Chase Sapphire Reserve Card Review: 50k Points Worth $750 in Travel, $300 Annual Travel Credit, $550 Annual Fee, New Lyft/DoorDash Perks

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

Updated with new annual fee and perks list. Chase has updated their “ultra-premium” credit card, the Chase Sapphire Reserve Card, which has headline features of Visa Infinite benefits, 50,000 Ultimate Rewards points sign-up bonus, $300 annual travel credit, 3X points on travel and dining, and a $550 annual fee. Here is the long list of perks:

  • 50,000 Bonus Ultimate Rewards points after you spend $4,000 on purchases in the first 3 months. That can be redeemed for $750 of airfare, hotels, and other travel through Chase Ultimate Rewards.
  • $300 annual travel credit. Every year, the card will rebate you back up to $300 in travel purchases such as airfare and hotel nights charged on your card.
  • $100 statement credit towards Global Entry or TSA PreCheck.
  • Priority Pass Select membership. Provides free access to 1,000+ airport lounges in over 400 cities worldwide.
  • 3X points per $1 spent on travel & dining worldwide. The 3X points on travel kick in immediately after earning your $300 travel credit. 1 point per $1 spent on all other purchases.
  • DoorDash credits. Up to $120 in statement credits towards DoorDash purchases ($60 in 2020 and another $60 in 2021). Also get $0 delivery fee with free DashPass membership for at least 1 year.
  • Free year Lyft Pink membership + 10x points on Lyft purchases through March 2022. Lyft Pink usually costs $19.99 a month and includes 15% off Lyft rides, 3 complimentary bike and scooter rides a month, and priority airport pickups.
  • 1:1 points transfer to various frequent flyer and hotel loyalty programs.
  • Annual fee is $550, not waived the first year.

Note the following text:

This product is available to you if you do not have any Sapphire card and have not received a new cardmember bonus for any Sapphire card in the past 48 months.

Ultimate Rewards points. This card offers a special 50% bonus on travel redemptions made through the Ultimate Rewards travel website. That is more than any other Chase card (a 25% bonus is the most otherwise). 50,000 Ultimate Rewards = $750 in travel. Similar to Expedia or Travelocity, you can book flights on most major airlines and hotel chains. This makes it much more flexible to spend your points. You can even buy something more expensive and pay the difference.

If you have other Chase cards that earn Ultimate Rewards points like the Freedom, Freedom Unlimited, Ink Business Cash or Ink Business Unlimited, you can transfer points into this card account and take advantage of the this higher premium. In other words, your existing Ultimate Rewards points balance could be increased in value by getting this card.

Prefer airline and/or hotel points? This card also allows you to transfer Ultimate Rewards points into hotel and/or airline miles. Transfer to United Airlines, British Airways, Singapore Airlines, Korean Air, Southwest, Hyatt Hotels, IHG Hotels, and Marriott Hotels at a ratio of 1 Ultimate Rewards point = 1 mile/hotel point. Miles redemption continue to offer great value for savvy travelers, especially for last-minute travel and business class seats.

Cash redemptions are a simple and easy option, but the conversion is a straight 100 points = $1.

Sharing points. Ultimate Rewards points are instantly transferable to other accounts like family members, as long as they have their own Chase card with Ultimate Rewards as an authorized user (free with Chase Freedom). This way, you can pool points together for transfers and redemptions if you like.

Additional card benefits:

  • Dedicated customer service line with a live person that answers the phone 24/7. No waiting or complicated phone trees.
  • No foreign transaction fees.
  • Primary car rental collision damage waiver insurance. Decline the rental company’s collision insurance and charge the entire rental cost to your card. Coverage is primary and provides reimbursement up to $75,000 for theft and collision damage for most rental cars in the U.S. and abroad. Most other cards only offer secondary coverage that kicks in only after the deductible of your individual insurance policy is used.
  • Trip Cancellation/Trip Interruption Insurance. If your trip is canceled or cut short by sickness, severe weather and other covered situations, you can be reimbursed up to $10,000 per trip for your pre-paid, non-refundable travel expenses, including passenger fares, tours, and hotels.
  • Trip Delay Reimbursement. If your common carrier travel is delayed more than 6 hours or requires an overnight stay, you and your family are covered for unreimbursed expenses, such as meals and lodging, up to $500 per ticket
  • Enjoy special car rental privileges from National Car Rental, Avis, and Silvercar when you book with your card.

Note that Chase has an unofficial rule that they will automatically deny approval on new credit cards if you have 5 or more new credit cards from any issuer on your credit report within the past 2 years (aka the 5/24 rule). This rule is designed to discourage folks that apply for high numbers of sign-up bonuses. This rule applies on a per-person basis, so in our household one applies to Chase while the other applies at other card issuers.

As for the $300 annual travel credit, “annually” means the year beginning with your account open date through the first December statement date of that same year, and each 12 billing cycles starting after your December statement date through the following December statement date. So it’s not exactly by calendar year, but roughly close and you can likely get this twice under the first year’s annual fee.

To be perfectly honest, I don’t need the new Lyft and DoorDash perks very much. I have also been redeeming my points for Hyatt hotel nights primarily, so I will stick to the Chase Sapphire Preferred card with a lower $95 annual fee and the same 1:1 ratio for turning Ultimate Rewards points into Hyatt points. I will miss the Reserve’s 3X earning power on travel on dining, however! Your spending and point-redeeming situation may be different.

Bottom line. The Chase Sapphire Reserve Card has a 50,000 Ultimate Rewards points sign-up bonus, $300 annual travel credit, 3X points on Dining/Travel, Priority Pass Select airport lounge membership, up to $100 Global Entry application credit, Lyft perks, DoorDash perks, and more… in exchange for a $550 annual fee. You should compare against that of the Chase Sapphire Preferred card, which has less perks but also a lower annual fee.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Fidelity Charitable Donor-Advised Fund (DAF) Opening Process Review

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

It took me an extra year to get around to it, but it only took me about 15 minutes to actually open and fund my new Fidelity Charitable Donor-Advised Fund (DAF). I even donated stocks instead of just cash, but the donating appreciated securities were from an existing Fidelity taxable brokerage account. Here’s a brief review of the process.

Step 1: Create Fidelity account. Provide personal details, including name, address, and Social Security Number. Similar to opening a new bank or brokerage account. They need this information for tax purposes. If, for example, you make 20 donations of $100 all to different charities, you will only have one $2,000 tax receipt at the end of the year. If you already have a Fidelity account log-in, it links easily.

Step 2: Contribution selection. If donating from a Fidelity brokerage account, they have a special tool that searches for tax lots with the largest unrealized gains. This maximizes the tax advantage of your donation. This ability to find specific lots is neat and overrides your usual default setting for tax lots (ex. First-in, First-out). You can also enter you desired donation amount and it will tell you how many shares you should donate to approximate that amount (final number will depend on market price). For now, I chose to donate enough to satisfy the minimum opening amount of $5,000. Here’s a screenshot:

Step 3: Investment selection. Pre-packaged or customized allocation. One of the benefits of a DAF is that you can invest your money in between the time of initial contribution and eventual distribution. I did not spend a lot of time agonizing over this choice, as I don’t plan on keep a large amount of funds in there. We are not talking about an obscene amount of money here, so I feel better about distributing it sooner and helping out now. I am mainly using the DAF for the bonus tax savings and thus making my effective contribution larger.

Still, I was happy to see that I could create a custom allocation using low-cost index fund choices, including a Total US Stock Market Index at 0.015% annual expense ratio and US Bond Index at 0.025% annual expense ratio. Keep in mind there is also a 0.60% annual administrative fee (minimum $100). I mostly hope that the market gains will more than offset the maintenance fees.

Step 4. Confirm and Submit. The overall user experience was smooth and my choices were summarized in a clear and concise manner. The actual sale of my shares will take a few business days. It is made clear that this is an irrevocable charitable contribution. This means I am eligible to take an itemized deduction for this contribution immediately.

You can also choose to donate stocks from an outside brokerage account, but that process will take more time (and possibly more work). I plan on trying this out later, to test out that experience.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Healthywage Review: Bet on Yourself, Get Paid To Lose Weight ($50 Prize Bonus)

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

(2020 update: HealthyWage is offering a $50 Prize Boost for a limited-time for the New Year. Look for the banner on top.)

hw_logoAfter reading academic studies which found that financial incentives were effective in helping people lose weight, I joined HealthyWage.com. You tell them how much weight you want to lose, your current body details, how much time you want, and and they’ll calculate what prize to offer you based on how much you want to bet on yourself. Since I eventually lost 50 pounds with the help of HealthyWage and other weight-loss betting sites (and have kept it off since), and I wanted to share my experiences including both positive and negative aspects.

My overall HealthyWage bet was to lose 10% of my body weight over 9 months (22 pounds in my case). My offered bet was to put up $50 per month for 9 months for a potential win of $50. You may like the sound of “winning $500”, but know that a lot of it will be your own money:

healthywage500

Honestly, risking $450 to win $50 didn’t feel like a very good risk/reward ratio, but I wanted the extra motivation. Perhaps my goal was too easy and that was why the payout wasn’t as high. You can put up your own numbers and calculate your own HealthyWage offer. Your payout may be much better than mine. The quote is free, you just need to provide any e-mail address.

If I had been willing to bet that I would lose 50 pounds like I actually ended up doing, I could have earned a lot more money:

Initial weigh-in verification. There are four ways to verify your weight:

  1. Smartphone app. There is a HealthyWage app for iOS and Android. You take a clip using the app and your personal scale.
  2. Video Verification. Upload a video to their website using your personal scale.
  3. Verification by a Fitness or Health Professional – Bring a form to your “local gym, pharmacies, corporate wellness clinics, walk-in clinics, HR reps, nurses, your personal doctor, your personal trainer or your chiropractor.”
  4. Verification at a Weight Watchers Meeting.

I followed their directions carefully, uploaded my video, and both my initial and final videos were accepted with no issues or additional requests.

Every month, I would see a $50 charge on my credit card bill from Healthwage. However, that was about it. There were no encouraging e-mails. No fun tokens or prize giveaways.

Upon initial sign-up, I was given my 2-week window for final weigh-in. HealthyWage’s two-week window is definitely more generous than DietBet’s 48-hour window, with the important difference that I was never sent any reminders by HealthyWage when the time actually came. In comparison, Dietbet sent me multiple reminders beforehand. Now, I had the date marked on my digital calendar with several alerts, so I completed my weigh-in by the second day of the window. It is quite possible that if I waited until closer to the final deadline, I would have gotten a reminder. But I wouldn’t rely on it. Remember, if you forget, they keep your money!

I also did a DietBet at the same time, which is similar but different in that it collects participants into groups and then takes a cut from the pooled bets. See my separate DietBet Review.

Extra final verification hoops. Upon final weight verification, you’ll have to submit the verification video again (see above). But that’s not all. I also had to locate and upload a “before photo” and an “after photo”, which could be any photo from “around the time” of the start and end of the challenge. I also had to upload a scan of my driver’s license. Here’s a screenshot of their page asking for additional information.

Finally, I successfully referred a few people to Healthwage and received extra money added my “pot”. This referral program is nice feature to get some social support, but remember that you get the referral money only if you win your own bet.

Final payout options. There are two options to receive your winnings. A mailed check takes 3-4 weeks to process, with no fee. The other “fast” option is PayPal, which charges a 3% fee. I picked the PayPal option because I didn’t want to wait around for a check. However, they later clarified that it would still take 3-5 business days for Paypal transfer. The 3% fee is taken out by PayPal, so HealthyWage actually sends the full amount (they just choose not to subsidize the fee). In retrospect, maybe I should have just waited for the check. Here’s a screenshot:

hw_finalpay

Bottom line. I committed to a Healthywage bet to lose 10% of my initial weight over 9 months. I lost the weight, completed my verifications without hassle, won the bet, and was paid my winnings. Although I found the process a bit impersonal, they are a legit company. Calculate your own HealthyWage offer here. No obligation to get a quote. However, the fact that HealthyWage motivated me to finally lose over 50 pounds was worth more to me than the cash winnings.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Peerstreet Foreclosure Case Study #2 (Real Estate Crowdfunding)

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

I’ve invested in multiple real estate crowdfunding sites, and the one that I’ve put the most money into ($50,000+) is the PeerStreet real estate loan marketplace. If I had to give one tip about this type of real estate investing, it is that you need patience. Yes, the notes are secured by the property, and thus even if the lender defaults you should recover most if not all of the money owed to you. However, what is this process like? How long does it take? What are the possible outcomes? This is the kind of information that I would have liked to see before investing myself, so I wanted to share my experiences.

See also: Peerstreet Foreclosure Case Study #1

Initial investment details.

  • Property: Commercial property in New Jersey.
  • Target Net Investor Rate/Term: 9.25% APR for 17 months.
  • Amount invested: $1,133 out of $1,700,000 loan.
  • Appraised at $4M = 43% LTV.
  • Loan secured by the property in first position.
  • Bridge loan to redevelop into a 179-unit apartment building.

Timeline.

  • May 2018. Loaned out $1,133, my share of $1,700,000 total.
  • June 2018. One single interest payment was made.
  • August 2018. No more payments.
  • September 2018. Legal notices sent.
  • November 2018. PeerStreet and the borrower agree to a forbearance agreement. The terms of the forbearance include, the borrower paying $8,500 and in return, PeerStreet will not file the foreclosure complaint until the end of November. The borrower states that they are in the process of refinancing the loan.
  • December 2018. The forbearance agreement has expired and the borrower has not cured or paid off their loan. The loan file has been sent to a local law firm to initiate legal proceedings against the borrower. Foreclosure counsel filed the foreclosure complaint on December 13, 2018. The complaint has been sent out for service.
  • February 2019. All parties have been Served. Once the time to answer expires, we will move for defaults.
  • June 2019. Foreclosure counsel filed the final judgment package and are waiting on the court to enter the same. Judgment should be entered in the next 3 to 6 weeks
  • July 2019. The foreclosure process continues and PeerStreet is in negotiations to sell the note back to the lender. On 7/31/2019, PeerStreet provided the originating lender with an updated payoff statement as repurchase discussions continue. PeerStreet continues to wait for the Court’s ruling on its Motion for Final Judgment in the foreclosure.
  • September 2019. The Escrow Agent advised that it has received the bulk of the funds for the repurchase of the loan at $1,850,000.00.
  • October 2019. PeerStreet has completed its sale of the note, and final proceeds have been distributed to investors. Proceeds from the sale were $1,815,227, net of costs and fees associated with the foreclosure. The cash-on-cash return on this investment, after taking into account interest and fees paid to investors, was positive at 107.7%.

Final numbers. I invested $1,113 in May 2018 and got paid $87.52 of interest and $1,113 of principal for a total of $1,265.27 as of October 2019. (This was an automated reinvestment which included whatever cash was in my account, thus the odd numbers.) This works out to a 7.86% total return over 17 months, which is roughly a 5.5% annualized return. My overall annualized return across my entire portfolio is 7.3%. These numbers are net of all PeerStreet fees.

My commentary. This loan is an example of Peerstreet negotiating a settlement, in this case getting my principal back and even a a small positive return. This loan was initially concerning because the lender made a single payment and then stopped. While you have collateral, if the loan goes into default, it takes a very, very long time to seize and sell that collateral. This is why you need to diversify your notes and never invest money you need anytime soon.

I can only assume that Peerstreet negotiated with the lender here because they just didn’t want it to drag out any further. They might have gotten more money if they foreclosed, but they would also have had to finish the foreclosure, prep it for sale, market it, and then wait for a sale of the property. The lender still took advantage of the situation, as they basically didn’t have to pay any interest for 17 months and then they ended up paying less interest than they initially promised. The borrower also likely had a bad mark on their credit report, which should hurt their ability to get future loans.

I’ve read many reviews of real estate crowdfunding sites done by new investors who haven’t had the chance to experience how it all works out. Some are overly positive because they haven’t had any late payments yet, while others are too negative because they have some really late loans and assume the worst. With Peerstreet, both of my loans that went “bad” took over a year to sort out, but in the end they had positive returns. Of course, that is not always the case and I have lost some principal on a single note from another now-defunct real estate site.

Bottom line. Out of the $50,000+ I’ve now invested into 51 loans at PeerStreet over 3+ years, 48 were paid back in full in a timely manner, while three have reached various stages of the foreclosure process. This is one example where we went pretty deep into the foreclosure process, but PeerStreet negotiated directly with the borrower to settle the debt and thus avoided another several months of waiting and selling the property. The annualized return for this loan was 5.5%, while my overall annualized return across my entire portfolio is 7.3%.

If you are interested and are an accredited investor, you can sign up and browse investments at PeerStreet for free before depositing any funds or making any investments. If you already invest with them, they now sync with Mint.com.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Peerstreet Foreclosure Case Study #1 (Real Estate Crowdfunding)

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

I’ve invested in multiple real estate crowdfunding companies, and the one that I’ve put the most money into is PeerStreet. I posted my overall statistics in my PeerStreet review 2019, but here is a specific example of a loan that looked like it was going bad, but was paid off suddenly at the beginning of the foreclosure process. This is the kind of information that I would have liked to see before investing myself, so I wanted to share the real-world details.

Initial investment details.

  • Property: 2 bedroom, 1 bath, 975 sf condo in Salem, MA.
  • Net Investor Rate/Term: 8.50% APR.
  • Amount invested: $1,073.
  • Term: 24 months with extension option.
  • Total loan amount: $123,750 from Peerstreet and $13,250 from loan originator (10% “skin in the game”).
  • Appraised at $199,000 = 62% LTV.
  • Loan secured by the property in first position.
  • Stated goal is buy-to-rent.

Here is the Zillow listing. The buyer appeared to get a condo for a good price ($130k). The unit last sold for $155k in 2016.

Timeline.

  • May 2017. Loan originated. Maturity is set for June 2018.
  • May 2017 to June 2018. Interest-only payments made as agreed upon. (My portion was taken out July 2017.)
  • June 2018. Borrower requests extension.
  • August 2018. 6-month extension approved and extension fee paid.
  • November 2018. Borrower requests another extension. Additional 4-month extension granted.
  • April 2019. Payments stop coming in. Loan is late. Full balance of loan is due.
  • June 2019. Now 60+ days late. Still no payments. Demand letter sent. Foreclosure process initiated.
  • July 2019. At around 90 days late, the loan was suddenly brought current and paid off. All back interest (including default interest) and fees paid.

If you look at the MLS data, they tried to list it in March 2019 for $288,000 and then reduced to $249,000 in May 2019. The listed was removed, so I’m not sure who paid off the loan, perhaps the borrower or the loan originator somehow refinanced it elsewhere. The price wasn’t unreasonable, as the neighboring unit sold for $268,000 in May 2018 (2 bed/1 bath/1,000 sf). Notice that for this note, the loan originator put up 10% of the loan, so it had “skin in the game”. I don’t know if that made a difference.

Final numbers. I invested $1,073 in July 2019 and got paid $192.27 of interest and $1,073 of principal for a total of $1,265.27 as of July 2019. (This was an automated reinvestment which included whatever cash was in my account, thus the odd numbers.) This works out to a 17.92% total return over two years, which is 8.59% annualized return. The number was a little higher than the stated interest rate due the various penalty fees the borrower paid. These numbers are net of all PeerStreet fees.

I haven’t had a Peerstreet loan go through the entire process of foreclosure yet, but will write another update if/when that happens.

Bottom line. The vast majority of my Peerstreet loans have been paid back in full in a timely manner. Some of them end up with issues like late payments, sporadic payments, and/or repeated loan extensions, like this one. This one ended up as an example of an investment that looked like it was heading for foreclosure at nearly 90 days late with little communication, but bounced back and ended up being paid in full.

If you are interested and are an accredited investor, you can sign up and browse investments at PeerStreet for free before depositing any funds or making any investments.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Schwab Commission-Free ETF List Review (Updated 2019)

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

ETFs are surpassing mutual funds as the standard building blocks of stock and bond portfolios. Here’s a closer look at the latest updates to the Charles Schwab commission-free ETF list. While the commercials often focus on quantity instead of quality, I will do the opposite. Here are the factors that I think are important:

  • Total Assets. This is a measure of popularity and reputation. A more popular ETF will have a smaller bid/ask spread and won’t have to liquidate in a bear market. A more reputably ETF manager will have lower index tracking error. However, ETF size isn’t everything.
  • Index/Asset Class. What index does it track? Does that index cover an asset class that I want to include??
  • Cost. What is the expense ratio? Low costs are important.

Schwab Commission-Free ETF full list. This Schwab ETF OneSource page includes a full list of their 503 commission-free ETFs.

Brief history of changes. In early February 2019, Schwab announced that it would increase the number of commission-free ETFs on their list to 503 as of March 1st, 2019, including no early redemption fees (no minimum holding period). Here is the list of 246 added ETFs, including 90 iShares ETFs.

Schwab’s ETF OneSource started in February 2013 with 103 commission-free ETFs including many in-house ETFs. Schwab has become very competitive with Vanguard and iShares by developing their own brand of low-cost, index ETFs. Outside providers now include: Aberdeen Standard Investments, ALPS Advisors, DWS Group, Direxion, Global X ETFs, IndexIQ, Invesco, iShares ETFs, John Hancock Investments, J.P. Morgan Asset Management, OppenheimerFunds, PIMCO, State Street Global Advisors SPDR® ETFs, USCF, WisdomTree and Charles Schwab Investment Management.

In March 2017, Schwab dropped their standard stock commission to $4.95 per trade + $0.65 per options contract. In addition, expenses for the Schwab market cap-weighted index mutual funds were lowered to match their Schwab ETF equivalents. Schwab Index mutual funds now have no investment minimum.

Largest ETFs on Schwab Commission-Free ETF list. Here are the top 20 most popular ETFs on their list, sorted by largest total assets. Also listed are the asset class and expense ratios.

ETF Name (Ticker) Asset Class Expense Ratio
iShares Core U.S. Aggregate Bond ETF (AGG) US Total Bond 0.05%
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) US Corporate Bonds 0.15%
iShares Edge MSCI Min Vol USA ETF (USMV) US Low Volatility 0.15%
iShares TIPS Bond ETF (TIP) US Inflation-Protected Bond 0.19%
iShares 1-3 Year Treasury Bond ETF (SHY) Short-Term Treasury Bond 0.15%
iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) Emerging Markets Bond 0.39%
Schwab International Equity ETF (SCHF) International Developed 0.06%
iShares MBS ETF (MBB) US Mortage-Backed Bonds 0.09%
iShares MSCI Japan ETF (EWJ) International Country Stock 0.47%
iShares iBoxx $ High Yield Corporate Bond ETF (HYG) US High-Yield Corporate Bond 0.49%
Invesco S&P 500® Equal Weight ETF (RSP) US Large-Capk 0.20%
Schwab U.S. Large-Cap ETF (SCHX) US Large Cap Blend 0.03%
Schwab U.S. Broad Market ETF (SCHB) US Total Stock 0.03%
iShares 7-10 Year Treasury Bond ETF (IEF) Interm-Term Treasury Bond 0.15%
iShares National AMT-Free Muni Bond ETF (MUB) Municipal Bond 0.07%
iShares 20+ Year Treasury Bond ETF (TLT) Long-Term Treasury Bond 0.15%
iShares Edge MSCI Min Vol EAFE ETF (EFAV) International Developed Stock 0.20%
iShares Short-Term Corporate Bond ETF (IGSB) US Short-Term Corporate Bond 0.06%
Invesco S&P 500® Low Volatility ETF (SPLV) US Large-Cap Stock 0.25%
iShares Edge MSCI USA Quality Factor ETF (QUAL) US Large-Cap Stock 0.15%

 

Lowest Expense Ratio ETFs on Schwab Commission-Free ETF list. Here are the top 20 cheapest ETFs on their list, sorted by lowest expense ratio.

ETF Name (Ticker) Asset Class Expense Ratio
Schwab U.S. Broad Market ETF (SCHB) US Total Stock 0.03%
Schwab U.S. Large-Cap ETF (SCHX) US Large Cap Blend 0.03%
SPDR Portfolio Large Cap ETF (SPLG) US Large Cap Blend 0.03%
SPDR Portfolio Total Stock Market ETF (SPTM) US Total Stock 0.03%
SPDR Portfolio Developed World ex-US ETF (SPDW) International Developed Stock 0.04%
Schwab U.S. Aggregate Bond ETF (SCHZ) International Developed Large Cap Blend 0.04%
SPDR Portfolio Aggregate Bond ETF (SPAB) US Total Bond 0.04%
Schwab U.S. Large-Cap Growth ETF (SCHG) US Large-Cap Growth 0.04%
SPDR Portfolio S&P 500 Growth ETF (SPYG) US Large-Cap Growth 0.04%
Schwab U.S. Large-Cap Value ETF (SCHV) US Large-Cap Value 0.04%
SPDR Portfolio S&P 500 Value ETF (SPYV) US Large-Cap Value 0.04%
Schwab U.S. Mid-Cap ETF (SCHM) US Mid-Cap 0.04%
Schwab U.S. Small-Cap ETF (SCHA) US Small-Cap 0.04%
Schwab U.S. TIPS ETF (SCHP) US Inflation-Protected Bond 0.05%
Schwab 1000 Index ETF (SCHK) US Large-Cap Blend 0.05%
SPDR Portfolio Mid Cap ETF (SPMD) US Mid-Cap 0.05%
SPDR Portfolio Small Cap ETF (SPSM) US Small-Cap 0.05%
SPDR Bloomberg Barclays Corporate Bond ETF (CBND) US Corporate Bond 0.06%
Schwab International Equity ETF (SCHF) International Developed 0.06%
Schwab Intermediate-Term U.S. Treasury (SCHR) US Treasury Bond 0.06%

 

Commentary. Overall, Schwab’s OneSource ETF list does include a good mix of Schwab ETFs with good management, low costs, and low bid/ask spreads. There are also a few good iShares and SPDR ETFs that could be potential ETF pairs for tax-loss harvesting. A DIY investor should find it easy create a diversified portfolio of ETFs according to their desired asset allocation, if you know what you are looking for. With 500+ ETFs, many will be short-lived duds, while still others are ETFs that track a very similar index but are much more expensive than the competition.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Fidelity Commission-Free ETF List Review (Updated 2019)

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ETFs are surpassing mutual funds as the standard building blocks of stock and bond portfolios. Therefore, I’m taking a closer look at the latest commission-free ETF lists from the major brokers. Unfortunately, the marketing often focuses on quantity instead of quality. Who cares if they offer 500+ ETFs, if I only need six good ones? Here are the factors that I think are important:

  • Total Assets. This is a measure of popularity and reputation. A more popular ETF will have a smaller bid/ask spread and won’t have to liquidate in a bear market. A more reputably ETF manager will have lower index tracking error. However, ETF size isn’t everything.
  • Index/Asset Class. What index does it track? Does that index cover an asset class that I want to include?
  • Cost. What is the expense ratio? Low costs are important.

Fidelity Commission-Free ETF full list. The main Fidelity ETF page currently advertises 357 commission-free ETFs (28 from Fidelity and 329 from iShares). The full list requires a log-in. Here is an outdated PDF which lists the 240 iShares ETFs (89 more have since been added). There are several good, low-cost options from the iShares Core Series of ETFs.

Recent changes. In early February 2019, Fidelity announced that it would match Schwab and increase the number of commission-free ETFs on their list to “more than 500” by the end of the month. However, in late February 2019 they announced that they added a few new Fidelity ETFs and 89 additional iShares ETFs (formerly 240) as part of a “first phase”.

In February 2017, Fidelity lowered the standard commission on online stock and ETF trades to $4.95 per trade, down from $7.95 previously. In August 2018, Fidelity announced a part of zero-expense ratio mutual funds, eliminated many account minimums, and cut a bunch of mutual fund expense ratios by getting rid of share classes.

Largest ETFs on Fidelity Commission-Free ETF list. Here are the top 20 most popular ETFs on their list, sorted by largest total assets. I have added in the asset class (index) and expense ratio.

ETF Name (Ticker) Asset Class Expense Ratio
iShares Core S&P 500 ETF (IVV) US Large Cap Blend 0.04%
iShares MSCI EAFE ETF (EFA) International Large Cap Blend 0.31%
iShares Core MSCI EAFE ETF (IEFA) International Large Cap Blend 0.08%
iShares Core U.S. Aggregate Bond ETF (AGG) US Total Bond 0.05%
iShares Core MSCI Emerging Markets ETF (IEMG) Emerging Markets Stock 0.14%
iShares Core S&P Mid-Cap ETF (IJH) US Mid Cap Blend 0.07%
iShares Russell 2000 ETF (IWM) US Small Cap Blend 0.19%
iShares Core S&P Small-Cap ETF (IJR) US Mid Cap Blend 0.07%
iShares Russell 1000 Growth ETF (IWF) US Large Cap Growth 0.20%
iShares Russell 1000 Value ETF (IWD) US Large Cap Value 0.20%
iShares MSCI Emerging Markets ETF (EEM) Emerging Markets Stock 0.67%
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) US Corporate Bonds 0.15%
iShares Edge MSCI Min Vol USA ETF (USMV) US Low Volatility 0.15%
iShares S&P 500 Growth ETF (IVW) US Large Cap Growth 0.18%
iShares TIPS Bond ETF (TIP) US Inflation-Protected Bond 0.19%
iShares 1-3 Year Treasury Bond ETF (SHY) Short-Term Treasury Bond 0.15%
iShares Short Treasury Bond ETF (SHV) Short-Term Treasury Bond 0.15%
iShares Russell 1000 ETF (IWB) US Large Cap Blend 0.15%
iShares Core S&P Total U.S. Stock Market ETF (ITOT) US Total Stock 0.03%
iShares Russell Midcap ETF (IWR) US Total Stock 0.20%

 

Lowest Expense Ratio ETFs on Fidelity Commission-Free ETF list. Here are the top 20 cheapest ETFs on their list, sorted by lowest expense ratio.

ETF Name (Ticker) Asset Class Expense Ratio
iShares Core S&P Total U.S. Stock Market ETF (ITOT) US Total Stock 0.03%
iShares Core S&P 500 ETF (IVV) US Large Cap Blend 0.04%
iShares Core S&P U.S. Value ETF (IUSV) US Large Cap Value 0.04%
iShares Core S&P U.S. Growth ETF (IUSG) US Large Cap Growth 0.04%
iShares Core U.S. Aggregate Bond ETF (AGG) US Total Bond 0.05%
iShares Core MSCI International Developed Markets ETF (IDEV) International Developed Large Cap Blend 0.07%
iShares Short-Term Corporate Bond ETF (IGSB) US Short-Term Corporate Bond 0.06%
iShares Intermediate-Term Corporate Bond ETF (IGIB) US Interm-Term Corporate Bond 0.06%
iShares Broad USD Investment Grade Corporate Bond ETF (USIG) US Total Corporate Bond 0.06%
iShares 0-5 Year TIPS Bond ETF (STIP) US Inflation-Protected Bond 0.06%
iShares Core 1-5 Year USD Bond ETF (ISTB) US Short-Term Bond 0.06%
iShares 0-5 Year Investment Grade Corporate Bond ETF (SLQD) US Short-Term Corporate Bond 0.06%
iShares Core Total USD Bond Market ETF (IUSB) US Total Bond 0.06%
iShares Core S&P Mid-Cap ETF (IJH) US Mid Cap Blend 0.07%
iShares Core S&P Small-Cap ETF (IJR) US Mid Cap Blend 0.07%
iShares National AMT-Free Muni Bond ETF (MUB) Municipal Bond 0.07%
iShares S&P Short Term National AMT-Free Bond ETF (SUB) Short-Term Municipal Bond 0.07%
iShares Core U.S. REIT ETF (USRT) US Real Estate 0.08%
iShares Core High Dividend ETF (HDV) US High Dividend Stock 0.08%
iShares Core MSCI EAFE ETF (IEAFA) International Developed Large Stock 0.08%

 

Commentary. Fidelity’s list includes a good mix of iShares Core ETFs with good management, low costs, and low bid/ask spreads. An individual investor can easily create a diversified portfolio of ETFs according to their desired asset allocation. However, in their latest round of additions, they added a bunch of older iShares ETFs which were mostly more popular for professional traders and options buyers, not for long-term investors. For example, why would you buy EEM when you could buy IEMG with a much lower expense ratio? DIY investors need to choose carefully.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

NASA Federal Credit Union Application and Certificate Opening Review

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I recently joined the NASA Federal Credit Union to take advantage their current certificate rate specials (as mentioned in my monthly list of best interest rates). NASA FCU has had some good specials over the last year or so, and I finally decided to go through the extra effort to open an account last week since I had some funds available. Here are my notes on the application and certificate opening process that might be helpful to others.

Membership eligibility. NASA FCU’s field of membership is open to affiliated people as noted in their membership page, but you can also join a special group to become eligible:

If none of the above apply to you – we’ll provide a complimentary membership to the National Space Society (NSS) which entitles you to full NASA Federal membership benefits

Free and instant! Just click the proper option during the application process.

Application process. You will need to provide the usual personal information – name, address, SSN, driver’s license, etc. I uploaded a scanned image of my driver’s license. They also asked a few identity verification questions, I believe based on my Experian credit report.

Note: Based on online reports, I was expecting that applying for account would result in a hard credit inquiry, likely to my Experian credit report. This tends to be common practice amongst credit unions. However, it has been a week since my application and none of my credit monitoring services (which covers all 3 bureaus) have indicated that a credit check was done, including the one that tracks Experian. It might show up later, but nothing so far.

My account was approved later in the same day as my application. I also read some online reports about NASA FCU asking for additional documentation (i.e. Social Security card), but I was not asked for anything additional.

Tip: When you get the account approval e-mail, you need to open up the secure message to see your new NASA FCU account number. Write down this number as it is the account number of your share savings account.

Initial funding. As with nearly all credit unions, you must fund a share savings account with at least $5 and keep the $5 there. I was given the option to fund with credit card (up to $500) or bank account. I tried to fund it with $500 from a rewards credit card (to get some cash back), but the transaction was rejected. I’m not sure if it was because it was trying to go through as a cash advance, or some other reason. I later funded it with a bank account instead.

Opening the certificate special. This time around, I opened their special 15-month certificate at 3.20% APY via this page. After doing so, there was a message directing me to fund it with a mailed check to a specific address with 10 days:

There may be other options like walking in a check or using a credit union shared deposit network, but I like to do things online whenever possible. My usual process is to link my new credit union with my Ally savings account hub. First, I used the account number from the approval message (see above) and the NASA FCU routing number of 255077833. I had to use the 2 small test deposit method for verification, so that took a day. Then, Ally let me push funds with a 1-day transfer into the savings account. Finally, I used the NASA FCU Live Chat feature to have them fund my special certificate using the funds in the share savings account. Here’s my timeline:

  • Day 1 – Started application and got approval. Initiated link via Ally Bank.
  • Day 2 – Verification deposits arrived at NASA FCU. Verified link via Ally Bank. Initiated transfer.
  • Day 3 – Funds arrived at NASA FCU. Used Live Chat to fund certificate.
  • Day 4 – Certificate open and funded.

The share certificate now shows up on my online banking page, right next to the share savings account. I didn’t have to mail in anything, like a signature card. I hope that NASA FCU keeps up their trend of offering top certificate rates.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Fidelity Rewards Visa Review: 2% Flat Cash Back + $100 Sign-up Bonus

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Updated. Fidelity has condensed their rewards credit card line-up to a single card, the Fidelity® Rewards Visa Signature® Card issued by Elan Financial Services (subsidiary of US Bank). It earns a flat 2% cash back when directed to an eligible Fidelity Investments account. Right now, there is also a $100 bonus after you make at least $1,000 in purchases within the first 90 days. Here are the highlights:

  • Earn a $100 bonus when you spend $1,000 within the first 90 days.
  • Unlimited 2% cash back, when redeemed into an eligible Fidelity account.
  • No annual fee.
  • Visa Signature benefits, like Concierge service.
  • Chip-enabled and works with Apple, Android, and Samsung Pay.

Note that this card charges a 1% foreign transaction fee, which is less than the 3% that is standard on many other cards. This also still leaves you with a 1% cash back card on foreign purchases.

Eligible Fidelity accounts. The 2% rewards value applies only to points redeemed for a deposit into the following active Fidelity accounts:

  • Fidelity Cash Management Account
  • Fidelity Brokerage account
  • Fidelity-managed 529 account
  • Fidelity Retirement account (IRA, Roth IRA, SEP-IRA, Rollover IRA)
  • Fidelity Go account (robo-advisor)
  • Fidelity Charitable Giving Account (donor-advised fund)
  • Fidelity HSA

My favorite option is actually the 529 plan option if you have kids, because it is the perfect quiet way to rack up some cash and not just spend it away on a dinner or gadget. Instead, you are gradually building up a pile of money with tax-free earning towards your future college expenses. The IRA option is okay, but the annual limits are a lot lower so you have to be careful not to exceed those caps.

Let’s say you spend $2,000 a month on this card. 2% cash back means earning $40 a month in cash back. Let’s also say you put this into a 529 that earns 6% a year. If you started when your kid was born and waited 20 years until their senior year of college, that would amount to $18,574! I plugged it into this savings calculator.

Points redemption details. You can either choose automatic or manual redemption. With automatic redemption, once you reach $50 of rewards (5,000 points from net spending of $2,500), your balance will be automatically swept into your designated Fidelity account (or split between up to 5 different Fidelity accounts if you wish). You can also redeem your points “on demand” either by calling in or online after you reach the same 5,000 point minimum balance.

Note that the rewards value will be less than 2% cash back if you choose to redeem your points for other rewards such as travel options, merchandise, gift cards, and/or a statement credit.

Previous FIA Cardservices customers. You should have received your new Elan-issued cards by now. If you are not getting 2% cash back, be sure to contact them as ask. You may need to re-enroll your card.

Bottom line. I think everyone who can handle a cash back credit card (i.e. you carry no high interest credit debt) should have a 2% flat cash back card that applies to all purchases. The Fidelity Rewards Visa can make sense for Fidelity customers because you can set aside your rewards automatically and save money towards a 529 college savings or retirement account. I would try to apply when there is a sign-up bonus. Here are some similar competitor cards:

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Hanscom Federal CU Thrive Review: 5.00% APY High Interest Starter Account

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savebuttonbankHanscom Federal Credit Union (HFCU) has hiked the rate on their CU Thrive account to 5.00% APY, which is a capped certificate of deposit that rewards consistent saving. The rate is set for 12 months, and during those 12 months you can transfer up to $500 every month from a HFCU checking account. No monthly fees. However, you cannot make any withdrawals during those 12 months, or you will be subject to an early withdrawal penalty of 90 days interest.

This product is not meant for big balances. Instead, it is meant to encourage a modest savings habit. 5.00% APY is more than double what the top high-yield savings accounts offer right now.

How much interest can I earn? At 5% APY, if you maxed out this account and set aside the full $500 a month for 12 months, at the end you’d have put in $6,000 and earned about $150 in interest by the end of the year (~$162 if you made every transfer on the 1st of the each month by my quick calculations). $6,000 also happens to be just about the same amount as a full Roth IRA contribution. Hint, hint.

At the end of the 12 months, all accrued savings plus earned dividends will be transferred into your primary savings account. Each member can only have one CU Thrive account open at one time, but after one 12-month period ends you can open up another one (assuming it is still offered). Full disclosure (PDF).

Eligibility details. To open a CU Thrive account, you must first open an HFCU checking account in addition to the savings account required for all members. HFCU offers a free checking account with no direct deposit and no minimum balance requirement. HFCU membership is open to active duty or retired military, but anyone can also join the Air Force Association, Paul Revere Chapter for a one-time $20 fee and be eligible. On the application, choose the option “I am a member of or will be joining a sponsoring member organization.” You must also keep $25 in the share savings account as long as you are a member.

New refer-a-friend program. HFCU has a referral program which offers an additional $30 cash bonus after your new savings and checking accounts are open and in good standing for 90 days. The referring member gets $30 as well. If you would like a referral from me, please me send your full name, e-mail address, the text “HFCU referral” via my contact form. I will use this information only to fill out their referral form.

Account opening process. I started the online application and said I would join the Nashua River Watershed Association for a one-time $35 fee (the AFA option was not available at the time). I had to provide the usual personal information and then answer questions based on my credit report to verify my identity. Based on my free credit monitoring, they did not perform a hard pull on my credit report. You can fund with an online bank transfer but they also gave me the option to fund with credit card up to $2,000. They didn’t mention if this would be considered a cash advance or not, but it showed up as a purchase for me. Finally, you must print out, sign, and mail in a signature card. You can also open an account in-person. All of their physical branches appear to be located in Massachusetts.

My 1-year experience. I had set the maximum $500 to be transferred every month to my CU Thrive account from my HFCU Checking account. I made 11 transfers but missed one because my checking balance was too low on the date of automatic transfer. My fault. When that happens, the account basically just skips the transfer. There is no penalty, you just don’t get to earn interest on that money. I called them but they said there was no way to replace that transfer, even if I moved more money into the checking account a day later. Other than that, everything went very smoothly and I was paid my interest as promised. At the 1-year maturity date, the funds were automatically transferred to my HFCU savings account and the CU Thrive no longer shows up on my online account page. I can now open up another CU Thrive account, if I wish.

I also discovered that Hanscom Federal has paid a Loyalty Dividend to its Credit Union members for over 15 consecutive years. In 2017, they paid a 2% bonus on dividends earned and consumer finance charges paid over the year. So on top my my $78.46 of interest earned, I earned another $1.57 in bonus loyalty dividends.

In addition to the CU Thrive and free checking options, HFCU also has a Kasasa Cash Checking account that offers up to 2.50% APY on balances up to $15,000 if you make at least 12 debit card or credit card purchases per month, complete at least 1 ACH Credit/Direct deposit per month, and enroll in online statements.

Bottom line. The CU Thrive account is a good option for people looking to build up a savings habit, with 5.00% APY for 12 months, $30 sign-up bonus, and easy membership eligibility. However, the system really works best if you use HFCU’s free checking as your primary checking account. Juggling it as an external savings account is perfectly possible, but you have to keep on top of your transfers to avoid idle cash earning zero interest. I received all of the interest promised, the customer service was nice and polite when contacted, and any errors were my own.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Real Estate Crowdfunding: Realtyshares Foreclosure Process Example 2018

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Final update. I’ve invested in multiple real estate crowdfunding websites, including $2,000 into a single debt investment at RealtyShares. Unfortunately, this loan backed by a multifamily unit went into foreclosure and I outline what happened. There are risks in every investment, and my loss is your learning opportunity!

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Initial investment details.

  • Property: 6-unit, 6,490 sf multifamily in Milwaukee, Wisconsin.
  • Interest rate: 9% APR.
  • Amount invested: $2,000.
  • Term: 12 months with 6-month extension option.
  • Total loan amount $168,000. Purchase price $220,000 (LTC 76%). Estimated after-repair value $260,000. Broker Opinion of Value $238,000.
  • Loan secured by the property in first position. Personal guarantee from borrower.
  • Stated goal to rehab, stabilize, and then either sell or refinance.

Brief recap.

  • January 2016. Funds committed. Loan closed.
  • July 2016 to May 2017. Sporadic payment history for over a year. They would be on-time for a while, then there’d be a late payment, then things would brought back current, etc.
  • May 2017. Borrower stated that the property was under contract for $225,000 with final walk-through completed and expected close within 30 days.
  • June 2017. Borrower stopped paying. I guess the sale fell through (or they lied). Foreclosure process initiated by RealtyShares.
  • September 2017. Judgment granted in Wisconsin court. By law, there will be a 3-month redemption period where the borrower can still keep the house if they pay foreclosure judgment plus interest, taxes, and costs.
  • January 2018. The foreclosure sale was held and property ownership was reverted to RealtyShares. A judge still needs to confirm the sale.
  • February 2018. The judge confirmed the foreclosure sale, and RealtyShares is officially the owner of the property. Property can now be assessed and fixed up before sale.
  • April 2018. Property listed for $134,500 as per new BPO (Broker Opinion of Value).
  • June 2018. Property is under contract for sale. Exact price unknown.
  • July 2018. Property sold. Final disbursement of $1,133.73 received.

Final numbers. I invested $2,000 and got paid $210.84 of interest and $1,133.73 of principal for a total of $1,344.57. This means I only got back 67% of my money after more than 2 years. On the other hand, I have made over 50 different real estate-backed loans now, and it was only a matter of time before I got a full default. This was my first investment that finished foreclosure, but it won’t be my last.

The question is how often that happens and the size of those losses. When it came to Prosper or LendingClub, the interest rates might be higher but when a loan was 60 days late you were pretty much done. As an unsecured loan, you had nothing to fall back on if the borrower broke their promise (besides hurting their credit score). Sending it to collections typically only got you pennies on the dollar. In this case, I got back 57 cents on the dollar when you exclude interest.

Beforehand, RealtyShares told me that the foreclosure process in Wisconsin typically took about 12 months. That turned out to be a good estimate, as it was 12 months between foreclosure initiation and the property being under contract for sale.

Lessons. First, don’t put too much weight on a BPO (broker opinions of value). A broker thought this property was worth $238,000 in January 2016. Another broker thought the same property was worth only $134,500 in April 2018. The final sale price was probably closer to $100,000. That is a big gap.

Second, you should consider the local economic situation. This area is hurting, and if you do some digging you’ll see foreclosures all over the place. I didn’t know this at the time, but the low-income rental market in Milwaukee, Wisconsin was profiled in the NYT Bestselling book Evicted: Poverty and Profit in the American City (my review). Many of the properties mentioned in this book were literally down the street from this unit.

Third, you need to diversify. If this was my only investment, I might have an overly negative opinion of the asset class. If my successful Patch of Land loan was my only investment, I might have a overly positive opinion. Instead, this is one of 50+ investments for me (mostly at PeerStreet) and while I maintain a positive return higher than cash across my investments, there is the occasional foreclosure like this. Basically, when you read about my experience or someone else’s, you must take into account sample size.

Finally, I believe that some marketplace/crowdfunding sites may be better at sourcing and underwriting loans than others. As of November 2018, Realtyshares has stopped accepting new investments (they will continue to service existing investments). Even before that, they abruptly stopped doing residential loans to “focus” on commercial properties. I knew their specialty was more commercial real estate, but I didn’t want to commit $25k to a single commercial investment, so I went with this smaller residential loan. Since then, I have shifted my residential debt investing to PeerStreet as they allow me to split my investments into $1,000 minimums and they also have a slightly different model.

Communications quality. I would grade the online updates from RealtyShares as acceptable/good. They are relatively detailed and consistent, providing me a look inside the foreclosure process. Here are some sample updates:

October 9, 2017 We have identified a real estate broker to sell the property. The broker spoke with the previous property manager who was at the property a couple of weeks ago and who may be available for property preservation. The broker is going to take a contractor to the property to try and get an accurate cost estimate to complete the renovation.

September 21, 2017 Judgment was granted at the hearing. We expect the filed judgment from the court in approximately one week and will process it upon receipt. We should be able to schedule the sale in late October and it will be held after the redemption period expires—sometime in December. As soon as we receive the filed judgment order from the court we will have the exact 3 month redemption date. Sale cannot be held until the redemption period has expired.

September 8, 2017 The partner has declined to go forward with the purchase of the property. On the foreclosure front, the judgement hearing is scheduled for September 18th. If the judgement is successful, there is a 6-month right of redemption period during which the property can not be sold. During this period we will identify a property preservation firm and a commercial broker to sell the property.

August 25, 2017 A minority partner has stepped forward and has asked for a week to visit the property with the idea of making a paydown in exchange for an extension. We have agreed to speak next week after his inspection.

August 22, 2017 Service has been completed on the foreclosure. The defendants were personally served with the summons and complaint on August 2, 2017. The statutory answering time will expire on August 22, 2017. The judgment hearing will be scheduled at that time.

June 29, 2017 Due to the borrower’s inability to stay current, we have decided to start the foreclosure process for payment default. The foreclosure will run parallel with the sales process, meaning if the sponsor can sell the property and pay us off before the foreclosure is complete we will stop the process, if not we will take over the property. Typically, foreclosures in Wisconsin take up to 12 months.

Bottom line. Investing in real-estate backed loans means that if the borrower doesn’t pay up, you can foreclose and take over the property. But what is that really like? The purpose of this post is to provide real-world dates and numbers for a completed foreclosure on a marketplace real-estate investment site. I haven’t seen any other similar resources.

My current active investments are at PeerStreet ($1,000 minimums, accredited-only, debt-only) and Fundrise eREIT ($500 minimum, open to everyone, equity and debt).

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Citi Simplicity® Card Review: 0% for 21 Months (1.75 Years), No Late Fees, No Penalty Rates

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. Thank you for your support.

Interest rates are rising, and that applies to credit cards as well. The Citi Simplicity® Card comes with an extended 0% intro period for balance transfers while also offering some “accident forgiveness insurance”. Do you have a balance that you are finally ready to pay off? The highlights:

  • 0% Intro APR on balance transfers for 21 months from date of first transfer. All transfers must be completed in first 4 months.
  • 0% Intro APR on purchases for 12 months from date of account opening.
  • There is a balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater
  • Simplicity = No Late Fees, No Penalty Rate, and No Annual Fee.
  • Simplicity = When you want to speak to a human, just call and say “representative”

No late fees, no penalty rate details. On most other credit cards, if you make a late payment, you’ll first be charged a late payment fee of about $35. On top of that, your super-low interest rate disappears and instead gets jacked up to something called their “default rate” or “penalty rate”. This could be over 30% APR! This card adds a bit of flex in that they do not charge penalty rates or late fees.

Note that if you are 30 days late on this or any credit card, Citi will still report this activity to the credit bureaus. This card may be forgiving but you should still keep your credit score as high as possible.

The strongest part of this card is the long 21 month period, so you can spread out payments over 1.75 years and ideally pay it all off by the end. There is a 5% balance transfer fee ($5 min). However, 5% works out to just 3 months of interest at 20% APR. Transferring a balance to this card from a 20% APR card would be the equivalent of paying 3 months interest at 20% APR and then having 18 months with 0% interest. Once the intro period on all 0% cards expire, the rates will go right back up. You’ll either need to pay it off or transfer your balance again if you need more time. With this card, you’ll have a full 21 months to spread your payments out.

Alternatively, if you are certain that you will pay it off within a shorter time period, look for a card with no balance transfer fee. Compare with other low fee 0% APR balance transfer offers.

This card does not earn any cash back, points, or airline miles. Many times, rewards cards are bad deals for those carrying balances. I’d open a separate card for rewards after your balances are paid off and you join the “Paid in full every month” club.

Bottom line. The Citi Simplicity® Card is best for folks that are serious about paying off their balances. You get a long 0% introductory period of 21 months on balance transfers, with a one-time 5% balance transfer fee ($5 min). The card includes consumer-friendly features that help ensure your low rates don’t get hiked with a single late payment. If you do the math and can make adequate payments to pay down your balance over a 21 month (1.75 years) span, this card may help get you debt-free with minimal gotchas. No annual fee.

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