Investment Insights

The ideal car insurance deductible balances risk and savings. Here’s how to find it.

From ancient civilizations and medieval nobility to modern investors, gold has remained one of the most high-demand assets in human history. The precious metal is considered a store of value with its price stability offering a safe haven for investors and collectors alike. There are numerous ways to add the precious metal to an investment portfolio, from purchasing physical gold to investing in gold-backed securities. As an investor, you need to determine which approach is the best fit for you given your unique financial situation — and whether investing in gold makes sense for you at all. If you’re wondering if gold is a good investment, this comprehensive guide will explain how to invest in physical gold, gold mining stocks, gold exchange-traded funds (ETFs and mutual funds and gold individual retirement accounts (IRAs). We survey the advantages and disadvantages of each, and you’ll gain insight into gold prices and how to choose an appropriate investment strategy tailored to your needs. What is the best way to invest in gold? There are several ways you can invest in gold, each of which has advantages and disadvantages. It is crucial to carefully evaluate your investment goals before determining which option is best for you. Factors like your timeline until retirement, anticipated income needs (keeping in mind that gold typically does not generate income until you sell it) and your overall risk tolerance should be considered. Also, be mindful that investing in gold is typically not a good short-term strategy as the precious metal performs best in a portfolio when it is held as a long-term investment. Investing in physical gold Physical gold includes anything from gold bullion — investment-quality gold with a purity of 99.5% (995) in the shape of bars, ingots, coins or rounds — to jewelry and other collectibles. There are many reputable dealers, custodians and depositories that can help you purchase the physical gold assets and securely store it. To learn more about reputable sellers, read our guide to the best online gold dealers. One advantage to investing in pure gold is that there’s robust global demand and transparent pricing. The spot price of gold is the current price at which gold trades internationally, making it easy for investors to know how much their gold is worth in real time. Furthermore, if you’re not interested in paying recurring fees for custodians and depositories, owning physical gold comes with the option of securing it yourself, thereby allowing you to hold the asset in your hands and even trade it face to face, which is appealing to some investors. On the other hand, purchasing physical gold has its risks and drawbacks. For one, verifying the purity of the precious metal can be difficult, so it’s crucial to ensure you buy from reputable dealers, whether you’re purchasing coins or jewelry in person or via an online metals broker. Additionally, you may have to pay other fees like transaction, processing, insurance and storage costs, which could reduce your overall return on investment. Read our comprehensive guide on how to buy gold to learn more. If you’d prefer investing in gold through securities — rather than owning the physical metal itself — the following section discusses the various ways investors can add gold to their investment portfolios. Investing in gold stocks Stocks of companies focused on mining gold or licensing the rights to the gold at a mining site are another option for investors who want to invest in the precious metal without buying physical assets. These stocks include shares of companies that extract gold through mining — senior miners (well-established companies) or junior miners (startups) — or that finance gold production and/or secure the rights to gold at a mining site (gold streaming companies). Although these companies should theoretically benefit from an increase in gold prices, some are better positioned to take advantage of higher prices, while others may weather downturns in gold prices more effectively. However, gold mining stocks experience greater volatility than physical assets; therefore, investing in gold stocks can make your portfolio subject to significant price fluctuations. Additionally, unlike physical gold, which always retains some level of value, there’s a non-zero possibility that an investment in a gold mining company could become worthless if the company goes bankrupt or its mine ceases production. The latter is a valid concern as gold is a finite resource and peak gold — the date at which maximum gold extraction has occurred — is a future reality. Pros and cons of investing in gold mining stocks Pros Some pay dividends, which you can’t earn with physical gold. Some brokerages and investment apps make fractional shares available to customers. The price appreciation of shares can be considerably higher than that of the underlying metal. Cons The price of gold stocks tend to be more volatile than gold itself. Stock prices are susceptible to factors outside of the price of gold, like management decisions and broad market trends. Shares of junior gold mining companies may not provide high liquidity. Ways to invest in gold stocks Buying gold stocks is relatively simple and can be done via a brokerage account with an online broker or an investment app. Once you add funds to your account, you can pick a gold mining stock and place a limit or market order. Some of the major gold companies include: Barrick Gold Corp. (GOLD) Newmont Corp. (NEM) Newcrest Mining Ltd. (NCM) Kinross Gold Corp. (K.TO) B2Gold Corp. (BTO.TO) AngloGold Ashanti Ltd. (AU) Karora Resources Inc. (KRR.TO) Sibanye-Stillwater Ltd. (SBSW) Dundee Precious Metals Inc. (DPM.TO) It’s important to conduct thorough research by looking into each company’s financial strengths and weaknesses, and understanding the potential risks of investing in any particular gold stock before purchasing shares. Investing in gold ETFs and mutual funds For investors who don’t feel comfortable picking individual stocks, gold ETFs and mutual funds provide a way to invest in the gold with greater diversification than you could get by investing in individual gold stocks or by owning the

It’s fair to ask about the latest tech boom, “Is it really different this time?”

How to Get a Home Equity Loan With Bad Credit: Quick Answer You can get a home equity loan with bad credit, but you will most likely need more equity and less debt than someone with good credit. You will also pay a higher interest rate. Your best chance of approval might be going with your current mortgage lender. Money’s main takeaways Home equity loans let you leverage the increase in your home’s value and use the proceeds for just about any purpose, from home renovations to consolidating high-interest debt. Some home equity and HELOC lenders have credit score requirements in the 600s. However, you will pay a higher rate and likely be required to have at least 20% equity in your home. Your existing mortgage lender may approve you with a lower credit score if you have a history of on-time payments and a steady income. Disputing incorrect or outdated information on your credit report, getting a cosigner, and reducing your DTI are all ways to improve your chances. Read on to find out how you could qualify for a home equity loan, even with bad credit. Table of Contents How do home equity loans and HELOCs work? How to qualify for a home equity loan with bad credit Home equity loan alternatives Summary of Money’s Home Equity Loan with Bad Credit How do home equity loans and HELOCs work? There are many ways to leverage the equity you have in your home. Two of the most popular? Home equity loans, sometimes called second mortgages, and home equity lines of credit (HELOCs). Both options allow homeowners to borrow approximately 80% to 90% of their home’s equity (minus their current mortgage balance), but they do so in different ways. Home equity loans, for instance, provide you with a lump sum that you’ll pay back in installments over a set amount of time. HELOCs, on the other hand, are a type of revolving credit. This means you can borrow up to a pre-established credit limit during its draw period, and that credit becomes available again as you pay back what you’ve borrowed. Once the draw period ends, the repayment period begins, and you will no longer be able to withdraw money. It’s important to note that both loans present a big risk: Since your home serves as collateral, the bank could foreclose on it if you fail to make your payments. Both types of loans have similar requirements, and while it might be challenging to qualify for these with a bad credit score, it’s not impossible, provided you meet other criteria. For example, banks that serve borrowers with low credit scores may require higher income and, therefore, a lower debt-to-income ratio. They might also come with higher interest rates (due to their higher risk) or ask for a greater percentage of equity in the home, as this increases the skin you have in the game and reduces the chance you’ll skip out on payments. Approval is not guaranteed You should know that a poor credit history significantly reduces your chances of approval or will come at a higher cost in terms of stricter qualifying requirements that must be met and higher interest rates. If a home equity lender “guarantees” approval, it should raise a red flag and you should be extremely cautious about applying for a home equity loan with that lender. Always get a full loan estimate that breaks down the costs and fees of any loan you’re considering. You should also get quotes from a few different lenders to ensure you’re getting the best deal. Can you get a home equity loan with bad credit? If your FICO score is between 620 and 700, you could probably qualify for a home equity loan with some lenders, provided you have enough equity in your home and a high income. Home equity lenders typically approve borrowers with 15% to 20% equity in their homes. If your score is below 700, however, they may require at least 20%. In addition to your credit score and equity, lenders will also consider your income and debt-to-income (DTI) ratio. This is the percentage of your monthly gross income that goes toward paying your existing debts — plus your new expected home equity loan payment. Many lenders allow for a maximum DTI of 43%, although some might ask for a much lower percentage if you have a low credit score. Can I get a HELOC with bad credit? Much like home equity loans, most HELOC lenders require a minimum credit score in the 620-700 range, at least 15%-20% equity in the home, and a maximum DTI of 43%. One thing to consider, however, is that unlike fixed-rate home equity loans, HELOCs typically have variable interest rates. This could increase your rate and payment over time, making it harder to budget. If you have bad credit and are applying for a HELOC, it’s important to remember that lenders will probably offer you higher interest rates, and those could become even higher over the life of the loan. This can be dangerous if you’re on a tight budget or don’t expect to earn more once those higher payments come around. It could also put you at risk of foreclosure if you can’t make payments. Requirements to get a home equity loan with bad credit Lenders that issue bad credit home equity loans will likely require the following: A minimum credit score of 620 15% to 20% equity in the house Maximum DTI of 43% Be able to pay the loan origination fee and other closing costs Consistent income/employment history Qualifying for a loan will be difficult if you don’t meet these requirements. Remember, though: Lenders can vary widely on qualifying requirements and loan programs. If you’re worried about qualifying, shop around and compare options from several banks and lenders. How to qualify for a home equity loan with bad credit While it’s not easy to qualify for a home equity loan or a home equity line of

Gen Xers and Millennials would like to know if they’re going to inherit (and how much), but Baby Boomers in general don’t like to talk about money. What to do?