How to Improve Your Chances of Being Approved For a Home Mortgage Loan

In a previous post (see link below), I discussed several techniques/tips that you can use to get a feel for how much of a home loan you can afford.

My Money Blog – How Much House Can I Afford?

However, this post was written with the assumption that you have the ability to be approved for the home loan.

Since not everyone is fortunate enough to fall under this category, I figured it would be a good idea to devote a post to explaining the various ways to improve your chances of being approved for the quantity of home mortgage or reverse mortgage you desire.

Ways to Improve Your Changes of Being Approved for a Home Loan

• Obtain a free copy of your credit report and review it 
• For information on how to obtain a copy of your credit report, please see my previous post at the following link –  My Money Blog – Monitor Your Credit Report Closely.
• After obtaining a copy of your credit report, review it for any errors or misrepresentations, as I describe in the blog post above.
• If you do not have much of a credit history, you will want to build some for yourself! For information on how to build up your credit score from nothing, see my four part post series at the following link – My Money Blog – Build Your Credit Score From Nothing

• Start saving up cash reserves for a down payment in your high yield taxable money market account
• This topic will be discussed in detail in a future post. However, for now, let’s just say that you should shoot for having a 20% down payment. 

• Try to reduce the amount of debt you are currently carrying. 
• As we saw in the post about how much of a mortgage/house you can afford, banks will look to make sure you do not have more than 40% of your total income in debt each month. By paying off your debt, you are improving the way you “look” financially to creditors.
• Additionally, as we have discussed previously, you will want to aim for paying off your high interest consumer debt first (and especially credit card debt).

• Do not lie on your mortgage pre-approval application.
• This may seem like a given, but it is especially important to be open and honest about your financial situation. Besides, by telling the truth, you are safeguarding yourself against the possibility of getting in over your head on a home loan.

• Have a firm handle on the current snapshot of your finances and what funds are and will be available to you.
• Before applying for a mortgage, you will want to make sure you calculate the value of all of your investment and debt accounts in order to determine your total net worth. You will have to write all of this information on your mortgage application anyway.
• Additionally, make sure to make note of the amount of cash reserves you have on hand that would be available for a down payment. 
• Also, be sure to include any potential sources of gift money that may become available (example – $$ from your parents, $$ inheritance money from a relative, etc).
• Know if you will be planning to use your 401k or IRA funds to help with your down payment. See the post at the following link for more information – My Money Blog – Innovative Ways to Obtain Funding For a Downpayment

• Get all of your documents in order
• You will want to make sure you have the following documents on hand:
• W-2’s
• Proof of two years of residence history and employment
• Copy of your current paycheck
• Tax returns from the last 3 years

• Get a co-signer on the loan
• As a last resort for if your finances are less than ideal, you can have a second person co-sign on the home loan. However, this will make them financially liable for the loan amount, so you will probably want to avoid this option if at all possible.

I hope these tips help, and as always, please let me know if you have any questions.

Keep on learning!

Jacob

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How Much House Can I Afford and How Much House Can I Qualify For?

It is such a difficult and loaded question isn’t it? But, just how much of a house can you afford?

Since this is one of the first questions that you have to answer when you begin your quest for home ownership, I figured I would investigate this matter to try to internalize it, and hopefully, help all of you in the process!

Start With Your Monthly Income
As you might have guessed, the best place to start finding an answer to this question is your current monthly income (gross – before taxes). The approximate value of the mortgage payment you can comfortably afford (allows room for monthly debt and living expenses) is 28% of your monthly gross income.

Calculate the Mortgage Amount that You Can Comfortably Afford
To assist you in calculating the amount of a mortgage that you can afford, I created the Google Docs spreadsheet at the link below.

Google Docs – How Much Mortgage Can You Comfortably Afford?

After clicking on the link, save a copy on of the spreadsheet on your hard drive so that you can edit it. Next, enter the following details according to your specific situation, or just leave them as the default values.

• Term of the fixed rate loan
• Interest rate you assume you will get on the loan
• Your gross monthly income – this is your income before taxes are taken out.

For my specific situation, in graduate school this fall, I will be making $23,000 per year from my research assistantship (monthly gross income of $1917). This means that I can afford a mortgage payment of $537 per month, without assistance from family. Very nice!

By running the Solver calculation as described above, Excel tells me that I should be looking for a home mortgage loan of no more than $95,535 so that I can still live comfortable. This seems reasonable for sure!

Now, remember, the mortgage payment will include four components – mortgage interest, principal, homeowners insurance, and real estate taxes. Additionally, the mortgage amount does not include the down payment on the house. Keep these things in mind as we are discussing this topic.

How Much of Mortgage Can You Qualify, or be Approved, For?
For this section, I have to start by explaining that mortgage brokers and real estate agents are almost always compensated on a % basis.

And, as such, they financially benefit by putting you in a more expensive house – and even a one that is more expensive than you can afford. Of course, this is just another reason why you want to make sure you choose carefully when selecting professional help. However, what are the financial ramifications of this, and how do you determine the biggest house that you can possibly qualify for?

So, while the 28% rule described above is the suggested mortgage amount that you can afford comfortably, as it turns out, mortgage lenders can actually lend you money such that your total monthly mortgage payment + other consumer debt equals 40% of your gross monthly income. Note: this is just debt – it does not include living expenses (food, etc).

To assist you in determining the loan amount that you can qualify for, I created the Google Docs spreadsheet at the link below. At a high level, it works by calculating the loan amount you can obtain so that the monthly loan payment added to your existing debt is equal to 40% of your monthly gross income.

Google Docs – How Much of a Home Mortgage Can You Obtain?

To use it, perform the following steps:

• Click on the link above and download a copy of the spreadsheet on your hard drive so that you can edit it with your specifics.
• As before, enter the interest rate, loan term, and monthly gross income fitting your situation.
• Additionally, in the purple highlighted cell area to the right of the ammortization schedule, enter the quantities of your monthly debt.
• The spreadsheet will then automatically calculate the maximum amount of a monthly mortgage payment that you can qualify for.
• Next, using the Excel Solver or Goal Seek function, specify that you want to set Target Cell G361 (for 30 year mortgages) or G181 (for 15 year mortgages) to a value of “0” by changing cell A2.
• This will then find the home mortgage loan amount that will cause you to completely pay off your loan principal by the end of the loan term.

Jacob

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Comparison of Bank Savings Programs

We hear the catchy jingles all of the time on the radio from Bank of America, Wachovia, and others. So, I figured it was about time to devote a blog post to evaluating these programs in general and performing a comparison to see which program comes out ahead!

Let’s get started.

Comparison of Bank Savings Programs

• Bank of America’s Keep the Change program – Bank of America – Keep the Change
• The Keep the Change program works as follows: each time you make a purchase with your debit card, the balance is rounded up to the next dollar, and the difference is transferred from your checking account to your savings account.
• For the first 3 months after you sign up, Bank of America matches 100% of the fractional Dollar amounts transferred to your savings account. After that, Bank of America matches 5%, up to an annual maximum match of $250.
• Bank of America does not offer a promotional APY interest rate for signing up for an account.
• It is also important to note that the matches are only paid once per year (we have to keep Time Value of Money in mind)

• Wachovia’s Way to Save program – Wachovia – Way to Save Account
• For every purchase that you make with your debit card and for every automatic bill payment, the program automatically transfers $1 from your checking account to your savings account.
• After the first year of opening the account, Wachovia will give you a one time bonus of 5% of your savings account balance, up to an amount of $300.
• Offers a promotional 5% APY interest rate for the deposit balance during the 1st year of signing up.

Now that we have the specifics of the details of each program, let’s now go through a scenario to see which program comes out to be a better deal. To view the scenario analysis, click on the Google Docs link below to access the spreadsheet I created.

Google Docs – Comparison of Bank Savings Programs

In this analysis, we’ll assume that a person, Joe, makes one purchase every day for two years in $0.01 increments between $1 and $2. We will then analyze the follow characteristics that would result at the end of the two year period using Bank of America’s Keep the Change program and then using Wachovia’s Way to Save program

1) The total account value
2) The total amount of free money (either from interest or matched by the programs) the Joe would receive.

Note: These calculations do not include the regular interest rate received as part of the savings account used. However, promotional interest rates are included.

By examining the spreadsheet’s calculations, we see that Bank of America’s Keep the Change program yields approximately 3X more free money ($65 vs. $19 with Wachovia’s Way to Save program), mainly resulting from the 100% match during the 1st 3 months that the account is open.

However, we also see that the total savings account value is approximately 1.7X greater with Wachovia’s program than with Bank of America’s. This is mainly due to the $1 increments that are transferred from your checking account no matter what value purchase you make.

Do I Use These Programs?

The short answer to this is “no.” I do not use these types of programs for several reasons.

• I like to be in total control over every Dollar (and fractional Dollar) I invest and save. I do not like the idea of quantities being subtracted out of my checking account without me being the direct (even though it is for a good cause) initiator. I do not mind this for expenses such as rent and internet bills, but it is different when it is something related to my savings goals.
• I feel like these programs are great for people who seem to have trouble saving money. In my case, since I am already saving approximately 50-60% of my income, it really isn’t too much of an issue.
• The interest rates associated with Wachovia’s and Bank of America’s savings accounts are very low (0.1%) when compared to the high yield money market savings account I use (Dollarsavingsdirect.com – currently at 1.30% interest rate, see the following link for additional information My Money Blog – Savings Account Options)
• I prefer to use my Chase Freedom^SM or Chase BP Gas cash-back credit cards for all of my purchases. With these cards, I get anywhere from 1-5% cash back for all purchases. (see the following link for details My Money Blog – Favorite Cash Back Credit Cards). With a debit card, I don’t receive any cash back benefits.

Will I Start Using These Programs After Doing This Analysis?

The short answer to this question, unfortunately, is also “no.” By running a quick calculation, I found out that by using my cash back credit cards, I would get $21 in free money simply by making the 2 years of purchases in the spreadsheet. This fact, along with the other resignations described above, are not, in my opinion, worth the hassle of using a different debit card for all of my purchases.

Key Takeaway


After studying these more in-depth, I definitely have a greater appreciation for how they work. Even though they are not the best fit for my situation, I am convinced that they are VERY useful for many people. I will keep them in mind as a option for recommending to friends that are looking for a good savings instrument.

Keep on learning!

Jacob

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Tax Benefits of Home Ownership

In my opinion, there are only four instruments remaining accessible to the average citizen that provide the opportunity for significant tax savings/advantages. These four instruments are listed below:

• Retirement accounts (401ks, Traditional IRAs, SEP IRAs, and Roth IRAs) – see My Money Blog – IRA Posts and My Money Blog – 401k Posts)
• Owning your own business – see My Money Blog – Starting Your Own Business
• Education savings accounts – see My Money Blog – Give Your Child A Financial Head Start in Life
• Home ownership

Note: While trusts can be a very effective shield against Uncle Sam’s “claw” reaching in your wallet, they are generally only used by wealthy people. As such, they will be the subject of a future post.

As you can see, most of the instruments above have been discussed in previous posts. However, I have yet to describe all of the fantastic tax advantages that come from owning your own home that are definitely NOT available to us as renters. This will be the topic of today’s post.

So, just what are the tax benefits of home ownership? As it turns out, there are two categories of benefits – short term and long term. Let’s look at the short-term benefits first.

Short Term Tax Benefits of Homeownership

The main short term tax benefit associated with purchasing a home relates to the mortgage “points,” or pre-paid interest, that is paid at the time of closing on a home mortgage loan. These can be deducted from your taxable income the year that you first get your mortgage.

In addition, you can also obtain tax credits for “green” building/home improvement initiatives, such as the current 2011 home improvement tax credit.

Long Term Tax Benefits of Homeownership

• Tax free capital gains
• As a refresher, capital gains taxes are taxes that the government charges on profits made on investments such as stocks, mutual funds, etc. For these instruments, if you sell your shares for a profit after holding it for less than a year, you have to pay 30% of the proceeds in taxes (15% if held for longer than 1 year).
• Primary Residence Rule – Under the current tax law, if you sell your primary (place where you have lived at least 2 years out of the last 5 years – this means that you don’t have to have lived there consecutively) residence, you don’t have to pay ANY capital gains taxes to the government on the first $250,000 in profits ($500,000 for married couples filing jointly). 
• Rental Property Rule – Fortunately, the government has also created a way to avoid having Uncle Sam taking out capital gains taxes from selling rental property. This is made possible by what’s called a “1031 tax free exchange.” The rule states that you will not be charged any capital gains taxes if you use all of the proceeds from the sale of a rental property to buy another rental property within 180 days of closing on the previous property. 
• And, the icing on the cake is that you can do this multiple times, as long as you follow the primary residence rule above. This means that you can sell your house, move to a larger one, and use your old home as a rental property!
• This is a very powerful thing! Let’s take a look at a quick example.
• Let’s assume that Bob and Kat (married) purchase good size home in 1970 for $80,000. They sell the house 40 years later in 2010 for $550,000. This represents a profit of $470,000. Not too shabby, right? Under the current tax law, they will pocket the entire amount. However, if they did have to pay long-term capital gains taxes, they would only receive $399,500. Which $ value would you prefer………?
• In addition to tax free capital gains, capital expenses can be added to the “basis” (or cost used for official tax purposes) of your property. Capital expenses are permanent improvements made to the property. Examples would include building a pool, adding on another room to the house, etc. And, by increasing the cost of the property for tax purposes, this then decreases the profit that you must pay taxes on when you sell the property (if it exceeds the tax exempt values stated previously).

• Mortgage interest
• Mortgage interest is 100% federal tax deductible on the 1st $1,000,000 of your home mortgage. For the common consumer, whose house will undoubtedly be less than $1,000,000, this means that you can deduct ALL of your mortgage interest on your home! This is quite a gift from Uncle Sam!

• Property tax 
• Additionally, 100% of property tax payments for your home are also tax deductible. While the exact property tax rate changes depending on location, the national average property tax is 1.5% of the property value every year.

Keep on learning!

Jacob

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Just Sold My Remaining Individual Stock Holdings Today

When I updated my financial goals (see link below) on 7-April-2010, I mentioned that one of my short term goals was to focus more on selling off my remaining individual stocks because 1) they were purchased either before I came to the realization that it is foolish to invest large amounts of money in individual stocks or 2) they were purchased as a learning tool by means of “play money” (to learn what play money is, see the post at the following link, My Money Blog – Play Money), and I am no longer monitoring and/or learning from them.

My Money Blog – Financial Goals

In accordance with my goal, this past Thursday, I sold off all of my remaining individual stock holdings in my Zecco.com and Sogotrade.com accords.

How did I fare on these holdings?

Well, I figure that since when tax time rolls around next year, I will have to calculate my “gain” on these stock sells anyway. So, might as well do it now so that you all can see how bad individual stocks are as an investment for an individual investor (Granted, I am no full time stock researcher. But, this is my biased opinion).

The link below contains a spreadsheet where I calculated my returns for the 10 stocks I sold on 4/7/2010.

Google Docs – 2010 Individual Stock Gains (Losses)

As you can see in the spreadsheet (green highlighted cells), my total return for holding these stocks from 8/22/2006 through 4/7/2010 was a loss of $26.20, or a loss of 2.8%. Add on top of this the commissions I paid to buy and sell the stock and any capital gains taxes that would be involved, and this makes for one truly awesome performance right!?

To complete the picture, let’s take a quick look at how the market did in this period. During this time, the S&P500 index did not perform well at all; it began at 1304 and ended at 1217, or a loss of approximately 7%. So, the good news is that I did beat the market performance during this time! woohoo! I just did better than 70% of the Wall Street professionals!

However, once we employ the power of dollar cost averaging (buy the same dollar value – I used buying $100 of shares of the S&P500 fund as an example in my spreadsheet – of a mutual fund each month as is done automatically with 401k accounts), we obtain a return of positive 3.6% (shown in yellow highlighted cells). This is quite amazing!

So, let me get this straight. We see a higher return by simply having your mutual fund account buy a set dollar value each month in an index mutual fund. You don’t have to look at it, know what’s going on in the market, worry about your asset allocation percentages, perform dollar value averaging, or do anything for that matter! And, you will get a higher return than I did for all of the effort and money I put in to stock newsletters, books, etc.

Genius right? Hardly. In fact, it’s widely known in the asset allocation/index mutual fund world that your investing should not be exciting. It should be easy, boring, and not a good topic to bring up at parties. However, it takes great discipline to do this.

Clearly, if I had mastered this discipline 3-4 years ago, I would not be writing this post! Live and learn right?

Side note: Recently, while reading the book by author Larry E. Swedroe titled “The Only Guide to a Winning Investment Strategy You’ll Ever Need,” I came across the interesting fact below about the efficiency of markets in responding to changes in information (in other words, further reinforcing the idea that it is very hard to make superior returns investing in individual stocks):

• In the stock market, the window in which investors can profit from new information coming to the market is only 40 seconds! This is truly incredible to me!

Keep on learning!

Jacob

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What Percentage of My Donation Goes to Funding Operating Expenses of the Charitable Organization?

Recently, one of my friends and I were talking about several issues related to charitable donations. At one point during the conversation, she mentioned that every time she donates money, she always wonders what percent of her donations go to fund operating and fundraising expenses that charitable organizations incur.

It then dawned on me that in my previous post about donating money to charity (see link below), I discussed many topics related to donations such as the reasons/benefits, how to find worthwhile causes, and recommended donation quantities. However, I accidentally excluded the operating expense aspect of charitable donations. This topic will be the subject of today’s post.

My Money Blog – Donating Money

To begin, let’s review the basics.

What are charitable organization operating expenses? What do they include?


Essentially, operating expenses are any expenditure that the charitable organization pays for that does not directly relate to funding programs in support of the principle operating purpose of the organization. This also includes expenses relating to raising additional funds (aka fundraising).

For example, the following expenses would be operating expenses for the National MS Society (I am planning to do the MS150 bike event in Virginia this year):

• Expenses for running the annual MS 150 bike events held throughout the country. This is fundraising.
• Salaries for employees.
• Administrative expenses – electricity bills for their office buildings, cars for the Society, travel expenses, printing paper, computers, etc.

What percent of funds typically goes to supporting operating expenses within these organizations?


By doing a quick Google.com search, I found the article at the link below about charity operating expenses. In the article, it states that many organizations now use approximately 50% of their funds for operating expenses. This is quite high! Furthermore, it states that the best quality organizations use 20% or less of their funds for these non-program related expenses.

Charitable Organization Operating Expenses

Armed with this guideline of the top-notch charities using 20% or less of funds received for operating expenses, we can then apply this in an attempt to evaluate the organizations to which we donate.

How to find out the percent of your money going to operating expenses in the organization you have chosen?

While knowing these general % levels is good, what really matters to us are the specifics of the organizations we have selected to donate money to. Luckily, there is a very good resource to use for finding out how much your selected organization spends on operating expenses.

The resource is Charity Navigator, and it can be found at the link below. After clicking on the link, type in the name of your organization in the search bar near the top of the page, and you can access all of the operating details of the organization in the blink of an eye.

Charity Navigator

As an example, let’s see how several of the organizations to which I have recently donated measure up. To determine the total % of funds committed to operating expenses, just add up the “fundraising expenses” and “administrative expenses” percentages listed under the “Organizational Efficiency” header. You can also view the percent of funds that go towards the charity’s intended programs.

The total operating expenses % for each of my recent charities are shown in the table below:

As we can see in the table, the way funds are used varies pretty significantly between organizations. However, all of them (with the exception of Goodwill) are under 30%, meaning that they are run responsibly, but not in a stellar manner, judging by the 20% criterion from above.

Use this same sort of approach to evaluate the charities that you support. I would suggest that if they commit more than 40% of your funds to operating expenses, you probably want to look for another organization.

Remember, there are MANY great causes out there!

Keep on learning!

Jacob

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My Current Asset Allocation and Net Worth Growth – April 2010

From March 6th (when the last portfolio update was published – see link below) to April 7th, the S&P 500 index went up 5.3%.

My Money Blog – March 2010 Portfolio and Net Worth

During that time period, my net worth increased 7.8%. I have now achieved the following financial goals in 2010:

• Achieved my short term target net worth for this year 
• Contributed the maximum contribution level of $5000 allowed for my Roth IRA for the year 2010 (and 2009 as well)

Currently, 26% of my net worth is invested in fixed income instruments, and 74% is invested in equity. This is just off of my targets of 25% and 75%, respectively, for these categories. These proportions are the same as they were last month.

While the overall percentages for these categories are looking good, a detailed look (table below) at the allocation breakdown reveals that I still have some room for improvement.

Remember: a red flag goes off if your current % allocation in a category is greater than +/- 5% off of the target allocation.

% Cash (money market target 5%)      10%
% non-inflat Bond Funds (target 15%) 15%
% TIPS Bonds (target 5%)                  0%
% International Equity (Target 11%)    13%
% International Emerging Markets (Target 11%) 8%
% Domestic Large Cap (Target 8%)    25%
% Domestic Small Cap (Target 9%)     9%
% Domestic Small Cap Value (Target 13%) 8%
% Domestic Large Cap Value (Target 13%) 7%
% REIT (target 10%)                            6%

In the past month, I’ve been continuing my efforts from March to move money to my emerging market mutual fund account. The progress can been seen because I now have 8% of my net worth in that category. This is a good thing!

Additionally, since I maxed out my contributions for 2010 to my Roth IRA account, I have committed a large amount of funds to contribute to my Domestic Small Cap Value mutual fund holdings. This can be seen as that component of my asset allocation is now 8% of my net worth, up from 6% in March.

Also, as mentioned before, I currently have a VERY large percentage of my portfolio in Domestic Large Cap stocks. This is due to the fact that I was contributing 100% of my 401k contributions purchase S&P500 index fund shares for 1.5 years.

Towards the end of March, I began moving money from the S&P500 fund to a domestic small cap fund in my 401k. This progress can be seen by the fact that the domestic small cap funds now make up 9% of my net worth, up from 6% at the beginning of March.

My next moves for the April/May time frame will be to do the following:

• Since I am looking at buying a condo/townhouse in the summer/fall time frame, I will be trying to build up cash reserves in my high yield savings account for the downpayment.
• Purchase an inflation adjusted bond mutual fund (TIPS)
• Begin contributing to the large-cap value funds in my taxable Vanguard mutual fund account.
• Move several additional net worth % points from the S&P500 fund in my 401k account to the domestic small cap fund.

Cost of Renting Calculator

As many of you are aware, one of the many perks of home ownership is the fact that you can obtain what’s called a “fixed-rate mortgage loan,” or a home loan whose interest rate and required period payments remains constant throughout the term of the loan.

However, this option is definitely not available when you are a renter.

Each year, renters are subject to rental price increases (with the exception of areas like New York where rental increase restrictions exist). The amount of the increase varies depending on location, the owner of the property, and the amount of maintenance that is required. However, a good low-ball estimate for the inrcrease in price is the average rate of inflation, 3.2%.

Side note: in my experiences, however, the rate of rental price increase has been higher. In college, I lived in/rented a room in a house for 3 years. During this time, the rent increased from $300 a month to $400 a month. This equated to an average rental price increase of 11.1% per year. Furthermore, in the house I lived in for 1.5 years in Virginia, the rent started out at $500 per month and then increased to $530 per month. This equated to an average annual increase of 4%.

In both of these cases, the value that I was getting from the apartment was definitely well worth the added increase, so paying the extra amount didn’t matter.

However, this and other evidence serves as a good reminder that the cost of rent will indeed increase over time! And, it is good to begin to quantify this increase ahead of time so you can be prepared for the financial ramifications.

To assist in capturing this picture for everyone’s specific circumstance, I created a customizable rent calculator using Excel. The link to the spreadsheet is shown below.

Google Docs – Cost of Renting Calculator

To use it, download an Excel version of the file to your desktop/hard-drive, and just enter the following information in the purple highlighted cells on the left:

• Current monthly rent
• Assumed increase in rent each year (or just leave the default value of 3.2%)
• The number of years you expect to live in the house/apartment/condo/townhouse

The spreadsheet will then automatically calculate 1) the monthly rental cost in each year that you expect to live in your housing unit 2) the % increase from the beginning rent price and 3) the total cost of renting the housing unit over the time period.

I hope this calculator helps you to achieve your financial goals! Please let me know if you have any questions.

Keep on learning!

Jacob

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4000 Site Visitors

Just this afternoon, My Money Blog rolled over another significant achievement – we passed the 4000 site visitors mark! Congratulations!

Thanks so much for reading! It is an honor to be a part of your life.

Keep on learning!

Jacob

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How Do Mortgage Payments Fit in to Account Hierarchy?

Recently, as I was reading through several personal finance/mortgage books, I realized that I hadn’t previously included in the My Money Blog Account Hierarchy an important factor in many people’s account prioritization decision-making process.

What is this component/factor? – It is how home mortgage payments fits in to the overall picture.

In order to keep the entire account hierarchy in one location, you can view the completed account prioritization list at the link shown below.

My Money Blog – Account Hierarchy

Let me know if you have any questions!

Keep on learning!

Jacob

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