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  • ‘Quit entertaining these crazy-butt ideas’: This South Carolina teacher earns $158K and is very close to retirement, paid-off home — but is considering more debt for renovations. Should she?

    ‘Quit entertaining these crazy-butt ideas’: This South Carolina teacher earns $158K and is very close to retirement, paid-off home — but is considering more debt for renovations. Should she?

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    ‘Quit entertaining these crazy-butt ideas’: This South Carolina teacher earns $158K and is very close to retirement, paid-off home — but is considering more debt for renovations. Should she?

    Patience is a virtue: one that could come in handy in certain financial situations, according to personal finance guru Dave Ramsey.

    Dina, a 59-year-old teacher from Pawleys Island, S.C., is months away from retirement and a fully paid-off home but is considering more debt to finance some renovations. In a recent episode of The Ramsey Show, Dina said a home equity line of credit (HELOC) or reverse mortgage was on the table.

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    Ramsey was stunned. “Quit entertaining these crazy-butt ideas,” he told her. He told Dina she could be jeopardizing her financial future if she isn’t willing to be patient.

    To borrow or not to borrow

    A lifetime of good choices and regularly seeking money advice put Dina’s family in a good financial position. She claimed her household income is $158,000, while she and her husband have no debt besides a small mortgage, don’t eat out much and drive old cars.

    The mortgage is worth $41,000. Dina said her savings over the next few months, combined with $28,000 in a tax-sheltered annuity, should be enough to pay the mortgage off fully by August 2024.

    Dina planned to complete one final school year and retire at the age of 60.

    However, the condition of their house is getting in the way of a fairytale ending. Their family home is roughly 24 years old and in need of some repairs.

    Dina said the siding needed to be replaced, and the family wanted to add a sunroom to the back of the house. She didn’t have estimates for how much these renovations would cost but is willing to consider a HELOC or reverse mortgage to finance them.

    Ramsey isn’t a fan of that idea. “Where is that woman who called and said she [regularly] listened to [my] show!?” he asked.

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    Like Dina, many seniors consider complex financial instruments to tap into the value of their homes.

    A reverse mortgage is a loan that allows seniors to convert some of their home equity into cash. The borrower doesn’t need to pay interest or principal while they live on the property, but the loan becomes due with accumulated interest when they move away permanently or pass away.

    There are about 480,000 reverse mortgages outstanding in the U.S., according to a 2023 report by the National Consumer Law Center (NCLC).

    Industry experts believe these instruments could see more adoption in the coming years as seniors tap into their enormous housing wealth. However, Ramsey called getting a reverse mortgage a “bad idea,” and the NCLC report said, “reverse mortgages end in foreclosure much more often than they should.”

    Instead of borrowing money, Ramsey recommended some patience.

    Delay retirement

    Dina could afford her renovations if she postponed her retirement and financed it herself, Ramsey said.

    Considering her household income and the fact that mortgage payments won’t be an additional burden after August, Ramsey estimated that Dina can pay for her renovations within a couple of years if she just worked a little longer. He also recommended getting a quote on the renovations so that she and her husband can create a detailed plan for the projects.

    “Work two more years, who cares?” Ramsey said. His co-host Jade Warshaw agreed: “If you can save to pay off the house, you can save to do these improvements; it’s just going to take a little time.”

    A little patience should save Dina’s retirement nest egg.

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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  • Russia’s Vladimir Putin claims the Biden administration is ‘killing’ the USD by using it as a weapon — says ‘blow was dealt’ to America and even its allies are now ‘downsizing’ the dollar

    Russia’s Vladimir Putin claims the Biden administration is ‘killing’ the USD by using it as a weapon — says ‘blow was dealt’ to America and even its allies are now ‘downsizing’ the dollar

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    Russia’s Vladimir Putin claims the Biden administration is ‘killing’ the USD by using it as a weapon — says ‘blow was dealt’ to America and even its allies are now ‘downsizing’ the dollar

    Russia’s president Vladimir Putin has once again taken aim at the U.S. dollar — accusing President Joe Biden’s administration of “killing [it] with [its] own hands” after using the currency as a weapon of foreign policy.

    In a new and highly divisive interview with Tucker Carlson, the Russian leader said: “The dollar is the cornerstone of the United States’ power… it is the main weapon used by the U.S. to preserve its power across the world.

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    “As soon as the political leadership decided to use the dollar as a tool of political struggle, a blow was dealt to this American power.”

    To illustrate that alleged decline in the dollar’s dominance, Putin — whose comments were translated live from Russian to English — pointed out that “even the U.S. allies are downsizing the dollar in their reserves.”

    Is this trend away from the greenback — known as de-dollarization — really as bad as Russia’s president makes it out to be?

    Was the writing on the wall?

    De-dollarization occurs when countries shift away from the dollar as a reserve currency, medium of exchange or unit of account. The U.S. has repeatedly dismissed any notions that this is a problem — instead deeming it a “natural desire [for countries] to diversify” their economies.

    But Putin implied Russia’s hand was forced to ramp up its de-dollarization plans after its invasion of Ukraine in 2022, which triggered a backlash of heavy sanctions by the U.S. and other Western powers. Russia was also kicked off the world’s main international payments network Swift.

    “Look at what is going on in the world,” Putin told Carlson. “Until 2022, nearly 80% of foreign transactions in Russia were settled in U.S. dollars or euros. Currently, it is now down to 13%… By the way, our transactions in yuan accounted for about 3%. Today, 34% of our transactions are made in rubles, and about as much, a little over 34%, in yuan.”

    While Putin blamed the sanctions in this most recent interview, many would argue the writing has long been on the wall regarding Russia’s de-dollarization.

    Russia is a founding member of BRICS, a group of emerging market economies — including China, India, Brazil, South Africa and many more — who are trying to settle major trades in their local currencies instead of the U.S. dollar. This movement is gaining momentum as countries try to reduce transaction costs, limit their exposure to global volatility and geopolitical risks and boost their local economies.

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    What does the de-dollarization data say?

    The Russian president’s warning about the greenback is well-timed. It comes amid heightened speculation around the dollar’s position as the world’s reserve currency, in large part due to the nation’s historic $34 trillion mountain of debt.

    According to data from the IMF, the greenback’s share of global allocated foreign exchange reserves has fallen by around 6% since early 2016.

    However, the U.S. dollar still accounted for 59.17% of global allocated foreign exchange reserves in the third quarter of 2023 (the latest data set) — a stark contrast to the Chinese yuan’s 2.37% of reserves in the same period.

    Analysts at FXC Intelligence, who recently published a report on de-dollarization, stated: “Our research shows that de-dollarization is happening, but… it is by no means rapid.

    “It is instead currently on course to be a slow process over the next couple of decades as countries shift to a broader range of currencies, likely to provide greater hedging from future possible geopolitical shocks.”

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    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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