Category: Money Matters

Real estate investing is not in any list of school choice. You can not get a degree accredited in the real estate investment. You will not find in high school or college guidance of a consultant, WHO recommends a career in real estate investment (in the case of guidance Counselor understand real estate investments, he or she probably will not be a leadership consultant!)

In the system of public schools and educational programs in the United States is only a weak attempt to prepare students to simply “get a job. ” Unfortunately, there is no class in “Making Money 101. ” You do not have the opportunity to take in the class “How to become financially independent. ” The teacher had never taught a class in “How to succeed if others can not. ” I never knew anything about succeeding as an entrepreneur or becoming wealthy during my 10 years in the university classroom. I just became a multi-millionaire when I learned the skills of real estate investments, and I paid out of pocket and out of the classroom for learning. I learned these skills in OLE University hard blows through trial and error.

Never disparage the cost of training. There is no free lunch. You need to get this know-how, outside of class, as well as learn how to make money will cost you. But if you think spending on education is expensive, you should calculate the cost of ignorance!

Nevertheless, learning real estate investment will not cost you in the arm and leg. Yes, I know real estate investing TV infomercials and the real estate investing seminars held around the country charge big bucks for those 3 day seminars and week-long camp. But this is pocket change compared to the cost they want to collect from you later. Catch this fact: all real estate investing infomercials and seminars target you as a candidate for the “Real Estate investing coaching. ” That’s where they charge you up to $ 25,000 and more than $ 50,000 a year for “coaching. ” And often you have assigned to some kid “still wet for the ears” to call you every week or month to hold your hand and whisper in your ear what common sense and persistent drive should already tell you! I am not exaggerating the real estate investing educational system, because I know that inside and outside. I personally know many of the so-called “gurus. ” I was close to him for 25 years. My opinion is that the charges are excessive, because the promoters have found deep pockets in the market.

When I began real estate investing career many years ago, real estate investing TV infomercials known real estate investment seminars and have been extremely rare. Then Mark Haroldsen followed a trend started in Al Lowry and Nick Nickerson holding occasional real estate investing seminars across the country. Later Robert Allen expanded the industry. Robert Allen promoted real estate investing conventions in major U. S. cities; he found a market for costly real estate investing information packages with tapes and note books. Potential real estate investments today aspirants who want more than an inadequate salary from employment in Dullsville often conclude that they must “pay through the nose for real estate investing know-how.

However, a diligent search of those wanna-bees often finds that this education in real estate investing more readily available from other sources than they previously imagined.

Real estate investment is probably one of the most easily learned skills never taught in school. Real estate investment is probably one of the most prolific careers on the planet Earth. Of the families who now live in houses instead of caves, houses, you can fix it everywhere. And probably nothing contributes to upgrading deplorable housing conditions across America comparable to real estate investment to repair the properties.

The entrepreneur-minded aspirant who discovers the real estate investing industry often catches a vision of life for their work. Books and online courses offer an alternative to expensive seminars and coaching.

When you drive on the road in another country,the traffic rule will be different from the rule in your own country. The traffic rule is a little bit different from country to country as general knowledge. The speed limitation might be quite different, the quality of the road is also much different from the developed country to developing country. In some countries with advanced traffic system, you need to 100% follow the rule, while rule in the rest,may just allow you go wild. Normally, European countries’ traffic rules are much stricter than we do in US.

Since the rule may change, the rule of insurance may also a little bit difference, we need to learn the new car insurance when we drive abroad, because the situation will be entirely difference when we in the States. It may difficult for most us to accept,because the fully comprehensive is going to be useless. When we drive overseas, we need to reach some specific terms for a car insurance. One good solution is that we hire a car from a company which already has its cars insurance covered. It is needed to ask the car hire company for detailed information about the car you want to hire. Because, the car insurance can be different from country to country and the insurance level is also quite different.

After picking up the right car, then you are ready to start your travel. Smart people like to learn from others’ mistake and avoid the mistake. But no one want to be teaching material. Keep in mind, never get your journey started if you travel company do not provide valid insurance for your journey. We do not know what will have happen when you drive in another country. Make sure your journey has been covered by a valid insurance is the only choice we can get. People have different manners to do things, we should learn how to follow their rule.

When you use the car you hire, make sure that your car in good condition, you have the responsibility to protect the car from being ruined. The chances of an accident is very minimal, but we need to prepare some protective measures for it. If it is your responsibility to have the car ruined, you will find that the car insurance will not pay the loss.

You may want to know why you need to refinance your car,well,it is need to refinance your car.The lower the rate,the less for you to borrow. And you shall be always remember that the interest rate must be 1 and 1/2 points lower than what you have paid.

You should refinance your car.

But you shall always remember that the cost for you to refinance will cover the left years.

Before you have decided to refinance your car,you need to make sure that your monthly savings are enough. and you must make sure that you can estimate all the closing costs before asking refinance of your car.The leader will check your finance, including the closing costs.

Well,it is also a good idea to ask your consultants to calculate the expanses you will incur whether you refinance your car or not.than you can compare the benefit between those two,you can choose the right one you want,and of course,you are also able to choose other loan programs.

However,if you have a bad credit,refinance auto loans could make you to pay more than normal standard.If you want to choose the transaction and get refinance for your care.You will need to save more money than you expected at first.Or if you do not want to spend extra money on the refinance,I’d also suggest you to improve your credit,when you have a good credit,then you can apply for a refinance.

When you come across something terrible, or someone need long-term care, a long-term insurance is needed. We also call long-term care insurance as LTC insurance, if you want to bring more secure to your life or your family, a LTC insurance is very helpful.

Before buying a LTC insurance, you should know some basically knowledge on how to buy a good LTC insurance. We hereby to write some tips which really need your attention. Generally speaking, for most customers, they need a LTC insurance to cover all the risks they need to face in their life for a long term. And most of them need to save money, lots of money for the LTC insurance.

No 1. Only go with those formidable strength carrier, like what the name says, your LTC carrier may not pay you money for 10 to 20 years. According to the agreement, when you begin to have the benefits for your LTC insurance. The carrier have might been closed down already. So our suggestion is that only go with big carrier.

No 2. When you talk with a carrier, ask them how much benefit you can receive from a LTC insurance plan. Because some LTC services cost highly, make sure your plan will totally cover it.

No 3. As a LTC insurance takes effect in a long period,we need to think about the inflation, currency depreciation. Wage rate may change from $13 per hour to $35 in a few decades, make sure you have saved enough money, or your situation may be terrible when the benefits you received from LTC insurance shrank.

No 4. Making the coverage of your LTC insurance clear, make sure it will cover the nurse fee,home fee etc.

No 5. Ways for a claim. We also suppose the case that we need a claim, then we need read the claim article carefully, we need to know the claims process and fields claims cover.

No 6. Go with carrier which has stable premiums. From many cases,we found that the LTC insurance carrier may raise premiums, so you need to make sure that your carrier will not raise premiums before went with them.

No 7. Check the reputation of your LTC insurance carrier, you can do a search on Yahoo, then you can ready some reviews about the carrier you want to go with, just get yourself a better idea before signing a contract.

So our comprehensive evaluation is that when you try to buy LTC insurance, make sure the quality of your carrier, the coverage of your insurance, also think about the economics and claims. Study carefully of the carrier and what they provide can be wise.

Follow the above seven tips will not get you passive when you need a claim. You do not need to pay over much money as you have brought a good LTC insurance. Well-considered plan, in-depth study and overall talk with care agent will just save your worries.

If you were born after 1970, chances are you are personally experiencing your first real economic recession. The boom years of the 1990s are but a fond and distant memory – and it seems that every day presents yet another hit to your wallet.

Every facet of your life is being impacted – rising oil and gasoline prices, home energy costs, food expenses, substandard mortgages and astonishing foreclosure rate, decreasing home and portfolio values, high credit balances, bank failures – the list goes on and on.

Now is not the time to stand idly by, hoping and praying that someone else will turn this all around. Decisive, committed financial planning on your part is critical to surviving and actually thriving in a recession.

Yes, we are indeed surviving a recession. We are making it through whether we are homeless, rent, or own our home. We are getting by somehow whether we are earning low-paid income, high paid income or are simply unemployed. One that we all have in common is that we are all paying much more attention to how much money we are spending. We are all avoiding luxuries and cutting necessary stuff.

We are learning the good old habit of saving. We are reminding ourselves of our ancestors and how they used cash for paying stuff. We are recalling our grandfather who saved up all the necessary money before buying a car.

If never before it is now that we are learning the basics about finances. We are learning these ropes now. But they say that it is never too late to learn. We are all cutting on our living expenses through different creative ways. We are first cutting down on our electricity and gas bills as that is something we can control if we can not control how long we are going to have a job. And they say it that people like to feel in control and stable as it contributes to better mental health.

We are forced to cut our grocery bills. We are starting to tend to our own gardens in order to get those fresh products and of course save on our grocery bills. This makes us feel that we are just fine as long as we have some food and can stack up on some food. We are learning now for the first time for some to live on essentials. And we are not less happy because life has seen us all through good and bad. We just appreciate our jobs and our families more when we see that the whole world system of economy is breaking apart.

Hopefully, this recession will make us healthier due to all these sacrifices and will teach us how to live a more balanced lifestyle that does not revolve around materialistic desires and wants. We are learning how to delay our gratification rather than to be dependent on immediate gratification. Slowly but surely we are getting rid of the credit cards as we are figuring that cash or debit cards work much better for us as they don’t charge us as much. We are finally getting back to our core values and our friends and families.

We’ve witnessed first hand that the bank can never replace your good friend as it is looking after its own interests first and that you should avoid its company. The best witnesses of that are our neighbors who lost their homes due to bad credit situation and are now facing the street. Rather get back to your friend and family who really and truly care about you and would not take advantage of you and your ignorance. Hopefully, we can come out of this experience smarter as God is definitely teaching us lessons on how to take better care of ourselves in the future and where our priorities are in life.

Here are eight easy steps you can take to get your hands around your finances in this economic meltdown:

1. Practice “necessity” driving.

Gasoline prices have become a large percentage of our monthly expenditures. Conserve that pricey tank of petrol by modifying your driving and shopping habits. Complete errands, such as picking up prescriptions or weekly grocery shopping, on your way to work, or during the trip home. Better yet, many pharmacies will mail your prescriptions to you at no cost or will deliver them to your home for less than what it would cost for you to pick them up yourself.

Instead of making a special trip to the post office to drop off Mom’s birthday gift, go online and arrange for home pickup by your local postal carrier – it’s convenient and best of all – it’s free. Take advantage of online shopping sites that offer free shipping – you can often save money by price comparisons or price matching and it won’t cost you a cent to have the goods delivered right to your door, which saves time and money.

2. Conserve home energy costs.

This is just simple math – use less and save on your monthly utility bill. Turn up or turn off your air conditioner in the summer; turn down your heat in the winter. Replace your incandescent light bulbs with energy-efficient compact LED bulbs and save 75% on your lighting costs. Use your grill more often and your oven less. Turn off any appliances and/or electronics that are not in use – such as computers, printers, cameras, and cell phone chargers. Wash larger loads of laundry one or two times per week, instead of small loads, every-other-day. Forego the dishwasher and wash your dishes in the sink – yes, I said it, just like when you were a kid.

3. No more take-out meals. Eat at home.

Americans are eating more takeout foods than ever before. In 1994-96, 32 percent of American families ate four or more weekly meals at restaurants or fast food joints, instead of preparing and eating meals at home. No wonder obesity is at an all-time high in the United States.

Boycott fast food and make a commitment to prepare all of your meals at home. You will know what you are consuming, it will contain less calories and you will save gas driving to and from your favorite eating establishment.

4. Stay put in your existing home – refinance ARMs and substandard mortgages to a fixed rate.

Needless to say, it’s a buyers’ market – it makes financial sense to stay in your existing home if you want to get ahead. Don’t succumb to the pressures of property value shrinkage – your home is still your best investment – do whatever is necessary to keep your mortgage payments current – if that means getting a second job to stay above water, then do it. If you have an adjustable rate mortgage or an interest only mortgage, make a serious attempt to refinance that mortgage to obtain a fixed rate.

5. Accumulate accessible, tangible assets such as precious metals – stay out of the stock market.

Gold and silver is still very affordable and as the recession deepens, the value of precious metals continues to increase. Gold and silver bullion is an excellent hedge against inflation and recession – if you can afford it, put 10% of your assets into precious metals. Gold and silver can be purchased tax-free and if you hold for the long run, you may actually realize a genuine profit. The stock market is not the place to be these days – too many speculators and too much volatility have ruined it for the common folk. If you have more than 10 years to your retirement, however, maintain a strong position in stocks in your 401k – your return should be about 10% over the next 10-20 years.

6. Pay off high-interest credit card debt and pay cash for what you need.

As of June, 2007, the median U.S. household income was $43,200 and corresponding credit card balance is now almost 5 percent of their annual income, or $2,160. (Source: Federal Reserve). The average credit card interest rate is 12.32%. (Source: IndexCreditCards.com). If you pay the minimum payment each month, it will take 12 years and three months to pay off the debt and you will spend an additional $1,561.17 in interest on that amount.

Resolve to pay off your credit card debt – you are making someone else richer by using these cards to pay for your necessities. If you can’t pay cash for an item, then you either don’t need it, or you need to downsize your monthly discretionary bills so that you can afford the basics.

7. Rid yourself of monthly discretionary debt.

Somehow, our parents survived without cell phones, cable TV, and high-speed Internet. If you are technologically poor, maybe it’s time to cut loose some of these conveniences – at least until you have paid off your credit cards. Your 10-year-old really doesn’t need his own cell phone, nor do you need 300 channels on your television. Examine your monthly bills and determine where you can trim the fat. You will be surprised at how much you can save each month.

8. Store your savings in more than one financial institution.

IndyMac Bank, a once successful mortgage firm that aided in the early 2000’s housing boom, was seized on July 11, 2008, by the FDIC, who is on the hook for IndyMac’s poor lending practices at the tune of $4 – $8 billion.

Most people are fully aware that the FDIC insures up to $100,000 per person on qualified accounts. At IndyMac, approximately $1 billion in deposits at the bank were uninsured, impacting 10,000 depositors. We just never thought that this would happen and trusted the U.S. economy to keep our funds safe.

Get educated about the FDIC’s insurance limits and how it may impact your particular situation – and do it today. For every high-profile bank like IndyMac, there are thousands of smaller banks across the country with similar solvency problems.

It is never too late to take control of your finances. By doing so, you will ensure that you and your family will survive the worst of economic times.

This is just a quick rant on spending vs saving, based on a conversation I recently had

I recently met a father of 3, who sells time shares for a well known company, while I was vacationing .  He was explaining to me the amount of money and income he had been losing since the economy went into a recession. At first I felt sorry for him because he seemed to have the classical American spending addiction. He had not saved a penny.

We had a decent conversation but then it started going haywire.  30 minutes into the conversation, after I divulged the amount of money I had been earning in the recession (my income had multiplied) the guy completely switches his personality and tries to sell me.

This guy was ridiculous once he starting “selling me”.  I pretended to be interested – but I only lasted 3 or 4 minutes before I started arguing my objections.  He was trying to show me how “much more quality time” I’ll be able to spend with my family if I were to buy a timeshare.  When I started saying no and objecting he started shaming me for “not wanting to spend time with my family”.  I was not hesitant to laugh in his face at this point.  The conversation was out of control. If he would of simply checked out financial planning guide for beginners book from his library, and put into action what he learned, he wouldn’t of been in the mess he was in.

Sitting in a coffee shop later that day I started to reflect on this conversation. I was weighing the pro’s and cons of spending vs saving. We’ve become conditioned here in America (and other parts of the world of course) to believe that in order to spend quality time with our kids and our family we need to spend a lot of money.  This simply is not true.  I don’t know about you – but I’ve fallen into this trap before (it cost me boatloads of money too).

Christmas time is the perfect example.  Some of us parents try to get our kids every thing they want – no matter the cost.  This is especially stupid when we buy extravagant gifts like these on our credit cards.  For some reason we think our children will love us more – which simply isn’t the case.  If you have recently been laid off due to the economy and financial troubles of the U.S. – think about this for a moment.

I was listening to “The Strangest Secret” the other day and Earl Nightingale said something that just shook me.  The best things in life are free.  Seriously.  Everything you have in your life that matters was given to you for free.  Your parents, friends, children, and extended family.  These are the best things in life.  If you are on of the people who has gotten laid off due to the economy than start thinking of this as an opportunity to spend more time with your family.  Sure you need to find a way to pay the bills – but try and look at things as half full.

Accountants can be infuriating. Sometimes it feels as if every job is twice as difficult and time consuming as it should be. Many companies’ common problems include:

• Can’t get them to return a call?

Many people’s definition of an accountant is someone who is always elusive and frequently too busy. What’s important to remember is not to accept it. Chase your accountants up – don’t feel that you are imposing. Just follow up often.

• They want to charge for even the smallest piece of advice.

Even when you pay out a small fortune for your accounts and tax returns, many accountants can be quick to charge for even a one minute phone call.

Be clear that you will not pay for any spurious or unnecessary billing. Confront them about it and don’t be talked down. As long are you are willing to be charged for any actual service or extensive advice/ guidance provided, you are doing nothing wrong.

• Overcharging

If you feel your accountant overcharges, then talk to them about it, make it clear you have options and see if the rate is negotiable. If it isn’t then shop around and don’t be talked into signing up with the first accountant you speak to.

Alternatively, you can use a comparison site to make sure you are getting the best deal for the best possible price.

• Personality Clashes

Sometimes even the most prompt accountant can rub you up the wrong way. Unfortunately this is the kind of problem that can’t really be fixed.

To try and avoid this issue ensure you take advantage of the free no obligation meeting most accountants offer. It gives you an opportunity to check that you can get along whilst also allowing them to talk you through what they can do for you.

• Location

The best accountant in the world can be rendered more or less useless by a change of location on either party’s behalf.

However, don’t assume that an accountant must be on your doorstep. The majority of the work can be done via email or telephone. Weekly meetings with accountants are a myth as far as small companies go and anyway, who would want that?

A range of 15 miles is a practical distance, accessible on a semi regular basis without too much hassle. Some business types (medical, solicitors, hotels etc) may require a more specialized accountant which means accepting further distances but you do get someone who knows your business inside an out.

• They don’t understand you business

Some accountants live in the dark ages, I’m sorry to day. In the ever evolving world of business, companies need an accountant who can understand their business model, ensuring that they get the best advice and help with the accounts management.

Make sure your accountant seems fluent in the business language you are speaking or find a specialist accountant in your field.

The most important thing to remember is that you pay them for a service. If they are not providing it then find someone that will! Simply typing ‘accountant in…’ into any search engine will allow you to find a selection of people in your area. If you have very specific needs it might be an idea to use a comparison site to do the leg work for you. So make sure any accountant you sign up for is thoroughly vetted first!

An adjustable rate mortgage, called an ARM for short, is a mortgage with an interest rate that is linked to an economic index. The interest rate, and your payments, are periodically adjusted up or down as the index changes.

ARM Terminology

Index

An index is a guide that lenders use to measure interest rate changes. Common indexes used by lenders include the activity of one, three, and five-year Treasury securities, but there are many others. Each ARM is linked to a specific index.

Margin

Think of the margin as the lender’s markup. It is an interest rate that represents the lender’s cost of doing business plus the profit they will make on the loan. The margin is added to the index rate to determine your total interest rate. It usually stays the same during the life of your home loan.
Adjustment Period

The adjustment period is the period between potential interest rate adjustments.

You may see an ARM described with figures such as 1-1, 3-1, and 5-1.

The first figure in each set refers to the initial period of the loan, during which your interest rate will stay the same as it was on the day you signed your loan papers.

The second number is the adjustment period, showing how often adjustments can be made to the rate after the initial period has ended. The examples above are all ARMs with annual adjustments–meaning adjustments could happen every year.

If my payments can go up, why should I consider an ARM?

The initial interest rate for an ARM is lower than that of a fixed rate mortgage, where the interest rate remains the same during the life of the loan. A lower rate means lower payments, which might help you qualify for a larger loan.

How long do you plan to own the house? The possibility of rate increases isn’t as much of a factor if you plan to sell the home within a few years.

Do you expect your income to increase? If so, the extra funds might cover the higher payments that result from rate increases.

Some ARMs can be converted to a fixed-rate mortgage. However, conversion fees could be high enough to take away all of the savings you saw with the initial lower rate.

ARM Indexes

While you can’t dictate which index a lender uses, you can choose a loan and lender based on the index that will apply to the loan. Ask the lender how each index used has performed in the past. Your goal is to find an ARM that is linked to an index that has remained fairly stable over many years.

When comparing lenders, consider both the index and the margin rate being offered.

Discounted Rates and Buydowns

When you’re buying a home you might encounter sellers who offer to pay a buydown fee that allows the lender to offer you an initial rate that’s lower than the sum of the index and the margin. New home builders sometimes offer that type of purchase package to help get people into their homes.

The buydown rate will eventually expire and your payments could rise significantly if an ARM rate is adjusted upwards at the same time the discount expires.

Keep in mind that sellers sometimes raise the price of a home by the amount they pay to buydown your loan. The extra cost may in time override any savings from the initial discount.

Interest Rate Caps

Rate caps limit how much interest you can be charged. There are two types of interest rate caps associated with ARMs.

• Periodic caps limit the amount your interest rate can increase from one adjustment period to the next. Not all ARMs have periodic rate caps.
• Overall caps limit how much the interest rate can increase over the life of the loan. Overall caps have been required by law since 1987.

Payment Caps

A payment cap limits how much your monthly payment can increase at each adjustment. ARMs with payment caps often do not have periodic rate caps.

Carryovers

If an interest rate cap held your interest down at an adjustment even though the index went up, the amount of the increase can be carried over to the next adjustment period.

Beware of Negative Amortization

Amortization takes place when payments are large enough to pay the interest due plus a portion of the principal.

Negative amortization occurs when payments do not cover the cost of interest. The unpaid amount is added back to the loan, where it generates even more interest debt. If this continues you could make many payments, but still owe more than you did at the beginning of the loan.

Negative amortization generally occurs when a loan has a payment cap that keeps monthly payments from covering the cost of interest.

The Bottom Line

Lenders are required to give you written information to help you compare and select a mortgage. Don’t hesitate to ask as many questions as it takes to help you understand every aspect of ARMs and other home loans that are offered to you.

The housing market has been a wild exhilarating and joyful ride up these past several years only to nose dive down with increasing speed and equal frustration. The stomach turns within the belly of the homeowner, as this once profitable investment becomes a heavy weight around his or her family’s neck. Mortgage Millstone; perhaps a fitting name for the negative equity experienced by millions upon millions of Americans today. Our finances affect our lives, our disposition, and our ability to function from day to day. So, what to do? Some say simply to walk away.

Have you ever failed a test? I’ve failed a test. I’m sure we all have at some point. Whether academic, work-related, personal, etc. we’ve all failed a test; but does it stop there? Do we throw the proverbial baby out with the bath water? Wouldn’t we be failing another test in so doing?

I’ll argue that at this point the test for homeowners is ongoing. But what are the rules? The rules and the goals are what defines your next coarse of action. Ultimately, what matters is where you will be in the future and not where you are today. The game is halfway done and the test is not over until the end of the game.

Lenders have failed the test too. Mortgage loans are upside down. The Federal Reserve Chairman Ben Bernanke in a March 4, 2008 speech suggested: “In my view, we could also reduce preventable foreclosures if investors acting in their own self interests were to permit services to write down the mortgage liabilities of borrowers by accepting a short payoff in appropriate circumstances.” This is a profound suggestion and one that could provide a passing grade for millions.

Your mortgage loan can be written down to a lower balance and forgiven. This is something that I personally am seeing being done every day. A mortgage loan that is $100,000 higher than the value of the home is written down by $100,000 and that $100,000 is forgiven. Poof! An instantaneous passing grade is achieved in real estate.

With a reduce mortgage balance a homeowner can refinance the mortgage to an FHA mortgage loan with a 5.5% fixed rate of interest. With a reduce mortgage balance a homeowner can sell the home on a short sale to a new buyer. With a reduced mortgage balance a homeowner can avoid foreclosure. With a reduce mortgage balance a homeowner can pass the test!

In any of the above scenarios where the mortgage lender reduces the principal balance of the loan for the homeowner to facilitate a short payoff for a refinance or a short sale, the homeowner is able to preserve his or her credit standing. This has the effect of controlling the damage done to that homeowner’s reputation in functioning in business and in life. About half of the state foreclose through judicial process and the foreclosing lender can then pursue a deficiency judgment against the homeowner immediately or can bring a suit under common loan years later based on the defaulted note. This article is not to be considered legal advice. It’s just some of the issues that one needs to investigate with an attorney.

Yet, some say walk away. This is insane; walk away and leave the test. Walk out of the school and leave the test. Holding your head low forever. This is not responsible. This is not a solution. This, my friends, is simply failing the test.