen, will be a freshman in high school and plays basketball year-round, and is looking forward to playing football in high school.   My youngest son, Caleb, is in third grade. His current passion is playing ice hockey.  Our favorite family vacation spot is Seabrook, where we can take our two dogs.  There are lots of kid activities as well as the beach that keep us busy and able to focus on family fun.

 

Kim:  Merriman has employees take the StengthsFinder quiz so we can understand how to best work with each other. What are your top five strengths?

Tyler: 

  • Competition
  • Achiever
  • Focus
  • Discipline
  • Consistency

Tyler Bartlett featured in “How to Go from Middle Class to Millionaire”

Our very own Tyler Bartlett was recently featured in an article from Guide Vine: How to Go from Middle Class to Millionaire, about the patience and discipline required to become a millionaire. Here’s a snippet:

Here is the good news: millionaire status is very much within the reach of America’s middle-classes who earn higher-than-average incomes. A typical middle-class family has a combined household income of $97,000, with upper middle class households bringing in incomes above $100,000. Bartlett offers an example of a couple living in Seattle. Like typical upper middle class Americans, both are college-educated professionals with good, steady incomes. The couple, a real estate and a sales executive, together earns $150,000 per year. For 13 years, this couple saved as much as $1,000 per month. They maxed out their 401(k)s. Today, they have more than $1 million in investible assets. “They took hard steps,” said Bartlett. “They worked full-time jobs and had the discipline to do the right thing financially.”

Do you have what it takes? Read the full article at Guide Vine here.

Merriman INSIGHT – This too shall pass

The stock market has delivered a very volatile week to investors, perhaps striking a nerve not felt since 2008. As I write this, the S&P 500 has dropped more than 5% in a week and almost as much today, causing many investors to recall the sickening downturn of what some called “The Great Recession.”

Since 1980, the average intra-year decline for the S&P 500 has been -14.2%, even though annual returns were positive for 27 of those 35 years, or 77% of the time.

082415Chart

The S&P 500 has more than doubled in value from March of 2009 , and we have gone more than 1,400 calendar days without as much as a 10% correction. This is the third longest stretch in over 50 years without such a decline. Since 1928 the S&P 500 has experienced a 10% correction almost once per year with an average recovery of 8 months.

082415TableCorrections of 20% or more for the S&P 500 have historically occurred at the end of market cycles. In the short run the S&P 500 has pulled back 5% an average of four times per year, or about once per quarter. In fact, the S&P 500 has experienced a 5% or greater pullback every year since 1995. Drawdowns of 2%-3% occur far more often, at least monthly on average. As such, pullbacks alone should not be a reason for panic.

In times of increased volatility such as we have experienced, it’s important to revisit these important lessons that are the underpinning of a successful investment strategy. (more…)

Are you making these mistakes with your car insurance?

Insurance can seem like a nasty word, and I’ve found that most of us would rather not talk about it. However, it’s all about protecting and preserving your assets. Our job is to help our clients grow their wealth so they can achieve all that is important to them. However, we’d be foolish if we neglected to also help them mitigate risks that could eat away at all their hard work.

When it comes to car insurance, I’ve found a few common mistakes.

Too little insurance

Many states require all drivers to maintain a minimum level of coverage in order to drive legally. Some states even require a minimum level of coverage for medical or personal injury. This is just a minimum standard and is often not even enough to cover the average cost of repair from an accident. In every accident, the human body is the weakest link in the chain and the one at greatest risk of injury. Cars are a fixed cost to repair – you know how much a BMW will cost to repair or replace, whereas we don’t know how much it will cost to save or repair a human body.

Rather than getting the minimum, consider carrying coverage based upon the car you drive, and more importantly, the cost of the other cars on the road.

Too much insurance

Every once in a while, I run across a situation where someone has purchased higher limits of coverage. Usually this person is terrified of the risks that exist in the world and will pay absolutely anything to protect themselves. As a result, they often have excess liability or umbrella insurance coverage, which is usually a very wise investment.

This additional insurance is fantastic, and something that I suggest for almost everyone. However, they might be paying more for auto insurance coverage that they just don’t need. If your auto insurance liability coverage is $500,000 and your umbrella coverage begins at $300,000, you are paying for $200,000 of unnecessary coverage. You could reduce your auto coverage to $300,000 and save on your premiums.

This is generally a good idea. However, if your umbrella coverage doesn’t include an additional layer of underinsured (or uninsured) motorist coverage, you might want to keep the higher coverage on your auto policy.

Incorrect deductibles

Generally speaking, the higher the deductible, the lower your premiums will be. The deductible is the amount you are responsible for before the insurance company provides protection.

I see situations where the deductibles are far too low and one could easily save 20-40% on their premiums by simply increasing the deductible. If you are able to stay accident free, you’ll often save enough on the premiums over the next few years to be able to cover this increased deductible. This isn’t always the case, though. I had a client looking to increase their deductible from $1,000 to $2,000 and we were both shocked that the premium savings was less than $100 annually.

If you drive an older car, it doesn’t make sense to have a low deductible for collision or comprehensive coverage on a vehicle that is relatively inexpensive to replace. In fact, if your car is older, consider getting rid of collision and comprehensive coverage altogether. If you do this, it’s still important to carry the proper amount of liability protection.

Not combining policies with one company

If you have your auto policy and homeowners policy with the same carrier, you’ll tend to save on your premiums and have better coordinated coverage with your umbrella policy, if you have one.

Failing to review your coverage

It’s very easy to get your insurance in place and then forget about it for many years. There are a few problems with the set it and forget it approach as your lifestyle and potential risks may change over time. It’s always good to have a history with an insurance company. However, you should periodically review your coverage to make sure that it fits your needs today.

Solely focusing on the cost

Insurance is one area where focusing solely on the cost could get you in a lot of trouble and financial pain. I find that many of us don’t want to be educated on the need for various types of insurance coverage, and often view this education as a sales pitch. You may find the lowest absolute cost for any given coverage, but it might pale in comparison with what a competitor offers for just a few dollars more. The devil is in the details, and I suggest looking at the details of the coverage so that you know exactly what you are getting for your money. Also, rather than focusing solely on the cost, you should work with a professional who will take the time to evaluate your situation and help you understand your insurance needs.