Curb your bitcoin enthusiasm
And more of the week's best financial advice
Here are three of the week's top pieces of financial advice, gathered from around the web:
Curb your bitcoin enthusiasm"You might be tantalized by the shocking rise in the value of bitcoin, but don't let it sweep you off your feet," said Gail MarksJarvis at the Chicago Tribune. The price of the digital currency has surged more than 350 percent this year, with its price last week surpassing $5,000 for the first time ever before dropping back into the mid-$4,000s. By comparison, the stock market is up about 10 percent for the year. However, bitcoin isn't a "no-brainer" investment. The graph of bitcoin's staggering rise looks a lot like previous market manias, including the dotcom bubble. Bitcoin may well endure as a legitimate currency, but "astronomical gains don't continue forever."
Rental insurance for college studentsCollege arrivals: Don't forget about renters insurance, said Kelli Grant at CNBC. "Theft and property damage incidents on college campuses are relatively rare, but not unheard of." Burglary is the biggest risk, with about nine incidents per 10,000 full-time students in 2016. Dependent students don't always need their own separate policy, because their possessions are usually covered under their parents' homeowners or renters insurance. "Yet it's worth checking with your agent." Some policies may exclude coverage for students living in off-campus housing. Most policies also cap coverage for "items stored off premises" — including dorm rooms — at 10 percent of the policy. That could leave coverage gaps, because valuable items such as electronics can add up quickly. With an average annual cost of just $190, a renters insurance policy can be "cheap peace of mind."
Take the reverse mortgage early"Many financial advisers and consumers continue to think of reverse mortgages as loans of last resort," said Pat Mertz Esswein at Kiplinger. But a reverse mortgage, taken as a line of credit early in retirement, can provide steady income as well as a buffer against financial shocks. "Tapping a line of credit could allow you to avoid taking a distribution from your investment portfolio when it has lost value." A 62-year-old borrower can qualify for a credit line worth 52 percent of his home's value, up to the Federal Housing Administration's limit of $636,150. If interest rates rise, the untapped portion of the line will grow in tandem with any interest charged. So, "over many years, the line of credit can increase to far more than the original amount."