Day: September 14, 2020

Personal Finance Daily: Amazon sellers are charging up 14 times the usual price on some household products and student debt is fueling the Black-white wealth gap

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Stay safe, MarketWatchers, and don’t miss these top stories:

Personal Finance
As the real-estate market heats up, here’s how first-time buyers can keep their cool

The danger is letting a scarcity mentality lure you into overspending, or settling on a house that you’ll regret later

Amazon sellers are charging up 14 times the usual price on some household products, consumer advocates say

‘We continue to actively monitor our store and remove offers that violate our policies,’ an Amazon spokesman said.

People who tested positive for COVID-19 were twice as likely to have recently eaten at a restaurant: CDC

Indoor dining is coming back to NYC — here’s why you might want to think twice about it.

TikTok saved my business: Candy retailer finds internet fame as COVID-19 forces a pivot

TikTok videos helped Candy Me Up keep going after the pandemic hurt its catering business.

‘We were frustrated and afraid’: Some COVID-19 patients suffer lung and heart damage, but there’s encouraging news for these ‘long haulers’

Two papers presented at the European Respiratory Society International Congress examined patients who were suffering health aftereffects of coronavirus.

Student debt is fueling the Black-white wealth gap — and pursuing a college degree has become ‘racialized,’ this professor says

Black young adults hold 10.4% less wealth on average than their white counterparts due to student debt, according to Fenaba Addo’s research.

Tents fit for a wedding reception and artfully constructed wooden bandstands: Welcome to outdoor classrooms during a pandemic — and now for the bad news

‘We have several children who are runners and that terrifies us. In a building you can control the situation, but outside you can’t,” says Rosier-Rayburn, a special-education teacher.

Elsewhere on MarketWatch
Biden says ‘4 more years of Trump’s climate denial’ could mean more suburbs ‘burned in wildfires’

Democratic challenger Joe Biden on Monday attacks President Donald Trump’s responses to the wildfires in the West and climate change, saying the fires represent “yet another crisis he won’t take responsibility for.”

New Japan leader Yoshihide Suga was Shinzo Abe’s key enforcer of Abenomics — now he has to tackle coronavirus and a recession

Japan’s ruling Liberal Democratic Party has chosen close Shinzo Abe confidant Yoshihide Suga as leader and next Prime Minister, in an overwhelming show of support for the resigning PM’s policies.

Industrial meat is spreading disease, killing workers, ruining the environment

The reduction of habitats and the skyrocketing number of farm animals increase the possibility of infectious-disease transmission from animals to humans.

When the pandemic ends, these are the places you want to invest

The COVID-19 pandemic has taken Wall Street and investors on a roller-coaster ride this year. But what happens when it ends? Here are the sectors that strategists at AB Bernstein say investors should start thinking about now.

CityWatch: Macy’s Thanksgiving Day Parade to go virtual this year

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For the first time in nearly 100 years, the Macy’s Thanksgiving Day Parade in New York City will be a virtual event this November because of the coronavirus pandemic, organizers announced on Monday. 

Typically one of the city’s biggest annual events, the downsized show will go on without the usual throngs of spectators. Instead, its signature features, from the enormous helium balloon characters to the dance performances, will be pretaped in Manhattan’s Herald Square over two days and broadcast on Thanksgiving morning, Nov. 26, as a “special presentation,” Macy’s M, +2.12%   said. 

Sixty-foot balloons, the parade’s main attraction, were nearly its downfall last year, when dangerous winds threatened to rip the floating giants from the hands of volunteers. This year, each colossus will be rigged to a handful of approved vehicles, cutting out the need for the usual 80-100 handlers per balloon, the company said.

“While it will certainly look different in execution, this year’s Macy’s Parade celebration will once again serve its historical purpose — to bring joy into the hearts of millions across the nation,” said Susan Tercero, executive producer of Macy’s Thanksgiving Day Parade on Monday. She called the annual event the company’s “love letter” to New York City.  

Organizers have reduced the total number of participants to one-quarter of the usual crew — which count more than 8,000 in a normal year. All high school and college marching band performances are canceled, and the event will exclude performers under 18 years old, the company said in its announcement. 

Also see: ‘It’s a five-alarm fire, a 100-year fiscal tsunami’ — N.Y. Transit boss wants subway riders to come back

The parade, which began in 1924, has grown from a modest gathering of Macy’s employees in costumes and floats to a massive multimillion-dollar event with thousands of volunteers and performers. Last year, the parade drew 3.5 million live spectators to Midtown Manhattan and 50 million television viewers, according to the company. 

You might like: Watch the balloons get ready for the parade in this time-lapse video

“One of the most beloved events every year is the Thanksgiving Day Parade,” Mayor Bill de Blasio said during a briefing on Monday.

It wasn’t immediately clear what the economic toll of the change will be on the city, which had to alter numerous tourist attractions — from the U.S. Open Tennis Championships over the past two weeks to the annual September fashion shows — in light of the health crisis. An email sent to the mayor’s office on this was not immediately returned. 

Don’t miss: It ain’t over! It’s New York! The city will survive the virus despite the current tough times

It will be the first time since World War II that Macy’s paraders won’t march down New York City streets on Thanksgiving. 

“It will not be the same event we’re used to,” de Blasio said. “They are reinventing the event for this moment in history.”

Outside the Box: The 5 questions to ask before choosing a financial adviser

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Choosing the right investment adviser for your needs should be much easier than it is.

Unfortunately, much of the investment advice and wealth management industry remains mired in confusing practices, a lack of transparency, and complex terminology that makes it all too easy to end up with a bad fit.

Even very smart, high-net-worth individuals can stumble into solutions that don’t deliver what they expected in terms of the services provided, the resources at their disposal, the fees they’re paying, and the investment vehicles they can access.

One surprising thing is how many people still view financial advisers as essentially all the same. They don’t appreciate one of the most important dividing lines in the industry — that between Registered Investment Advisers (RIAs) and the rest.

RIAs have a fiduciary duty to act in their clients’ best interest and their fees are independent of the investment products they recommend. In other words, their success is tied firmly to that of their clients.

At the other end of the spectrum are commission-based brokers who get a percentage of whatever product they sell their clients. In between, you have banks, brokers and trust companies that may push clients toward their own in-house products and share fees with third-party solutions.

The difficulty in spotting these vital differences is mostly by design. Many firms are not transparent about the fact they’re not bound to work in your interests and have a stake in selling you certain products.

Most clients weighing the options lack the in-depth understanding of the industry to determine what’s best for them. Following are five key considerations to make the most informed decision:

1. What problem are you trying to solve?

The question that everyone should ask before choosing an adviser is: why do I need help? Is it because you just want your investments and other assets managed, or are you looking for a more comprehensive wealth management solution? The latter involves a more holistic approach to your overall financial situation, including in-house expertise to address estate and tax planning. But it’s important to do your due diligence before signing up and to ask questions about the expertise and services available. It’s not uncommon for firms to sell themselves as wealth managers only for clients to find they don’t provide many additional services.

2. How does the adviser get paid?

If they’re an RIA, the answer is pretty simple: their payment is a percentage fee of your assets under management or a flat fee. But when dealing with other forms of investment professionals, you need to ask probing questions about who’s making money and how. Advertised costs might seem low but there’s a lot of potential for hidden fees eating into your returns, such as through portfolio changes.

3. Who’s on your team?

It’s vital to know what sort of team you have working for you. Who’s making the key investment decisions? Is it being done by one person or a committee with deep expertise and experience? A lot of the leading advisory firms have deep bench strength, but in other cases clients may think they are getting advice from an institution when really, it’s from one individual. What is the depth and quality of their resources? Many firms can tell a good story but might not have the resources to back it up or the partnerships to access the best opportunities. Most clients will want an adviser that can thoroughly dissect and analyze investment opportunities, including through on-site visits, and that can demonstrate strong data gathering abilities.

4. Is your adviser proactive?

As in any good relationship, you shouldn’t be left feeling lonely by your adviser. Make sure you choose an adviser who’s committed to checking in with you and responding to changing events. If you went through the recent coronavirus-driven stock market gyrations without getting a call from your adviser, you may be with the wrong firm.

5. Whose money is it?

It’s interesting how many clients become very passive once they’ve handed over their money, almost as if they’ve forgotten it’s theirs. Often, they ask permission to make withdrawals, or just go along with their adviser’s proposals without asking any tough questions. The money may have shifted from your bank account to an investment account overseen by your adviser, but it’s still yours, so your adviser should be responsive to your changing needs.

There are many options, choose wisely.

At the end of the day, many clients who put value in objectivity are likely to lean toward an RIA solution for the simple but powerful reason that they’re getting someone who’ll be firmly on their team and acting in their best interest. There may be some cases where a non-RIA solution is a better fit. Those with lower wealth levels and simple needs might do better to opt for a basic, low-cost provider. Keep in mind that varying options have advisers motivated by varying dynamics — makes sure you understand those differences and how each choice can result in a different level of service, fees, and advice.

Other investors might go with a bank or broker in order to cement existing relationships, maybe to get a better credit card, elite status, or a lower mortgage rate. These can be valid reasons as long as you go in with your eyes open, understanding the risks and knowing that those operators aren’t in the business of giving away free money.

Jeff Watkins is a tax partner at Plante Moran who works with high net worth clients. Sara Montgomery is a senior manager at Plante Moran Wealth Management who specializes in family education and philanthropy.

Encore: Biden’s 401(k) plan: Changing tax incentive for retirement saving is a great idea

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The financial services industry seems very exorcised by a relatively modest proposal in Joe Biden’s tax plan — namely, changing the tax incentive to save for retirement from a deduction to a flat, refundable tax credit.

Let’s see if this proposed change would really “upend” our entire 401(k) system.

Saving under current law is tax advantaged. Employers and individuals take an immediate deduction for contributions to retirement plans and participants pay no tax on investment returns until benefits are paid out in retirement. This favorable tax treatment significantly reduces the lifetime taxes of those who receive part of their compensation in contributions to retirement plans relative to those who receive all their earnings in cash wages.

Read: Will Biden’s 401(k) plan help you or hurt you?

The favorable treatment accorded retirement plans costs the Treasury the difference between the present value of revenue foregone and the present value of future taxes each year. The 2020 cost for all retirement plans is estimated at $286 billion, roughly half attributable to 401(k)-type plans. Those are big numbers.

These tax incentives have two problems.

First, they give the biggest reward to high earners. If a single earner in the top income tax bracket contributes $1,000, he saves $370 in taxes. For a single earner in the 12% tax bracket, that $1,000 deduction is worth only $120.

In terms of simple fairness, it makes no sense to have the size of the incentive depend on earnings.

Second, until relatively recently, it was unclear whether the tax incentives actually encouraged people to save more. A study of Danish data appears to have resolved this question. It found that about 85% of people are “passive” savers who pay little attention to tax incentives; they adjust their spending to their take-home pay, and therefore their saving is very responsive to defaults such as auto-enrollment. Only 15% are “active” savers who would be responsive to tax subsidies; but they respond to subsidies by shifting their money across accounts rather than by altering their total saving. Thus, defaults such as auto-enrollment are more effective than tax incentives at increasing saving.

Read: Worried about being bored in retirement? Your financial adviser has a plan

In response to these issues, several policy experts have suggested restructuring and/or cutting back on the tax expenditures for retirement plans. The Biden proposal restructures the incentive by replacing the deduction with a tax credit, which is estimated to be 26%. Thus, low-wage workers would be rewarded more than under current law and those in the top brackets somewhat less. And the credit would be refundable so that even workers with no tax liability would benefit from putting $1,000 into a 401(k) plan. As under current law, earnings would continue to accrue tax-free, and withdrawals at retirement would continue to be taxed as regular income.

My view is that the Biden proposal is a desirable change on equity grounds and would have little effect on contribution patterns. It doesn’t merit all the hysteria.

The big challenge is to close the coverage gap so that low earners as well as high earners are automatically enrolled in a workplace savings program. As the study based on the Danish data showed, automatic enrollment — not financial subsidies — is the key to increasing saving. The Biden website says almost all workers without a retirement plan will have access to an automatic 401(k).

Now that would be a really big deal.

FA Center: Saving for retirement already challenged women — then COVID-19 hit

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American women are far behind men in terms of preparing for retirement. Even before COVID-19, women by the age of 65 were 80% more likely than men to be living at or below the poverty line. Women aged 75-to-79 were three times more likely to fall below the poverty level.

Women also are more likely to outlive their investments. One reason is that women live longer than men. In 2017, the average life expectancy for a 65-year-old woman in the U.S. was 86 years, versus 83 years for a man.  Moreover, one out of three women will live to 90, while just one out of five men will do so.

Another reason for women being less secure financially is that women typically are caregivers of both the young and the elderly.  In the U.S. , 70% of mothers work, and almost one-quarter of women ages 55 to 64 care for an older relative.  Frequently, the only option for these women is part-time work; women represent 24% of the part-time workforce — twice that of men. 

Divorce also takes a heavy financial toll on women. Since 1990, women 50 years of age and older have seen the probability of divorce in their later years increase. The odds of getting divorced between the ages of 50 and 64 were 7% in 1990. Now it’s 13%. With divorce comes a division of assets, including retirement accounts and investment properties. It’s much more difficult to prepare for retirement when you rely on just one income.

Another factor is that women typically are more conservative investors than men.  While 52% of men say they’re willing to take average- or above-average investment risk, just 32% of women would do the same. vs 52% men. 

Now comes COVID-19, bringing several new challenges for a woman to meet her retirement goals.  Further impediments include:

  • Increased child care and/or elder care costs due to the quarantine associated with the pandemic. 
  • Job loss or salary reduction due to the slow U.S. economic recovery.
  • Domestic tensions from the pandemic increasing the divorce rate, as happened in China once its pandemic restrictions were lifted this spring.  
  • Uncertainty in the U.S. stock market. 
What you can control

Women can create more certainty regarding their financial health by focusing on what they can control, namely:

1. Review your investment portfolio: Evaluate your allocation to stocks, bonds and cash. Compare the valuations of your statements to those of the past six months.  Have some positions gained a great deal, or have they become a larger part of your holdings than you want?  Be prudent and trim winners, and determine if there are some areas of the portfolio that promise greater upside than others.

2. Plan for the long-term: This quick calculation can determine if your current nest egg is adequate for retirement: simply multiply your estimated retirement expenses by 25. This is a “base case” for what the value of your investments should be at retirement in order to withdraw the industry standard of 4% of the total per year. 

Remember, this is without considering inflation or the fact that health care costs increase as we get older. Also, review your Social Security benefits. See if it makes sense to take these early, or are you going to have to wait until the maximum withdrawal age of 70. In addition, review your health care insurance coverage.  Will your investments need to supplement your insurance?  Finally, factor in the possibility of early retirement and/or lower wages. 

3. Increase your portfolio’s risk tolerance — wisely: Low interest rates make the traditional 60/40 portfolio (60% equities and 40% bonds) or 70/30 portfolio obsolete. Individual and institutional investors alike are reevaluating their asset allocation  to meet investment return objectives. Consider smart ways to add investment risk. Look at strategies that include stocks with high-paying dividends, writing call options, as well as good long/short managers (those that are skilled at selling overvalued stocks).  Also, if you qualify, consider opportunistic private debt and other alternative investments.

4. Be financially literate: Arm yourself with knowledge. Contrary to what the investment industry wants you to believe, investing in public markets is not rocket science. Start reading daily financial publications. Become familiar with what moves not only the stock market, but the bond market as well. You are not going to know everything, but you will discover which questions to ask.

5. When in doubt, hire a professional:  Your investments may need to support you through 30 years or more of retirement. As you age, you have less time to recover from significant market pullbacks. A credentialed financial adviser is worth their fee and can provide peace of mind in difficult times like now.  

Michelle Connell is founder and president of Portia Capital Management. She also founded Portia’s Children, though which up to 10% of her firm’s profits are donated to the North Texas charity Educational First Steps.

Read: Asking a financial adviser these questions can help put your money in the right hands

More: How retirees should invest in a time of record-low interest rates

FA Center: When you want to retire but your partner doesn’t, money isn’t necessarily the real issue

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A good marriage requires good communication. But what if spouses open up to each other about their future only to discover that they disagree over their respective timing to retire?Anxiety sets in if only one half of a couple is ready to retire. Fears can spike if their clashing assumptions — and different needs — expose a deep rift.

Skilled financial advisers know how to educate couples without overstepping any boundaries. It takes diplomacy and keen listening skills to offer wise counsel while not getting ensnared in marital squabbles.

“They are delicate and complex issues, sometimes bringing up very difficult feelings on both sides,’ says James Lange, an adviser and attorney in Pittsburgh, Pa. Crafty spouses might even enlist the adviser to convince their mate to retire. For example, a workaholic refuses to call it quits, despite a massive nest egg. “Sometimes,” Lange adds, “couples could use a therapist in addition to a financial adviser on these matters.”

Author of “The IRA and Retirement Plan Owner’s Guide to Beating the New Death Tax,” Lange works with many college professors who love their job and want to keep it well past age 65.

“Their spouses often prefer they retire so they could spend more time together, travel and spend time with the kids and grandchildren,” Lange says. “I’m sometimes brought in to prove the spouse’s contention that the professor could afford to retire and be fine. Even then, most of them will continue to work as long as they feel productive and appreciated.”

Some advisers redirect a couple’s disagreements over retiring into a friendly negotiation. After encouraging both parties to share their ideal scenario for the future, planners try to bridge gaps and encourage compromise.

“Typically, we don’t like to get in the middle of these conflicts,” says Luke Lloyd, a Cleveland-based adviser. “But if a husband and wife have different goals in retirement, I’ll say to them they have to give and take and meet in the middle.”

Addressing a couple’s fears of transitioning to retirement, especially if they’re not on the same page about timing, often involves letting them vent freely. Once they feel heard, they may be more receptive to reappraising their concerns.

Danny Michael, a certified financial planner in San Diego, Calif., likes to give each spouse a chance to open up. They speak as long as they want, without interruption, in an attempt to articulate their values, goals and perceived obstacles.

“Through this process, they learn from each other,” he says. “They often say, ‘I never knew about those things.’ A lot of times, they weren’t listening to each other” until this meeting.

Dueling priorities can fuel a couple’s differing views on their readiness to retire. If one of them intends to spend lavishly while the other favors austerity, an adviser can help them align their expectations and preferences.

When only one spouse buys into their proposed timetable for each of them to retire, such disagreements can mask an underlying fear. Examples include the loss of professional identity that comes with ending a prestigious career or the perceived risk of money running out earlier than anticipated.

“You have to get to the crux of the fear,” says Marcel Winger, a certified financial planner in San Antonio, Tex. “I’ll say to clients, ‘I’m a financial planner for you as a couple and for you as individuals. So I want to hear each of your deeply rooted concerns about retirement.’ From there, it’s promoting an environment of self-realization where they can come together.”

More:Worried about being bored in retirement? Your financial adviser has a plan

Plus: How retirees should invest in a time of record-low interest rates

The Moneyist: My late husband did not see his son in 30 years. Should I mail his son photos and other memorabilia — and risk him making a claim on his estate?

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Dear Moneyist,

My late husband had not seen his son in over 30 years. He and his son’s mother decided on her receiving a larger share of assets in lieu of child support. He did see his son a few times a year for the next several years, but contact stopped during the teen years when his son no longer wanted to come. They lived in different states. The son is approximately the age of my own children, who are in their early forties.

There was no probate after my husband’s death because he had no separate assets. The house and car were titled in my name because I had purchased them prior to remarrying. All of our bank accounts were joint although we treated them as separate accounts. He had no retirement funds other than Social Security whereas I was still working. When I signed my will shortly after my husband’s death, the lawyer told me that probate was unnecessary since there was nothing to probate.

I put together a box of a few special items that belonged to my husband — his medals from his time in the service, pictures of him over the years, including some with the son, his watches, and so on — thinking that the son might want them some day. I’m sure the son has no idea that my husband relocated and remarried so it isn’t particularly likely that he will knock on the door one day. Friends of my husband tried to initiate contact once during a health crisis before I met him, and the mother refused.

I hate the idea that my own kids will simply trash these things one day because they will have no idea what to do with them after I die. I found the son’s mother’s address online. She is in her mid-70s and never remarried. Would I be making a mistake if I mailed the box to her? I don’t want the son to demand “his share” when there is nothing else for him. Having to hire a lawyer to defend that position, though, can be expensive. So should I leave well enough alone?

Want to do the right thing

Dear Right Thing,

Your husband’s son has a right to know that his father passed away, regardless of inheritance or photographs or other family memorabilia, even if he did not see his father in over 30 years. Teenagers can be angry, confused, and/or simply want to do their own thing and find their own identity. He may have also been influenced by his mother, given that she refused previous attempts to make contact, so sending a box of mementos to her may not necessarily reach his son.

The Moneyist: I filed a joint tax return with my estranged wife because she is a gambler and her finances are a mess. But I got NO stimulus check — what can I do?

See if you can find his son on Facebook, LinkedIn, Twitter TWTR, -0.05%  or by other means. Failing that, reach out to his mother and tell her that her son’s father died, and that you have some things that you would like to send directly to her son from the time they spent together when he was a child. Explain that whatever has happened in the intervening years, it’s your belief that your late husband loved his son and you are available should he want to know more about his father.

The Moneyist: I didn’t get my stimulus check because I owe back child support. It’s not fair. My stepchildren rely on me — what can I do?

Ideally, it would be best to contact him directly and leave his mother out of the process entirely. You could start with a couple of photographs and a letter, if you manage to get his address. Or you could send copies of the photographs and address them to his mother’s address, with the same letter enclosed. If he asks about inheritance, you can explain that to him and offer to provide full transparency through a lawyer, and/or consider a monetary gift.

You are connected through your husband, and sometimes death provides a bridge for those who are left behind. Who knows? One day you might even end up as friends.

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com. Want to read more?Follow Quentin Fottrell on Twitterand read more of his columns here.

Don’t miss:‘We will not have a vaccine by next winter.’ Like the 1918 Spanish flu, CDC says second wave of coronavirus could be worse. So what happens now?

Hello there, MarketWatchers. Check out the Moneyist private Facebook FB, -0.55%  group where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

Coronavirus update

As of Monday, COVID-19 had infected 29,007,970 people worldwide, a figure that mostly does not account for asymptomatic cases, and killed 924,116. The U.S. still has the world’s highest number of COVID-19 cases (6,520,235 and 194,081 deaths), followed by India (4,846,427), Brazil (4,330,455) and Russia (1,059,024), according to data aggregated by Johns Hopkins University.

The Dow Jones Industrial Index DJIA, +0.47% and the S&P 500 SPX, +0.05% closed up modestly Friday, but the Nasdaq Composite COMP, -0.60% ended lower, and had its worst week since March. Doubts about traction for further fiscal stimulus from Washington and the right-sizing expectations about a vaccine are likely two factors currently concerning investors.

NerdWallet: As the real-estate market heats up, here’s how first-time buyers can keep their cool

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This article is reprinted by permission from NerdWallet.

Shopping for your first house is stressful enough, but when you’re finally ready to be a homeowner and the pickings are slim, the process can become a roller-coaster ride of hope and fear.

“Buyers walk in a home and say, ‘This is it!’ Then, they see all the business cards [from other agents] on the table and start panicking,” says Georgia Stevens, president of the Seattle King County Realtors and managing broker of the Compass Washington agency.

Today’s housing market is red hot, with homes getting multiple offers and selling above list price in many cities. Sixty-eight percent of U.S. homes sold in July were on the market for less than a month, and the median existing-home price was up 8.5% from July 2019, according to the National Realtors Association.

Read: Mortgage rates fall to a new record low — but not all Americans will be able to access them

In conditions like these, it’s natural to worry about losing out to other buyers. But the bigger danger is letting a scarcity mentality hijack the process, luring you to overspend or settle on a house that you’ll regret buying later. Here’s how to keep a cool head as a first-time home buyer.

Start with an authentic budget

Get on solid financial ground from the beginning. Figure out how much home you can afford, and get preapproved for a mortgage before looking at homes. A mortgage preapproval is an offer from a lender to loan you a certain amount under specific terms. Without one, real-estate agents and sellers won’t take you seriously, and offers from preapproved buyers will likely be accepted over yours.

Decide on a price range based on both how much you can borrow and your budget, making sure to give yourself room to breathe.

“I always caution borrowers not to stretch for a home, and to establish a realistic budget that will afford a financial cushion for the future,” Scott Lindner, national sales director for mortgage lending at TD Bank, said in an email. “This is even more important in the current uncertain environment.”

Learn what to expect before you shop

“It’s all about preparation,” says Alicia Holdaway, president of the Salt Lake Board of Realtors in Utah and an agent with Summit Sotheby’s International Realty.

Before she shows buyers any homes, Holdaway walks them through a real estate contract and explains all the terms and what may be negotiated. Together, they discuss the risks of making specific concessions, so the buyers can decide the terms they feel comfortable with.

“Right now, the emotion is lowest and logic is highest,” she says. “As soon as we look at homes, those are going to swap.”

Work with an experienced real-estate agent who can guide you through decisions before you get swept up in the love for a home and the drive to win, Holdaway advises. Then, when you’re making offers, your agent can help you stay grounded.

“It’s so important that buyers work with somebody who can stay steady,” she says.

Be firm on your needs, flexible on the rest

Think deeply about why you want to buy a home, says Josh Harris, a certified financial planner and lecturer in finance at Clemson University. Use those reasons to help distinguish between the features you need and the amenities that would be nice to have.

Then, be picky about the must-have items, Stevens says. She tells of clients who recently were tempted to settle for a home with a defective floor plan — there was no shower upstairs with the primary bedroom. Stevens had her clients walk up and down the stairs and imagine doing that every morning to shower and get dressed. They decided to keep house hunting.

Be willing to compromise on cosmetics you can change and amenities you don’t need. Sometimes first-time buyers expect homes to look perfect, says Stephen Medeiros, president-elect of the Massachusetts Association of Realtors and an associate broker at Keller Williams Realty in Dartmouth.

Remember, you can repaint, scrape off wallpaper and change things like flooring and countertops. That’s what Medeiros did when he bought his first home. Years later, after improving it and building equity, he sold the house for a profit and bought a nicer home.

“A house may not be HGTV-ready, but it can be something that can be improved over time,” he says.

Don’t let negative emotions get the upper hand

It’s natural to feel anxious and frustrated sometimes when you’re house hunting. Just don’t let those emotions take over.

Anxiety can lead you to rush into bad decisions or get stuck and make no decisions at all, says Harris, who is on the board of the Financial Therapy Association. Take a break to get some perspective when you’re feeling anxious. Confide in a friend who’s outside the homebuying process, and get a reality check from your real-estate agent.

Pace yourself to prevent frustration. A common first-time home buyer mistake is looking at too many homes, Holdaway says. That gets exhausting and can lead buyers to make decisions just to get the process over with.

“They’re sick of looking, and they say, ‘I’ll make it work. I just need a house,’” Holdaway says. Narrow the homes you visit to those that meet your budget and criteria.

Stick to your price range and priorities

There are many concessions you can make to win over a seller. They range from low-risk measures, such as being flexible on the closing date, to high-risk moves, such as waiving the right to request repairs or to back out of the deal depending on the home inspection results. The hotter the market, the more concessions buyers are under pressure to make. Be sure you understand the risks, and don’t waive any protections you can’t afford.

Learn more: Here’s how homeowners and new buyers are taking advantage of record-low mortgage rates

You may have to offer above the list price to compete in some markets, but make sure that offered price is still within your budget. Look beyond the bidding war to the years you’ll spend repaying the mortgage.

“You don’t want to live for your home,” Medeiros says.

Sticking to your budget may mean you’ll lose out on some homes. But that’s OK.

“There’s always another great house,” Stevens says. “This isn’t the only one.”

More from NerdWallet:

Barbara Marquand is a writer at NerdWallet. Email: bmarquand@nerdwallet.com. Twitter: @barbaramarquand.

Autotrader: Here are 15 top subcompact SUVs

This post was originally published on this site

The subcompact SUV segment is one that has exploded in popularity in recent years. What used to be a bit of a niche market with only a few options has grown to the point of almost every major automaker having their own offering of a pint-size SUV with cute styling and reasonable pricing.

Here are the best subcompact SUVs for 2020.

1. Mazda CX-30 — $21,900

The Mazda CX-30 is a newcomer to this competitive segment and this rookie rightfully earns the top spot on this list. It has everything we love about Mazda MZDAY, +0.23%   SUVs in an affordable subcompact package. That means it delivers head-turning styling, a premium interior, and a fun-to-drive character that is uncommon in crossovers. It’s also quite comfortable for everything from running errands around town to highway cruising and its excellent safety scores make it a credible small family car. One of our very few gripes is that the infotainment controls have a bit of a learning curve. 


2. Honda HR-V — $20,820

The Honda HR-V

Honda

The Honda HR-V is one of the more practical entries in this segment with a very roomy and space-efficient interior. This crossover is one of the more family-friendly subcompact crossovers because of its strong safety rating and generous interior space for both passengers and cargo. The clever “Magic Seat” system allows you to customize the interior for optimal cargo space, passenger space, or any combination of the two. This Honda HMC, +0.48%   is also affordable and great on gas, but the sole engine option doesn’t have much muscle. 


3. Subaru Crosstrek — $22,145

The Subaru Crosstrek.

Subaru

The Subaru Crosstrek is both rugged and cute in a way that few competitors can imitate. The Crosstrek has some real off-road chops thanks to standard all-wheel drive on every trim, generous ground clearance, and available X-Mode. The Subaru FUJHY, +1.54%   Crosstrek also has great road manners, but enthusiasts may be underwhelmed by the so-so engine performance, although it’s quite good on gas. Speaking of gas, there’s a plug-in hybrid option that retains all of the Crosstrek’s off-road capability while saving a good amount of fuel. 


4. Hyundai Kona — $20,300

The Hyundai HYMTF, +4.65%   Kona is a small, stylish SUV with a lot going for it. On top of its head-turning good looks, it comes with generous standard technology like a seven-inch infotainment system, an upscale cabin, and confident handling. The base engine is good on gas, but we recommend upgrading to the more exciting available turbocharged engine if your budget allows it. The Kona has a lot of nice available features as you work your way up the model range like all-wheel drive, a locking center differential, and adaptive cruise control. 


Want a little luxury? Read: The year’s best small luxury SUVs

5. Hyundai Venue — $17,350

The Hyundai Venue.

Hyundai

Even smaller and more affordable than the Kona is the Hyundai Venue which is an all-new crossover for 2020. The Venue has just as much visual character as the Kona, but in a totally different way with its boxy design that reminds us of a more premium British marque. The diminutive Venue is good on gas, it’s easily maneuverable, and it has one of the most user-friendly infotainment systems in the business. This Hyundai is the most affordable subcompact SUV on this list and it’s definitely worth consideration for drivers looking for a great value on a new crossover, but something to keep in mind is a lack of an AWD option. 


6. Toyota C-HR — $21,295

The Toyota CHR

Toyota

The Toyota C-HR has a very funky look despite Toyota’s TM, +0.89%   conservative reputation and there’s nothing else on the road quite like it. However, that unusual profile means sacrificing some space in the back seat area and the cargo hold so it’s not the most practical crossover in this class. That said, it delivers a composed ride and handling and it’s pretty generous with standard technology and safety features. For 2020, the C-HR got a slightly revised look and standard Android Auto on every trim. 


Also see: Toyota has finally made a hybrid of its most popular car—is it different from a Prius?

7. Nissan Rogue Sport — $23,240

The Nissan Rogue

Nissan

If you’re looking for something on the bigger side of the subcompact class, the Nissan Rogue Sport is an SUV that’s small, but not too small. Cargo space is generous for this class and you get tons of standard features. The Nissan NSANY, -0.12%   Safety Shield 360 suite of driver assistance technologies is now standard for the 2020 model which includes automatic emergency braking with pedestrian detection, automatic rear braking, rear cross-traffic alert, blind-spot monitoring, and lane departure warning. The sole engine option is a little weak, but if performance isn’t a big priority for you, then the Rogue Sport is worth a look. 


8. Nissan Kicks — $18,870

The Nissan Kicks

Nissan

Slotted below the Rogue Sport in size and price is the Nissan Kicks. Like the Rogue Sport, the Kicks added some newly standard safety features for 2020 including forward collision warning, automatic emergency braking, and blind-spot monitoring plus newly available driver drowsiness monitoring. The Kicks not only has an attractive starting price, but you can go to the top of the model range and get a ton of cool features like a surround-view camera and Bose premium audio while still keeping the price reasonable. Like the Rogue Sport, the engine in the Kicks is a bit lacking and we wish there was an AWD option. 


9. Mazda CX-3 — $20,640

The Mazda CX-3

Mazda

The model range for the Mazda CX-3 is greatly simplified for 2020 offering just one trim with your choice of FWD or AWD. However, that’s not such a bad thing since it’s pretty well-appointed with standard features that include Android Auto and Apple AAPL, -1.31%   CarPlay plus the i-Activsense safety tech suite. The CX-3 is one of the more athletic options in this segment with a lively engine and agile handling. The interior is also nicer than you might expect at this price point making the CX-3 an affordable small crossover that feels more expensive than it is. Unfortunately, the rear seats and cargo area are a bit cramped.

10. Jeep Renegade — $22,375

Unsurprisingly, the Jeep Renegade is one of the most competent off-roaders in this segment. The Renegade has a distinct style that makes it stand out from its peers and if you go with the rugged Trailhawk 4×4 trim, you might be surprised by the feats it can pull off when the pavement ends. This SUV is good on the road too with a comfortable ride aided by one of the most intuitive infotainment systems you’ll find anywhere. For all of its character and off-road grit, we wish the Renegade offered more standard features and better fuel economy, but if it’s great if you’re looking for something a little adventurous. 


Related:5 important facts about car insurance no one ever tells you

11. Chevrolet Trax — $21,300

The Chevy Trax sits toward the bottom of our list not because it’s bad, but because it simply doesn’t have much that sets it apart from its tough competitors. The Trax has many of the same virtues that come with most subcompact SUVs like city-friendly maneuverability and affordable pricing, but the interior quality is subpar and the ride is a bit stiffer than we’d like. What is praiseworthy is the great infotainment system that’s been updated for 2020 and includes Android Auto, Apple CarPlay, and a Wi-Fi hot spot on every trim. 


12. Ford EcoSport — $19,995

The Ford EcoSport.

Ford

In much the same way its top domestic competitor from Chevy fails to stand out, there isn’t much that makes the Ford EcoSport easy to recommend when compared with class leaders. The EcoSport has an attractive base MSRP just under the $20k mark, but its value proposition is questionable since you don’t get a whole lot with the base trim. The ride is a bit firm and the engines are a bit noisy and this Ford F, +1.30%   is lacking in available safety technology. If you like the EcoSport, we recommend upgrading to the SE trim or higher so you get the great SYNC 3 infotainment system. 


13. Fiat 500X — $24,590

The Fiat 500X

Fiat

The Fiat 500X is mechanically identical to the Jeep Renegade but sits lower on this list because of its higher price tag and lack of a true off-road trim like the Renegade Trailhawk. Part of the reason the Fiat FCAU, +1.03%   is more expensive than the Jeep is that the 500X has standard AWD. The 500X isn’t lacking in style with a decidedly Euro look inside and out, but it’s lacking in interior space, the seats aren’t very comfortable, and fuel economy is just OK. If you like the 500X, you may want to consider a more affordable used model if you’re looking for more bang for your buck. 


Also see: 8 affordable new cars priced well below $20k

14. Mitsubishi Outlander Sport — $22,595

The Mitsubishi Outlander

Mitsubishi

The Mitsubishi Outlander Sport has some notable virtues like good cargo space and user-friendly infotainment system controls, but it doesn’t deliver on most of the things that are most important to drivers in the market for a subcompact crossover. The base engine is sluggish and noisy, the ride is firm, and the interior materials are unimpressive. The Outlander Sport adds an available 8-inch infotainment system for 2020, but that’s not quite enough to make this Mitsubishi MSBHF, +0.04%   a strong competitor in this popular segment. 

15. Fiat 500L — $22,500

The Fiat 500L is pretty roomy thanks to its boxy shape and it’s certainly unconventional, but it simply doesn’t have much going for it compared with the best subcompact SUVs of 2020. The engine is decent, but this Fiat is a bit awkward to drive with its firm ride and lack of steering feedback. Fuel economy is unimpressive and the cabin materials leave a bit to be desired. If you’re captivated by Fiat styling, the 500X with standard AWD (not available on the 500L) is generally a better and more modern crossover than the 500L.

This story originally ran on Autotrader.com.

Autotrader: A plug-in hybrid Jeep is coming. Check out the Wrangler 4xe

This post was originally published on this site

  • A plug-in hybrid (PHEV) Jeep?! Wait’ll you see the numbers.
  • By our calculations, the most powerful production Wrangler ever
  • 25 miles of pure electric range on a full charge
  • PHEV is still 100% Wrangler
  • We expect (and hope for) an under-$40,000 starting price
  • Arrives in the U.S. in early 2021

As Jeep commits to questing toward a smarter and greener world, it makes perfect sense that a plug-in hybrid (PHEV) version of its midsize Wrangler SUV would come along. What’s more interesting, however, is learning that the 2021 Jeep Wrangler 4xe gasoline-electric hybrid has been on the books essentially since Day One. The initial planning for the current Wrangler (all-new as a 2018 model) included a PHEV version. In fact, Jeep says it plans to release “electrified” versions of all its vehicles in the next few years.

The lead card in this new hand for Jeep is the Wrangler 4xe PHEV. The 4xe combines the near silence of plug-in-electric vehicle travel with the never-leave-you-stranded-as-long-as-you-can-get-to-a-gas-station confidence that a gasoline engine provides. Working together, this hybrid combination results in good power, strong fuel economy, and significantly fewer trips to the gas station if you can plug in to charge at home and/or work. As with all hybrids, other factors help keep the 4xe charged too, like the regenerative braking system, which captures the energy created as the Wrangler slows down and sends it to the battery pack.

What is the 2021 Jeep Wrangler 4xe?

Arriving early next year, the 5-passenger Wrangler 4xe is built on the 4-door Wrangler platform with space provided for a turbocharged 4-cylinder gasoline engine and 8-speed TorqueFlite automatic transmission, front and rear electric motors, and a massive battery pack to power the motors. The result is a Wrangler like no other, able to run in 2-wheel drive, 4-wheel-drive (4WD) high, 4WD low, and even 4WD Auto, and putting out a total of 375 horsepower at 5,250 rpm and 470 lb-ft of torque at 3,000 rpm.

Learn more: Everything you need to know about plug-in hybrids

The 2021 Jeep Wrangler 4xe comes in three trim levels — the basic Wrangler 4xe, the better-than-basic Wrangler Sahara, and the all-out off-road-ready Rubicon. All three share the same 4xe PHEV drivetrain, but different suspension setups. Also, the base 4xe and Sahara trims get 20-inch wheels, while the Rubicon uses 17-inchers, higher-profile tires, and a more robust 4×4 setup.

How does the Wrangler 4xe work?

If you’re looking for performance in your SUV, the new Wrangler 4xe will seduce both your practical commuter side and your enthusiast side before you even get it off-road. The Wrangler 4xe’s driver-selectable E Selec choices each contribute.

E Selec’s default mode is “Hybrid.” This brings the 4xe’s gasoline engine and the electric motors into play. Set to Hybrid mode, Jeep says the Wrangler 4xe can sprint (not a term often heard when describing acceleration from a 5,000-pound SUV) to 60 mph in 6.0 seconds. You’ll also enjoy a 400-mile driving range with a full tank of gas and a full charge.

On electric power alone — with E Selec in “Electric” mode — the 4xe boasts a range of 25 miles before the 2.0-liter engine kicks in to help. That’s excellent range for a plug-in SUV.

Check out: A first look at Toyota’s new RAV4 plug-in hybrid

E Selec’s third mode, “eSave,” relies mainly on the engine to keep the Wrangler 4xe moving and saves the battery charge for later use. More significant, however, is the “Battery Charge” choice on eSave mode’s menu. This feature allows an empty battery pack to become fully charged by the engine in about 2½ hours while traveling at about 55 mph.

Is the Wrangler 4xe just as off-road awesome as the non-PHEV Jeep Wrangler?

Without a doubt, the new Jeep Wrangler 4xe is still an all-pro Wrangler, it’s just got an electric charge port as well as a gas tank. It’s also got all of its Trail Rated SUV chops, generous approach and departure angles, rugged skidplates, and a 30-inch water-fording depth. Selec-Speed Control with Hill-Ascent and -Descent Control comes standard. Plus, there’s an added advantage to the linear, right-now response of an electric car, both on-road and off.

You might like: Which is better, the Ford Bronco or the Land Rover Defender?

Maximum towing capacity is 3,500 pounds. The 400-volt, 17-kWh lithium-ion battery pack nests cleanly under the second row with no compromise in the generous ground clearance, although some cargo capacity is lost. But there are still plenty of Easter eggs to be found.

Why should you consider the Jeep Wrangler 4xe?

If you’re shopping for a Jeep Wrangler, you owe it to yourself to look at a Wrangler 4xe. Not just because of the iconic Wrangler stance or the Electric Blue exterior accents (including the front and rear tow hooks) and Electric Blue 4xe graphics. That exclusive Electric Blue interior stitching looks great too, along with the Uconnect touch screen that displays infotainment as well as dedicated Wrangler 4xe screens to monitor power flow, regen braking, and scheduling of charge times.

What you owe yourself is the consideration of owning the most powerful production Wrangler that Jeep has ever built, while simultaneously enjoying the plug-in hybrid electric advantages of the 4xe.

How much is the Wrangler 4xe?

We expect 2021 Jeep Wrangler 4xe pricing to start at just under $40,000.

Also see: These 3 EVs are the lowest cost to own over 5 years

This story originally ran on Autotrader.com.