8.15.19 Owning a home isn’t always the way to go; Teacher retirement plans stink; Private labels taking over

Housing prices have gone up way beyond income. In an effort to jumpstart home buying for those in their 20s & 30s, the Feds are offering a new FHA loan for first-time condo buyers, with a 3.5 down and lower credit standards. Know the condo market is more volatile than the single-family home market, with values going up or down more quickly, creating more short-term risk. Ideally, go into a condo purchase using Clark’s rule of thumb if possible, with the intention of living there 10 years or longer. Otherwise you should rent instead, despite this new FHA financing.

On the heels of a similar disgrace in PA – stripping consumer protections from teacher retirement plans, Texas now has one of the worst law changes for teachers retirement in the country. Teachers are shunted into retirement plans vastly inferior to 401Ks or IRAs, called 403b’s. These plans have poor disclosure and massive fees. In Texas, teachers can be charged massive fees on 403bs, typically 40 times that of a company 401K. 

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The U.S. is the only developed country where consumers continue to buy primarily brand names. Roughly 1 in 4 items tend to be store brands vs nationally advertised brands. Well-targeted national ads are effective. Americans spend massive money buying brand names. That market has been eroded some, so brand manufacturers are pushing up their prices to generate higher profits. It’s working. Store brands historically have been 30% cheaper and that gap is getting larger, even as store brands are improving in quality. 

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