getty images – Hudson Berkshire Experience http://hudsonberkshireexperience.com/ Tue, 29 Mar 2022 10:20:30 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://hudsonberkshireexperience.com/wp-content/uploads/2021/05/cropped-icon-32x32.png getty images – Hudson Berkshire Experience http://hudsonberkshireexperience.com/ 32 32 2 post-pandemic real estate tips I would give to any newbie investor https://hudsonberkshireexperience.com/2-post-pandemic-real-estate-tips-i-would-give-to-any-newbie-investor/ Sat, 26 Feb 2022 12:15:00 +0000 https://hudsonberkshireexperience.com/2-post-pandemic-real-estate-tips-i-would-give-to-any-newbie-investor/

AAt this point, we’ve been dealing with the COVID-19 pandemic for about two years. And while it is certainly too early to say that we are in a post-pandemic world, it East fair to say things look different these days.

For one thing, the omicron push seems to have subsided, at least for now. Also, at this stage of the game, we have tools to fight against COVID-19. These include vaccines, therapies and a more reasonable supply of masks and tests.

As such, many people may enter a post-pandemic mindset. If that’s where you’re at and you’re also looking to get started in the world of real estate investing, here are some tips to keep in mind.

Image source: Getty Images.

1. If you buy income properties, have a backup plan

During the pandemic, many landlords took a financial hit when a federal plan was put in place that prevented them from evicting tenants who didn’t pay their rent. A large number of family landlords who did not have cash reserves had financial difficulties when they could not collect the rent.

Hopefully, we won’t experience another crisis as extreme as the COVID-19 pandemic. But you still don’t know when a change might come in and stop paying rent.

If a recession hits, for example, laws could be passed that offer tenants the kind of respite they got during the eviction moratorium. Therefore, it is important to ensure that you have an emergency source of income that is not limited to rent.

It is also important not to overwork yourself when buying income properties. Owing money on a series of mortgages could backfire even during normal times.

You might come across a random tenant who doesn’t pay and won’t leave, whether there’s a health or economic crisis. So, before you stock up on income properties, make sure you have a plan to meet your expenses in case your expected rental income stream runs out.

2. Stock up on recession-proof REITs

The pandemic has taught us that economic conditions can change on a whim. While the economy has largely recovered from the blow in 2020, things could have turned out very differently had vaccines not been rolled out so quickly.

That’s why it’s important to choose investments that are virtually recession proof. Healthcare REITs, or real estate investment trusts, are a good bet in this regard.

Even during the darkest economic times, there will always be a need for hospitals, skilled nursing facilities, and urgent care centers. That means putting money into healthcare REITs could give you some protection in case things get worse, whether or not in conjunction with a health crisis.

Remember that REITs tend to pay above-average dividends. And this income stream alone can help minimize losses to your portfolio if the stock market drops.

Learning from the past two years

Many people’s lives have changed during the pandemic – some for the better, some for the worse, and some for a bit of both. If you’re getting into real estate, it’s important to learn from the events of the past two years to set yourself up for success. And so, as you embark on your investing career, be sure to take these points to heart, because you never know what the future might hold.

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3 Ultra High Yielding Dividend Stocks Billionaires Can’t Stop Buying https://hudsonberkshireexperience.com/3-ultra-high-yielding-dividend-stocks-billionaires-cant-stop-buying/ Mon, 21 Feb 2022 10:51:00 +0000 https://hudsonberkshireexperience.com/3-ultra-high-yielding-dividend-stocks-billionaires-cant-stop-buying/

The new year has not lacked major current events. Federal Reserve meetings, inflation data, coronavirus vaccine trial results and updates on the Russian-Ukrainian conflict are just a few of the events rocking the stock market.

But what you may have missed last week was one of the most important data releases of the quarter. February 15 marked the deadline for fund managers with more than $100 million in assets under management to file Form 13F with the Securities and Exchange Commission. A 13F provides an under-the-hood look at the stocks some of Wall Street’s brightest minds were buying and selling over the past quarter.

After scouring the portfolios of some of Wall Street’s brightest billionaires, one trend stood out: their attraction to dividend-paying stocks. Specifically, billionaire fund managers couldn’t stop buying the following three ultra-high-income stocks.

Image source: Getty Images.

AT&T: 8.75% return

Billionaire’s first ultra-high-yield equity fund manager couldn’t stop buying in the fourth quarter is the telecommunications giant AT&T (NYSE:T).

Before we get into the AT&T discussion, I want to mention that a business reorganization (which I’ll talk about in a moment) will cut the company’s dividend by more than half by mid-year. While it remains a high-yield company with a yield above 4%, its tenure as an ultra-high-yield income stock is wearing thin.

Among billionaire investors, Jim Simons of Renaissance Technologies and Jeff Yass of Susquehanna International kept charging AT&T in the fourth quarter. Renaissance added nearly 18.2 million shares and made AT&T its 26th largest holding. During that time, Susquehanna bought over 11.1 million shares.

While the peak of growth for AT&T is long gone, the company offers two very clear upside catalysts over the next two years. For starters, there’s the ongoing rollout of 5G wireless infrastructure. It’s been a decade since wireless download speeds improved dramatically, which should lead to a persistent cycle of device replacement for consumers and businesses. Since data consumption generates the juiciest margins in AT&T’s wireless segment, 5G is its golden ticket to steady organic growth.

The other major catalyst, and the “business reorganization” I alluded to earlier, is the upcoming spin-off of the WarnerMedia content arm, and its merger with Discovery. This new media entity will have approximately 94 million pro forma streaming subscribers and should be able to reduce its annual operating expenses by more than $3 billion. The spin-off from WarnerMedia — AT&T investors will have a stake in this new media entity — will also allow AT&T to lower its payouts and work on debt reduction.

At just 8 times 2022 forecast earnings, AT&T is about as cheap as it’s ever been.

Two businessmen shake hands, one holding a miniature house in his left hand.

Image source: Getty Images.

AGNC Investment Corp. : yield of 10.66%

Another ultra-high yielding stock that caught the attention of billionaire fund managers in the fourth quarter is the mortgage real estate investment trust (REIT). AGNC Investment Corp. (NASDAQ:AGNC). AGNC has averaged double digit returns in 12 of the past 13 years.

During the fourth quarter, Ken Griffin of Citadel Advisors and the aforementioned Jeff Yass bought AGNC. Griffin more than tripled Citadel’s stake in the company by buying over 396,000 shares, while Susquehanna increased its position from just over 112,000 shares to over 294,000.

While AGNC’s securities investment purchases can be complex, Mortgage REIT’s operating model is simple. Companies like AGNC seek to borrow at low short-term rates and use that capital to buy assets with higher long-term yields, such as mortgage-backed securities (MBS). The average return on MBS and other assets held minus the average borrowing rate equals the firm’s net interest margin (NIM). The higher the NIM, the more profitable the AGNC can become.

The biggest concern for mortgage REITs right now is the flattening of the yield curve between 2-year and 10-year US Treasuries. As the yields between these notes decline, companies like AGNC typically see their book value drop and their NIM tighten.

However – and this is a fat however – higher lending rates, which are most certainly on the horizon, should also help increase the returns AGNC receives from the MBS it purchases. Over time, the MBS he buys will expand his NIM.

In addition, the company purchases almost exclusively agency-guaranteed securities. An agency asset is guaranteed by the federal government in the event of default. While this protection reduces the return AGNC receives on the MBS it purchases, it also allows the company to deploy leverage to increase its profits.

With AGNC Investment Corp. trading well below its book value, it could be a theft.

A person using their phone's speakerphone while walking down a city street.

Image source: Getty Images.

Mobile TeleSystems: 13.37% efficiency

The third Russian telecommunications company Mobile telesystems (NYSE:MBT).

MTS, as the company is more commonly known, has the highest return on this list at over 13%. But keep in mind that his semi-annual payment is not fixed. Rather, the company’s operating results dictate what is ultimately paid out to shareholders. Nevertheless, MTS has returned around 9% (or more) for most of the last five years.

The big buyers last quarter were Israel Englander of Millennium Management and Larry Fink’s black rock. Millennium doubled its existing position by buying nearly 1.4 million shares, while BlackRock added nearly 641,000 shares to its stake, which now stands at 21.8 million shares.

Mobile TeleSystems’ daily bread continues to be its telecommunications segment. Even though mobile saturation rates are high across Russia, MTS stands to benefit from the deployment of 5G infrastructure in major cities and the continued expansion of 4G into the vast rural areas of the country. A smartphone replacement cycle can boost MTS’ retail segment, as well as its data-driven wireless segment.

But what makes MTS so intriguing are the company’s many new verticals. It moved into banking, cloud computing, and streaming, to name a few new revenue channels. In the first nine months of 2021, these new verticals saw sales growth of 24% over the prior year period. These fast-growing verticals have the potential to increase MTS’s organic growth rate and significantly reduce churn by keeping customers within its ecosystem of products and services.

In line with the theme, Mobile TeleSystems is inexpensive at around 8 times Wall Street consensus earnings for 2022.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.

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Top 10 things to do in Berkshire this semester https://hudsonberkshireexperience.com/top-10-things-to-do-in-berkshire-this-semester/ Fri, 18 Feb 2022 12:02:27 +0000 https://hudsonberkshireexperience.com/top-10-things-to-do-in-berkshire-this-semester/

Windsor Castle. Image: Steve Parsons/PA Wire

Half term is almost here, so InYourArea has come up with some ideas to keep the kids entertained this week.

Berkshire has plenty of fun activities for families, from parks to animal attractions and more, all ready to be explored.

1. Windsor Castle

Or: Windsor, Berkshire, SL4 1NJ.

No trip to Windsor could be complete without a visit to the incredible Windsor Castle, the family home of British kings and queens for over 1,000 years. The size of the castle (5.3 hectares/13 acres) is breathtaking, it is the largest and oldest occupied castle in the world and is where Her Majesty The Queen chooses to spend most of her private weekends.

Windsor Castle is open to the public five days a week, remaining closed on Tuesdays and Wednesdays. Tickets must be reserved in advance. You can even schedule your visit when she is in residence. Look at the flag flying on the round tower of the castle; if it’s the Royal Standard, the Queen will be there too.

One of the lakes in Dinton Pastures Country Park. Picture: Berkshire Live.

2. Dinton Pastures National Park

Or: Davis Street, Hurst, Wokingham, Berkshire.

Dinton Pastures Country Park is an award-winning play space that offers educational events and activities. There’s something for everyone, no matter how active or relaxed you want to be. There are 450 acres of lakes, meadows, trails and woods, a fishery, water sports and conservation lakes.

Children will enjoy the adventure play park with swings, slides and climbing frame in a clean and confined area while the Dragonfly Café is the perfect place to rest their feet with some tasty food and a hot drink.

Bucklebury Farm Park. Image: Berkshire Live/Grahame Larter.

3. Bucklebury Farm Park

Or: Pease Hill, Reading, Berkshire, RG7 6RR.

This adventure farm park is a 77 acre working farm in the Pang Valley that has plenty of animals to see including Berkshire pigs, pygmy goats, Shetland ponies, reindeer, donkeys, cattle, llamas, wild boars and poultry.

There’s also a red deer park and Bob’s Kid’s Barn which has small animals for petting sessions, as well as indoor and outdoor play areas for children. Other things to do include a walk through the woodland nature trails or you can climb to Tom’s Tower lookout to see across the deer park.

Bowling. Image: Ian Forsyth/Getty Images.

4. Hollywood Bowl Bracknell

Or: The Point, Skimped Hill Lane, Bracknell, Berkshire.

If you’re in the mood for a game of 10-pin bowling with the family, there’s no better place than Hollywood Bowl Bracknell. Do not hesitate to take the children with you, bowling is as much fun for adults as for young players.

The Bracknell site has 28 bowling alleys where the whole family can compete. young children may need help, so the lanes are equipped with child-friendly features such as ramps and bumps. Kids will knock them over before you know it.

Aquatic world of coral reefs. Image: Surrey Announcer/Steve Porter.

5. Aquatic world of coral reefs

Or: Nine Mile Ride, Bracknell, Berkshire.

A major renovation has transformed this water park with many wild rides and flumes. Try the Cannon, a 67-meter high-speed drop you’ll be spitting down like a cannonball, and the Storm Chaser where pirates in training can try their luck on the stormy waves.

Families with young children will head to the Little Corals Toddler Pools to gently play in the shallow waters or swing under a pirate ship equipped with shooting cannons.

The Living Rainforest. Image: The Living Rainforest.

6. The Living Rainforest

Or: Hampstead Norreys, Thatcham, Berkshire.

Did you know that the sleepy village of Hampstead Norreys in Berkshire has its own rainforest? The living rainforest has over 700 species of plants and animals including sloths, reptiles, monkeys, birds and more.

This is an educational charity that aims to teach visitors about rainforests, the animals that live there, and how our daily decisions affect Earth’s oldest living ecosystems. The rainforest is climate controlled to make it as close to reality as possible.

Great Windsor Park. Image: BerkshireLive/Grahame Larter.

7. Windsor Great Park

Or: The Great Park, Windsor, Berkshire, SL4 2HT.

South of Windsor is The Great Park which covers some 14,000 acres including 8,000 acres of forest. Windsor Great Park is the only royal park managed by the Crown Estate Commissioners and it is their duty to maintain its unique character.

Horse trails and incredible views are also very present. There are several public access points around the perimeter of the park and one of the main ones is at Wick Lane, Englefield Green, where you can park for free for 90 minutes.

STOCK IMAGE: Unsplash/Kazuo ota.

8. Mad Hatters Pottery Painting Coffee

Or: 114 School Road, Reading, Berkshire, RG31 5AX.

An independent café, Mad Hatters Pottery Painting is Berkshire’s first pottery painting café, offering a separate café space from the pottery studio. It’s open seven days a week and serves delicious food and drinks with optional pottery painting.

Painting your own pottery is a great way to relax, have fun, and explore your creative side while creating a keepsake or creating a keepsake with your family and friends.

Go Ape. Image: Trinity Mirror Southern/Steve Smyth.

9. Go Monkey

Or: Nine Mile Ride, Bracknell, Berkshire, RG12 7QW.

There is plenty of fun to be had at Go Ape Bracknell with four adventures to choose from -Treetop Challenge, Treetop Adventure and Treetop Adventure Plus as well as Forest Segway.

Forest views are covered from ground level to tree level. You can climb around Swinley Forest on the Challenge Course and prepare for two to three hours of tree-to-tree obstacles designed to get your adrenaline pumping and your heart pumping.

Museum of English Country Life. Image: Read/Peter Bloodworth.

10. Museum of English Country Life

Or: 6 Redlands Road, Reading, Berkshire, RG1 5EX.

The Museum of English Rural Life (MERL) is England’s largest museum devoted to agriculture, food, crafts, rural life and rural issues. The REMF contains a range of items that tell an important part of England’s history. The museum brings the collection of objects, archives, photographs and books to life in nine galleries.

Interactive and immersive screens explore issues of identity, environment, technology, culture and health. Whatever your relationship with the countryside and rural life, you will find objects that fascinate and inspire you.

Get all the latest news, updates, things to do and more from dedicated Berkshire InYourArea Feed

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Seritage Growth still owes Berkshire Hathaway $1.44 billion https://hudsonberkshireexperience.com/seritage-growth-still-owes-berkshire-hathaway-1-44-billion/ Thu, 17 Feb 2022 13:10:00 +0000 https://hudsonberkshireexperience.com/seritage-growth-still-owes-berkshire-hathaway-1-44-billion/

Serage growth properties (NYSE: SRG) began life when it was spun off from Sears Holdings, a now-bankrupt retailer that owns iconic Sears and Kmart brands. It was a rough start that only got worse. And as the company grows stronger, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) still has a claim of $1.44 billion on the real estate investment trust (REIT).

What a start!

Sears and Kmart were struggling to resuscitate their businesses, fix their merchandise lineup, and attract customers. To free up cash for this effort, Sears Holdings created Seritage Growth Properties, which purchased a collection of stores from the retailer.

It’s not a strange start at all, and there are plenty of REITs that were formed in the same way. Four cornersfor example, was derived from Dard Restaurants not so long ago.

Image source: Getty Images.

That said, there is a notable discrepancy here. Darden is a reasonably strong restaurant operator, so even if Four Corners wants to diversify its business, there’s no particular rush for it to do so. In fact, Darden brands still make up around 60% of its portfolio. Olive Garden alone represents 45% of the portfolio, but it is a strong brand. Four Corners largely buys new assets to increase diversification.

Sears and Kmart, on the other hand, were in deep trouble and were closing stores when Seritage bought the assets. So, from the start, Seritage’s goal was to take over the big empty boxes from Sears and Kmart, refurbish them, and lease them to new tenants at (hopefully) higher rates.

Redevelopment is an expensive and time-consuming undertaking. While the structures were repaired, Seritage collected no rent even though the money for the redevelopment came out. At first it was kind of a race to get away from Sears and Kmart before Sears Holdings imploded. Seritage lost, with the retailer stumbling long before Seritage pulled away completely.

A hand

That said, in 2018 Warren Buffett and Berkshire Hathaway saw the value potential in Seritage’s portfolio and stepped in to help with a loan that could help the REIT bridge the gap between its redevelopment costs and improving its performance. income once he could rent out his updated retail space. It was a welcome help, given that a few months later Sears Holdings declared bankruptcy.

Things were moving forward until the coronavirus hit in 2020 and set the REIT back. Retail was one of the hardest hit real estate sectors at the start of the pandemic.

Things started to look up in 2021, and in early 2022 Seritage was able to repay $160 million on the term loan provided by Berkshire Hathaway. That sounds like a lot, but the term loan had a balance of $1.6 billion. So, he still has $1.44 billion left and little time to pay it back, given that it matures in July 2023.

But the two companies have agreed to an extension until July 2025. However, Seritage must repay the $800 million loan for it to take effect. So Seritage really has until July 2023 to pay another $640 million, which seems pretty reasonable. In fact, that’s a lot more reasonable than $1.44 billion.

For Berkshire Hathaway, which boasts a massive market capitalization of $707 billion, this is actually a very small deal, so it can afford to be patient. That’s a good thing, because without this loan, Seritage, with a market capitalization of $500 million, could have faced a life-or-death situation when Sears Holdings sought court protection.

SSR Chart

SSR data by YCharts

But there’s more good news here, since Seritage is completely out of its former parent. In the third quarter of 2021, it only had 23% of its rent locked in “signed not occupied” (SNO) contracts.

As these come into service and the costs associated with redevelopment of the assets decrease, Seritage’s business should begin to take a turn. It’s not just out of the woods, but as long as Berkshire Hathaway is willing to work with Seritage, there’s still potential for a turnaround here.

Not for the faint of heart

Seritage, from day one, has been a play. The road he has traveled since his beginnings has not been easy, with the bankruptcy of Sears Holdings and the pandemic representing two strong headwinds. Now, the next big issue to watch for investors in special situations seems to be the repayment of the $800 million loan. If the REIT manages to meet the conditions necessary to extend Berkshire Hathaway’s loan, the future looks much brighter.

10 Stocks We Like Better Than Seritage Growth Properties (Class A)
When our award-winning team of analysts have stock advice, it can pay to listen. After all, the newsletter they’ve been putting out for over a decade, Motley Fool Equity Advisortripled the market.*

They just revealed what they think are the ten best stocks investors can buy right now…and Seritage Growth Properties (Class A) wasn’t one of them! That’s right – they think these 10 stocks are even better buys.

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* Portfolio Advisor Returns as of January 20, 2022

Reuben Gregg Brewer has no position in the stocks mentioned. The Motley Fool owns and recommends Berkshire Hathaway (B shares). The Motley Fool recommends Seritage Growth Properties (Class A) and recommends the following options: long calls of $200 in January 2023 on Berkshire Hathaway (B shares), short longs of $200 in January 2023 on Berkshire Hathaway (B shares) and calls short $265 in January 2023 on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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3 TSX Dividend Stocks Hit 52-Week Highs https://hudsonberkshireexperience.com/3-tsx-dividend-stocks-hit-52-week-highs/ Fri, 11 Feb 2022 15:00:00 +0000 https://hudsonberkshireexperience.com/3-tsx-dividend-stocks-hit-52-week-highs/

Image source: Getty Images

Investors who have these three TSX dividend-paying stocks in their investment portfolios are likely to be happy campers. They recently hit 52-week highs! Should we buy them, keep them or sell them? Here are some insights from analysts to help you in your decision making.

Fairfax Financial Holdings

Fairfax Financial Holdings (TSX:FFH) is sometimes called a smaller version of Berkshire Hathaway. Like Berkshire, it is a holding company that has an insurance business. FFH also aims for a high rate of return on invested capital to create long-term shareholder value.

The beta of the stock roughly matches the beta of the market. Like most stocks in the market, it took a hit during the pandemic crash. However, it has roughly doubled since the bottom of the stock market crash in early 2020. Over the past year, its returns have also been comparable to those of Berkshire Hathaway. FFH stock is currently yielding around 1.9%.

FFH Total Return Level Chart

FFH and BRK.B Total Return Level Data by YCharts

John O’Connell’s comment on FFH in October 2021 was not kind, however:

“Prem Watsa engages in market timing, unlike Warren Buffett. Fairfax is a black box in what it owns. Tough business. Stuck in the mud for a while. If you want to look for good capital allocators in the [property and casualty insurance] company, look at BRK.B, which he owns.

John O’Connell, Chairman and CEO of Davis Rea

Royal Bank Stocks

Quality companies are meant to recover from market corrections. Stocks of major Canadian banks made a big comeback after the pandemic crash. As a leading bank with leading positions in a range of financial services in Canada, Royal Bank of Canada (TSX:RY)(NYSE:RY) is no exception.

It has appreciated about 120% since the bottom of the stock market crash and now has the largest market capitalization of the major Canadian banks. Its market capitalization is $208 billion.

Over the past 52 weeks, the stock dividend has returned almost 43%! Bank stocks have long been a staple in dividend portfolios. Currently, it offers a respectable yield of 3.3%.

RY Total Return Level Chart

RY Total Yield Level Data by YCharts

Here are David Driscoll’s comments on RBC stocks this month:

Rising interest rates will improve net interest margins (the spread between mortgages issued and deposits received). Dividend increases have taken place across the industry. Well-diversified company with operations in the United States and internationally. Avoid buying too many bank stocks as this exposes investors to sector risk.

David Driscoll, President and CEO of Liberty International

Brookfield Infrastructure

While Royal Bank shares may be staple banking stocks for many, Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) could be a core utility holding company. Since BIP was separated from Brookfield Asset Managementit increased its cash distribution every year for more than a decade.

Based on the way he runs his business, investors can expect more dividend increases for many decades to come. Its cash flow is sustainable – around 90% is regulated and contractual and 70% is indexed to inflation. Currently, it gives about 3.5%.

Here is a comment on Varun Anand’s utility as of November 2021:

“A diversified large-cap infrastructure play, led by one of the top asset managers [Brookfield Asset Management]. Excellent construction work on a global scale. Better ways to play infrastructure by owning individual names versus a conglomerate. Good candidate if you want to sleep at night and collect the dividend.

Varun Anand, Vice President and Senior Portfolio Manager at Starlight Capital

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This is the type of mortgage that Warren Buffett recommends https://hudsonberkshireexperience.com/this-is-the-type-of-mortgage-that-warren-buffett-recommends/ Sun, 23 Jan 2022 13:00:24 +0000 https://hudsonberkshireexperience.com/this-is-the-type-of-mortgage-that-warren-buffett-recommends/

Image source: Getty Images

Should you listen to the billionaire finance enthusiast about your home loan?


Key points

  • Buffett recommends taking out a 30-year mortgage.
  • Buffett thinks a 30-year mortgage is the “best tool in the world.”
  • With a 30-year mortgage, banks assume the risk of higher interest rates.

Chances are you’ve heard of Warren Buffett. He is a billionaire, a world-renowned investor and a well-known financial expert who has provided a wealth of financial advice.

Although Buffett has plenty of investment advice to pay attention to, given that he has amassed a fortune through strategic investing, he also has other financial advice. Specifically, Buffett recommended a particular type of home loan for people wanting to buy their own property. Here is what it is.

It’s Buffett’s favorite mortgage option

Buffett believes home ownership is a solid investment for individuals and families who intend to stay in one place for many years. And the investment expert said one of the main reasons homeownership is such a great investment is the 30-year mortgage.

Buffett called the 30-year mortgage “the best instrument in the world because if you mess it up and rates go up to 2%, which I don’t think they will, you pay it back,” he said. he declares. “It’s a one-sided renegotiation. I mean, it’s an incredibly attractive instrument for the owner and you have a one-sided bet.”

Essentially, this means that a 30-year mortgage works well for homeowners because they get a low-rate loan while the bank takes on the risk of rising interest rates. And if interest rates continue to fall, homeowners can simply refinance to a new loan with an even lower rate and pay off their existing debt. On the other hand, if rates go up, they can continue to pay at the low rate they got (assuming they got a fixed rate loan) and their principal and interest payments won’t become more expensive over time.

Buffett himself got a 30-year mortgage when he bought his Laguna Beach vacation home in 1971, and he said he borrowed most of the $150,000 price tag and didn’t have than about $30,000 of equity.

Here’s why Buffett is right about the best type of mortgage

Buffett’s advice on mortgages is perfect. As he pointed out, mortgage rates are affordable debt that borrowers can easily renegotiate if they need to.

But there’s an even better reason to go with a 30-year loan, besides the fact that it puts all the risk of a rate hike on the lender: you can do other things with your money while borrowing the most of the cost of your home to the bank.

As Buffett explained, he only invested a small amount of money on his home because he “thought I could probably do better with the money than make an equity purchase of it. the House”. He ended up buying shares of Berkshire Hathaway with her, which are now worth $750 million.

While the typical owner probably won’t earn as much on their investments, the same rule still applies. Buyers can probably get a better return by taking out a 30-year mortgage to cover most of their home’s costs, then investing all the extra money they could have put on the house (or they might have paid higher monthly payments if they had opted for a shorter loan term).

If you’re buying your own property, consider following Buffett’s advice, putting a reasonable down payment on your home, and opting for a 30-year loan that leaves you enough money for other investments.

A Historic Opportunity to Save Potentially Thousands of Dollars on Your Mortgage

Chances are interest rates won’t stay at multi-decade lows much longer. That’s why it’s crucial to act today, whether you want to refinance and lower your mortgage payments or are ready to pull the trigger on buying a new home.

Ascent’s in-house mortgage expert recommends this company find a low rate – and in fact, he’s used them himself to refi (twice!). Click here to learn more and see your rate. While this does not influence our product opinions, we do receive compensation from partners whose offers appear here. We are by your side, always. See The Ascent’s full announcer disclosure here.

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Here’s why Warren Buffett is right and Dave Ramsey is wrong about mortgages https://hudsonberkshireexperience.com/heres-why-warren-buffett-is-right-and-dave-ramsey-is-wrong-about-mortgages/ Sun, 09 Jan 2022 11:32:19 +0000 https://hudsonberkshireexperience.com/heres-why-warren-buffett-is-right-and-dave-ramsey-is-wrong-about-mortgages/

Image source: Getty Images

The decisions you make about a mortgage could have a profound impact on your finances. If you’re borrowing to buy a home, chances are your mortgage will be your biggest monthly payment and the biggest debt you’ll incur in your lifetime. You also agree to make payments for a long time.

This is why it can be frustrating to see a lot of conflicting mortgage advice.

Warren Buffett and Dave Ramsey disagree on mortgages

Some financial experts, like Dave Ramsey, are urging people to take the smallest loan possible for the shortest time possible – or even avoid borrowing altogether and pay cash for a house.

Others, however, take the opposite approach. In fact, billionaire investor Warren Buffett called a 30-year mortgage “the world’s best instrument.” He personally took out a 30-year mortgage when he bought his home, although he could easily have avoided doing so, and advises most homebuyers to do the same. Here’s why he’s right.

Buffett’s approach to mortgages is better than Ramsey’s

Buffett’s mortgage advice makes a lot more sense than Ramsey’s. That’s because Buffett fully understands that there’s an opportunity cost associated with paying cash for a house – or even taking out a short-term mortgage with higher monthly payments. Ramsey seems to ignore this fact when he warns buyers to avoid a 30-year mortgage, opting instead for a shorter repayment term with higher monthly payments or no loan at all.

When Buffett bought his house for $ 150,000 in 1971, he indicated that he put about $ 30,000 on the property and borrowed the rest. The reason: “I thought I could probably do better with the money than making an entire house purchase. “

Buffett ended up buying Berkshire Hathaway shares with the money he could have used to buy the house. As a result, he ended up turning the $ 110,000 or $ 120,000 he allegedly paid in cash for the house into $ 750 million because Berkshire shares rose in value so much.

You don’t have to be Buffett to get great feedback

Now, most people are unlikely to see the kind of return on investment Buffett made by buying Berkshire stocks. But it’s safe to assume that most people could get a better return on investing than paying cash for a house, even if they aren’t expert investors. Investing in an S&P 500 index fund could produce average annual returns of around 10% over time, which is far higher even than an expensive 4-5% mortgage.

By locking your money in a house, as Ramsey suggests, you are missing out on the chance to do other things with it that could have a bigger impact on your equity. It’s true whether you’re making a large down payment, paying cash for a house, or opting for a 15-year loan with much higher monthly payments.

And, as Buffett points out, you also have the option of making your mortgage even cheaper by refinancing it if rates drop. “It’s a one-sided renegotiation. It’s an incredibly attractive instrument for the owner, and you’ve got a one-sided bet.”

For all of these reasons, you should listen to Buffett rather than Ramsey. If you are buying a home, a 30 year mortgage is the best way to go.

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We strongly believe in the Golden Rule, which is why the editorial opinions are our own and have not been previously reviewed, endorsed or endorsed by the included advertisers. The Ascent does not cover all the offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts. Christy Bieber has no position in the stocks mentioned. The Motley Fool owns and recommends Berkshire Hathaway (B shares). The Motley Fool recommends the following options: $ 200 long calls in January 2023 on Berkshire Hathaway (B shares), $ 200 short buys in January 2023 on Berkshire Hathaway (B shares), and $ 265 short calls in January 2023 on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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America’s Top 4 Financial Resolutions For 2022 – And How To Achieve Them https://hudsonberkshireexperience.com/americas-top-4-financial-resolutions-for-2022-and-how-to-achieve-them/ Wed, 05 Jan 2022 11:00:11 +0000 https://hudsonberkshireexperience.com/americas-top-4-financial-resolutions-for-2022-and-how-to-achieve-them/

Image source: Getty Images

The practice of making New Year’s resolutions has been around for a long time, and it’s a great way for people to set different goals and motivate themselves to achieve them.

You might have a number of goals in mind for 2022, like getting more exercise, being in more contact with your friends, or finally using your kitchen instead of ordering take out all the time. But it’s also helpful to make financial resolutions specific to this time of year. Here are America’s most popular financial resolutions for 2022, according to a recent Principal poll.

1. Spend less money

It’s no surprise that spending less is at the top of the list of resolutions in this survey. Spending less money could be your ticket to achieving a host of goals, from buying a home to paying off the balances you’ve carried on your credit cards.

If you’re truly invested in spending less, set a budget to follow. This way, you’ll see how much you can afford to spend on different spending categories, and you’ll also be able to more easily identify areas where you can spend less.

2. Put more money in savings

The pandemic has taught us (the hard way) that it is important to have a decent amount of cash reserves. In fact, it’s a great idea to have enough money in your savings account to pay for three to six months of essential living expenses. This type of emergency fund should cover you in the event of job loss or expensive bills for medical care or home repairs. Or, you might need it for some random car repairs.

The point is, you never know what life might throw at you. And having more money in savings could help you not only achieve different goals, but also help you avoid getting into debt when unforeseen expenses increase.

3. Create a will, trust or estate plan

You don’t have to be rich to have a will in place, and it’s not something you can avoid doing just because you don’t have any dependents. Without a will, you have no say in what happens to your assets after your death, so it pays to have this document in place.

In addition, if you want to secure the future of your family, it pays to establish an estate plan, and meeting with a lawyer could get the ball rolling. Some lawyers charge a fixed fee for preparing a will and developing an estate plan, although the amount you pay may depend on the complexity of your financial situation. It’s a good idea to schedule this meeting for the peace of mind it might give you.

4. Meet a finance professional

There is absolutely no shame in going to a financial advisor whether you are new to the workforce or about to retire and want some advice on how to plan for your retirement years. retirement. You also don’t have to be rich to benefit from working with a financial professional.

Quite the contrary, an advisor can help you get the most out of your income and assets, no matter how small they are now. A financial professional can also help you set goals and develop a plan to achieve them.

Your financial resolutions may seem different from the ones above. If you have a personal loan balance, for example, your primary goal may be to lose it in 2022. Or, you may have a goal of increasing your credit score or putting more money into your IRA or 401 (k) ( k). No matter what you decide to do in the New Year, it helps to put those goals in writing. Having this booster could really help keep you on track and give you something to be proud of this time next year.

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We strongly believe in the Golden Rule, which is why the editorial opinions are our own and have not been previously reviewed, endorsed or endorsed by the included advertisers. The Ascent does not cover all the offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Applying for Social Security at 70 will help you manage these 3 retirement expenses https://hudsonberkshireexperience.com/applying-for-social-security-at-70-will-help-you-manage-these-3-retirement-expenses/ Tue, 04 Jan 2022 10:04:00 +0000 https://hudsonberkshireexperience.com/applying-for-social-security-at-70-will-help-you-manage-these-3-retirement-expenses/

The decision to join Social Security is not to be taken lightly. This is because your deposit age will dictate how much money you will ultimately collect each month.

If you apply for social security at your full retirement age, or FRA, you will receive exactly the monthly benefits to which your income entitles you. Filing claims before the FRA will result in a reduction, while delaying them beyond the FRA will result in a boost – and potentially generous.

In fact, if you wait until age 70 to claim Social Security, when deferred retirement credits stop accumulating, you’ll increase your benefits from 24% to 32%, depending on your FRA. And that increase will stay in effect for the rest of your life. This, in turn, could make it easier to cover these expensive retirement expenses.

Image source: Getty Images.

1. Housing

Many people retire with their mortgage already paid off. Despite this, many seniors struggle to keep up with the cost of home ownership. This is because expenses like property taxes, insurance and maintenance never go away.

Plus, as homes get older, they tend to need more repairs. These can be expensive, especially if you are no longer able to easily do them on your own. A higher monthly social security benefit could lower your housing costs. And a more robust perk could also mean the difference between being able to stay in your home and having to downsize.

2. Owning a car

If you live in an area without public transportation, you may need a personal car in retirement. But you might have to pay a lot for it.

AAA estimates that the average cost to own a vehicle is $ 805.50 per month. If you’re worried that a car will put a strain on your nest egg, then delaying your Social Security declaration to receive a higher benefit could really help in this regard.

3. Health care

It is estimated that an opposite-sex couple aged 65 on average will now spend $ 300,000 on health care throughout retirement, according to Fidelity. Reading between the lines, if you start your retirement with known health issues or start having issues as you get older, your bills could end up being even higher.

If you don’t have money earmarked for medical bills in a health savings account, it’s definitely worth considering delaying your Social Security application. A higher monthly benefit could make it easier to process your health care bills.

An increase in income could be a lifeline

Many seniors retire expecting to spend far less on living expenses than they did when they worked, only to find that their bills are largely the same. If you have the option of delaying your Social Security declaration until age 70, it might be beneficial to just sit back and wait to register. Having a higher guaranteed monthly benefit could save you a world of financial stress as a senior – and also allow you to enjoy the freedom that retirement has to offer.

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The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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See how much these iconic Christmas houses from film and TV are worth today https://hudsonberkshireexperience.com/see-how-much-these-iconic-christmas-houses-from-film-and-tv-are-worth-today/ Wed, 22 Dec 2021 18:05:00 +0000 https://hudsonberkshireexperience.com/see-how-much-these-iconic-christmas-houses-from-film-and-tv-are-worth-today/

The house plays a central role around Christmas time, and movies and TV shows are sure to be featured hot andwelcoming homes at the center of their stories.

Corn How many would these famous houses to bevalue in today’s real estate market?

The most expensive iconic Christmas house is the one and only estate of Highclere Castle (pictured above), home to the spectacular Crawley family of Downton Abbey.

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Located in the heart of Berkshire, it is today estimated to have a market value of £ 137million.

In recent years, Sherlock Holmes has become more and more associated with the Christmas period, and her iconic home at 221b Baker Street in central London has a current market value of £ 4.4million, while Absolutely Fabulous Edina Monsoon lives in a townhouse on Holland Park Avenue in London which is worth around £ 3.3million.

Tourists line up outside the former home of the fictional character Sherlock Holmes in London, England. (Photo by Dan Kitwood / Getty Images)

Perhaps the most iconic Christmas house of all is the McCallister Residence at Home Alone. Located on the outskirts of Chicago, it’s estimated to be worth £ 2.3million.

But not at all our best known and loved cinema and television Christmas houses are the reserve of millionaires.

Some of our favorite party families live in much more humble abodes, including Stacey and Gwen West of beloved Gavin and Stacey.

Their home on Trinity Street in Wales’s Barry is currently worth £ 229,000, while the Dursley and Young Harry Potter’s House, located at 4 Privet Drive in Bracknell, is valued at just under £ 400,000.

The house where Harry Potter lived in the movie “Harry Potter and the Philosopher’s Stone”. Featured in the film as 4 Privet Drive, Little Whingeing, Surrey, the real address is Picket Close, Bracknell. (Photo by Warren Little / Getty Images)

Other iconic Christmas homes include James Bond’s family home, Skyfall Lodge (£ 2million); Buddy’s Dad’s Manhattan Apartment to Elf (£ 1.2million); Bridget Jones’s Borough Market flat (£ 1.2million); The bachelor pad of Will Freeman (Hugh Grant) in About A Boy (£ 949,000); The chalet of Iris (Kate Winslet) in The Holiday (£ 675,000); and Del Boy’s apartment at Nelson Mandela House, Peckham (£ 513,000).

Is Skyfall your favorite Bond movie? Here is a reminder of the 25 …

Adam Kumani, CEO and co-founder of the real estate portal Move Streets, who conducted the research, said:“While you would expect a house as impressive as the one featured in Home Alone to set you back a bit in today’s market, there is no doubt that Del Boy would be surprised to see his Peckham apartment approaching half a million. of books.

At the rate at which the UK housing market is changing, who knows, maybe this time around next year they could be millionaires.

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