Overview:

• This episode explores the current crisis in the housing market, examining why buying and selling homes might be more challenging than ever before.

Key Points:

• Why Sellers Are Hesitant:
  • Selling a house means giving up a low mortgage rate (often as low as 2-4%) that homeowners currently enjoy.
  • Homeowners with mortgages from 2012 to 2021 likely refinanced to secure these low rates.
  • Those with cash homes are in a strong position but may hesitate to sell due to the need for higher mortgages or more cash for upgrading.
• Challenges for Buyers:
  • Home prices remain high, influenced by the soaring market in 2020-2022.
  • Sellers may hold onto their properties unless they can secure a high price, often driven by low mortgage rates.
• The Discrepancy Between Purchase Price and Market Value:
  • Sellers may have mortgages at a low interest rate, meaning they are reluctant to sell unless they can secure a high price.
  • A significant gap exists between older mortgage payments and what buyers might face today with rising mortgage rates.
• The Impact of Property Taxes:
  • Property taxes are based on the original purchase price of the home, not current market value, creating a disparity between taxes for older homeowners and newer buyers.
  • Example: A homeowner bought their house in 2015 for $370K, with taxes of $2,800/year. The same house recently sold for $680K, with taxes now over $5,800/year, making it less appealing to sell.
• Conclusion:
  • Both buyers and sellers face significant financial challenges, which could contribute to a slowdown in the housing market.

Why This Matters:

• Understanding the dynamics of mortgage rates, property taxes, and market conditions helps clarify why the housing market may be stuck in a crisis.

Listen to this episode to gain insight into the current housing market crisis and what it means for buyers and sellers.

Introduction to 401k as a Financial Asset

• A 401k fund is often one of the largest financial assets people have, second only to their primary residence.
• Many people have tens of thousands, sometimes even hundreds of thousands, or over a million dollars in their 401k, which can represent a large portion of their liquid assets.

401k vs. Primary Residence

• Your primary residence may have equity, but it's not easily accessible.
• Unlike real estate, a 401k offers ways to access funds, though there are certain rules and penalties to consider.

Withdrawal Methods and Penalties

• Withdrawing early from a 401k may incur penalties, but there are exceptions:
  • Medical Bills: You can withdraw from your 401k without penalty to pay for unreimbursed medical bills.
  • Disability: Withdrawals are penalty-free if you’re disabled and need funds for expenses.
  • Health Insurance: Penalty-free withdrawals may be allowed for paying health insurance.

Tax Implications on Withdrawals

• Even if no penalty is charged, you may still need to pay taxes on the withdrawal since you avoided taxes when you initially contributed.

Withdrawals for Death or Disability

• If the 401k holder passes away, beneficiaries can take withdrawals without penalty, but taxes will apply.

Other Exceptions to the 10% Penalty

• Back Taxes: You can use 401k funds to pay back taxes or settle a tax lien with the IRS, although taxes will still apply.
• First-Time Homebuyer: First-time homeowners can use their 401k funds for a down payment, though this may trigger a penalty unless it's an IRA.

Using 401k for Education or Investment

• Some college expenses may qualify for penalty-free withdrawals.
• If you’re an investor, normal disbursements may also allow you to access funds without penalty.

401k as a Wealth Creation Tool

• 401k is a valuable tool for wealth creation, just like real estate.
• It’s important to manage the funds wisely to avoid having to withdraw prematurely, as this can result in losing tax benefits, investment value, or incurring penalties.

In this episode, we dive into 5 excellent sources where you can find all kinds of discounted goods, merchandise, and even hidden discount codes for online purchases.

• American Merchandise Liquidators
  • Offers pallets and truckloads of returned and overstocked goods from major retailers like Home Depot, Target, and Lowe’s.
  • Categories include tools, equipment, general merchandise, toys, furniture, home improvement, and electronics.
  • Sign up for daily email updates on new listings, but keep in mind that local availability may affect the deal.
• GovDeals
  • Government agencies sell surplus items, including vehicles, equipment, and even fire trucks and aircraft.
  • Only verified government entities can list items.
  • Offers everything from all-terrain vehicles to office furniture and real estate.
• SlickDeals
  • A site that constantly updates deals found by users.
  • Offers a variety of goods from clothing to tools, electronics, and more.
  • Deals are curated based on social popularity and user submissions.
• Ecom
  • A wholesale deal site similar to American Merchandise Liquidators but organized by category and retailer (e.g., Amazon, eBay, Walmart).
  • Sign up for daily updates on new wholesale deals.
• DealNews
  • Focuses on retail consumer-oriented deals.
  • Offers deep discounts on items like clothing, electronics, and household goods.
  • Great for those willing to sift through listings to find exceptional deals.
• RetailMeNot (Bonus)
  • A source for discount and coupon codes from a wide variety of retailers, including Papa John’s, Nike, Vistaprint, and more.
  • Check before completing your order online to potentially save extra money with a promo code.

These sources will help you find better deals, save on purchases, and even get some exclusive discount codes. Let us know if you have other great deal sources to share in the comments! Keep an eye on our website for more individual deals.