Yea.....I hope this helps..I'm always optimistic....check this link.
Senators agree to extend $8,000 housing tax credit for first-time buyers -- latimes.com
Posted using ShareThis
Friday, October 30, 2009
Wednesday, October 28, 2009
This is the otherside of the home sales coin...
New home sales fall 3.6 percent
By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer – 33 mins ago
WASHINGTON – Sales of new homes dropped unexpectedly last month as the effects of a soon-to-expire tax credit for first-time owners started to wane.
The Commerce Department said Wednesday that sales fell 3.6 percent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists surveyed by Thomson Reuters had expected a pace of 440,000.
It was the first decline since March. Sales in September were down 7.8 percent from a year ago.
The median sales price of $204,800 was off 9.1 percent from $225,200 a year earlier, but up 2.5 percent from August's level of $199,900.
The drop in sales was driven by a nearly 11 percent decline in the West and a 10 percent drop in the South. Sales rose 35 percent in the Midwest and were unchanged in the Northeast.
The data reflect contracts to buy homes, not completed sales. Many new homes are sold while they are still under construction, and buyers may be worried that they won't be able to complete the deal before the Nov. 30 deadline to take advantage of a tax credit of up to $8,000 for first-time buyers.
Congress is considering extending the tax credit through March 31 and gradually phasing it out over the rest of next year.
"If they don't extend it, then I think the pullback could be quite significant," said Brad Hunter, chief economist with Metrostudy, a real estate research firm.
Even builders of more upscale homes have felt the impact of the looming deadline. That's because those move-up buyers will have trouble selling their homes without the incentive of the credit.
"The fact that the first-time homebuyer tax credit runs out is hurting," said Bob Mitchell, chief executive of Rockville, Md.-based builder Mitchell & Best, who has gone from selling 80 to 100 homes annually to around 30 this year. Still, he noted, "we're at least selling something."
There were 251,000 new homes for sale at the end of September, down 3.8 percent from August and the lowest inventory in nearly 17 years. At the current sales pace, that represents 7.5 months of supply.
By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer – 33 mins ago
WASHINGTON – Sales of new homes dropped unexpectedly last month as the effects of a soon-to-expire tax credit for first-time owners started to wane.
The Commerce Department said Wednesday that sales fell 3.6 percent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists surveyed by Thomson Reuters had expected a pace of 440,000.
It was the first decline since March. Sales in September were down 7.8 percent from a year ago.
The median sales price of $204,800 was off 9.1 percent from $225,200 a year earlier, but up 2.5 percent from August's level of $199,900.
The drop in sales was driven by a nearly 11 percent decline in the West and a 10 percent drop in the South. Sales rose 35 percent in the Midwest and were unchanged in the Northeast.
The data reflect contracts to buy homes, not completed sales. Many new homes are sold while they are still under construction, and buyers may be worried that they won't be able to complete the deal before the Nov. 30 deadline to take advantage of a tax credit of up to $8,000 for first-time buyers.
Congress is considering extending the tax credit through March 31 and gradually phasing it out over the rest of next year.
"If they don't extend it, then I think the pullback could be quite significant," said Brad Hunter, chief economist with Metrostudy, a real estate research firm.
Even builders of more upscale homes have felt the impact of the looming deadline. That's because those move-up buyers will have trouble selling their homes without the incentive of the credit.
"The fact that the first-time homebuyer tax credit runs out is hurting," said Bob Mitchell, chief executive of Rockville, Md.-based builder Mitchell & Best, who has gone from selling 80 to 100 homes annually to around 30 this year. Still, he noted, "we're at least selling something."
There were 251,000 new homes for sale at the end of September, down 3.8 percent from August and the lowest inventory in nearly 17 years. At the current sales pace, that represents 7.5 months of supply.
Tuesday, October 27, 2009
Monday, October 26, 2009
Loan Agent Retribution....I thought we we're helping you..NOT!!!!
5 charged with beating, robbing loan agents
A couple and three associates are held on $1-million bail in attack.
By Baxter Holmes
October 26, 2009 | 7:40 p.m.
E-mail Print Share Text Size
A La Cañada Flintridge couple trying to save their home from foreclosure were arrested along with three others on suspicion of beating, torturing and robbing a pair of loan modification agents they believed had done nothing to help them rescue the residence.
Daniel Weston and Mary Ann Parmelee, both 52, allegedly sought mortgage assistance from Lamond Dean and Luis Garcia, two loan modification specialists, according to the Los Angeles County district attorney's office.
Authorities said the homeowners thought agents had taken their money and done nothing to help them.
On Oct. 20, the agents were lured to a meeting in Glendale where Weston and another man, Gustavo Canez, 36, allegedly beat and robbed them, prosecutors said.
Authorities said a handgun and wooden knuckles were used in the attack.
The attack took place in front of Parmelee, who is a real estate agent; Mario Solomon Gonzales, 47, of Glendale; and Marissa Parker, 49, of Sylmar. Gonzalez and Parker work with Parmelee to refer loan cases to Dean and Garcia, officials said.
Dean and Garcia were treated and released from a local hospital, officials said.
Parmelee, Gonzales and Parker face two counts each of torture, false imprisonment by violence and second-degree robbery. Gonzales also faces one count of possession of a deadly weapon because he was allegedly carrying the wooden knuckles, the complaint states.
Parmelee, Gonzales and Parker pleaded not guilty Friday. Weston and Canez were in court Monday, and their cases were continued to Nov. 2.
All are being held on $1-million bail.
A couple and three associates are held on $1-million bail in attack.
By Baxter Holmes
October 26, 2009 | 7:40 p.m.
E-mail Print Share Text Size
A La Cañada Flintridge couple trying to save their home from foreclosure were arrested along with three others on suspicion of beating, torturing and robbing a pair of loan modification agents they believed had done nothing to help them rescue the residence.
Daniel Weston and Mary Ann Parmelee, both 52, allegedly sought mortgage assistance from Lamond Dean and Luis Garcia, two loan modification specialists, according to the Los Angeles County district attorney's office.
Authorities said the homeowners thought agents had taken their money and done nothing to help them.
On Oct. 20, the agents were lured to a meeting in Glendale where Weston and another man, Gustavo Canez, 36, allegedly beat and robbed them, prosecutors said.
Authorities said a handgun and wooden knuckles were used in the attack.
The attack took place in front of Parmelee, who is a real estate agent; Mario Solomon Gonzales, 47, of Glendale; and Marissa Parker, 49, of Sylmar. Gonzalez and Parker work with Parmelee to refer loan cases to Dean and Garcia, officials said.
Dean and Garcia were treated and released from a local hospital, officials said.
Parmelee, Gonzales and Parker face two counts each of torture, false imprisonment by violence and second-degree robbery. Gonzales also faces one count of possession of a deadly weapon because he was allegedly carrying the wooden knuckles, the complaint states.
Parmelee, Gonzales and Parker pleaded not guilty Friday. Weston and Canez were in court Monday, and their cases were continued to Nov. 2.
All are being held on $1-million bail.
Thursday, October 15, 2009
On your mark, get set...go!!!!
Time Running Out For First-Time Homebuyers
Wednesday, 14 October 2009
By Chris Levister –
The clock is ticking for first-time home buyers scrambling to take advantage of an $8,000 tax credit set to expire November 30 – unless Congress decides to extend it.
This week, the White House said its economic team is evaluating the credit’s impact on home sales and will make a recommendation to President Barack Obama.
The National Association of Realtors and the National Association of Home Builders have launched marketing campaigns touting the credit and have pushed Congress to keep it going. But some lawmakers are balking at the cost, which may hit $15 billion – more than double the amount projected in February’s economic stimulus bill.
Unlike the home buyer tax credit Congress enacted in July of 2008, this allowance does not have to be repaid.
The federal tax credit covers up to 10 percent of the home price, or up to $8,000, for first-time buyers. Combined with low mortgage rates and falling prices the incentive is drawing first-time buyers like Alisha Baeza 30, and George Gonzalez 29 of San Bernardino.
In June Baeza used the tax credit to buy a 3-bedroom 2-and-a half bath home with a pool for $248,000. She enlisted veteran Spellacy Associates realtor Alice Wilson, and a San Bernardino program aimed at first-time home buyers. City staffers helped Baeza save money, lower her debt and arrange for a down payment.
“I started thinking about buying a home almost 2 years ago and at the time I couldn’t afford it,” recalls Baeza, a dietary manager at Saint Bernardine Hospital. Alice kept encouraging me - ‘you need to be a home owner’. Then she told me about the city program. It worked out great because they advanced the 20% down payment.
Baeza admits qualifying for a loan in the midst of a recession-caused credit crunch and wading through the mounds of required paperwork was no fun. “It was grueling – but worth it. I say to young people - go do it.” Her boyfriend George Gonzales an anesthesia equipment technician also saw his fortunes change after recently qualifying for a home loan. This weekend the couple went house hunting.
“Five years ago I couldn’t afforded a home. My credit wasn’t that good and home prices were outrageous. I figured I’d never own property,” said Gonzalez.
“When I got approved I jumped for joy, called Alisha and said come on let’s go celebrate. Now I tell people go fix your credit, save some money and see what you qualify for.”
Housing experts say first-time homebuyers snapped up three out of 10 homes sold in July. That’s about 10 percent below the average for the previous six years, according to the National Association of Realtors.
Alice Wilson says it’s a new era in home buying and home sales will struggle to rebound without a tax credit extension.
“Prices and home values are falling, banks are holding on to their wallets and there’s not a lot of housing inventory out there. That’s kept many would-be buyers on the sidelines,” she said.
She said with or without a tax break, consumers in this economy are looking for a bargain much like they are with retail sales and auto sales.
“Banks are being extra cautious, worried about the still-dire unemployment situation. The turn of the year isn’t likely to yield much good news on the job front so I don’t see a full-blown recovery on the horizon.”
Realtor Jeanine, Alice’s daughter, says while the tax credit has succeeded in energizing buyers and helping clear a glut of lower-priced homes, including foreclosed properties that are dragging down home values, buyers expecting to find a plentiful home inventory will be disappointed.
“For every decent home on the market – there are at least four or five people sometimes more bidding on it. A home can fall out of escrow and a week later its back in – with another buyer.” The problem is made worst said Jeanine because many banks are reluctant to put foreclosed properties back on the market. “Simply put, it’s very hard out there.”
The best approach is honesty said Alice.
“We tell prospective buyers with bad credit and or unstable employment. It’s just not going to happen.”
“The good ole days are behind us. Get your house in order before you dip your toes into the market,” added Jeanine, “Its bitter medicine. We’re just praying people don’t get discouraged.”
Couldn't have said it better....
Wednesday, 14 October 2009
By Chris Levister –
The clock is ticking for first-time home buyers scrambling to take advantage of an $8,000 tax credit set to expire November 30 – unless Congress decides to extend it.
This week, the White House said its economic team is evaluating the credit’s impact on home sales and will make a recommendation to President Barack Obama.
The National Association of Realtors and the National Association of Home Builders have launched marketing campaigns touting the credit and have pushed Congress to keep it going. But some lawmakers are balking at the cost, which may hit $15 billion – more than double the amount projected in February’s economic stimulus bill.
Unlike the home buyer tax credit Congress enacted in July of 2008, this allowance does not have to be repaid.
The federal tax credit covers up to 10 percent of the home price, or up to $8,000, for first-time buyers. Combined with low mortgage rates and falling prices the incentive is drawing first-time buyers like Alisha Baeza 30, and George Gonzalez 29 of San Bernardino.
In June Baeza used the tax credit to buy a 3-bedroom 2-and-a half bath home with a pool for $248,000. She enlisted veteran Spellacy Associates realtor Alice Wilson, and a San Bernardino program aimed at first-time home buyers. City staffers helped Baeza save money, lower her debt and arrange for a down payment.
“I started thinking about buying a home almost 2 years ago and at the time I couldn’t afford it,” recalls Baeza, a dietary manager at Saint Bernardine Hospital. Alice kept encouraging me - ‘you need to be a home owner’. Then she told me about the city program. It worked out great because they advanced the 20% down payment.
Baeza admits qualifying for a loan in the midst of a recession-caused credit crunch and wading through the mounds of required paperwork was no fun. “It was grueling – but worth it. I say to young people - go do it.” Her boyfriend George Gonzales an anesthesia equipment technician also saw his fortunes change after recently qualifying for a home loan. This weekend the couple went house hunting.
“Five years ago I couldn’t afforded a home. My credit wasn’t that good and home prices were outrageous. I figured I’d never own property,” said Gonzalez.
“When I got approved I jumped for joy, called Alisha and said come on let’s go celebrate. Now I tell people go fix your credit, save some money and see what you qualify for.”
Housing experts say first-time homebuyers snapped up three out of 10 homes sold in July. That’s about 10 percent below the average for the previous six years, according to the National Association of Realtors.
Alice Wilson says it’s a new era in home buying and home sales will struggle to rebound without a tax credit extension.
“Prices and home values are falling, banks are holding on to their wallets and there’s not a lot of housing inventory out there. That’s kept many would-be buyers on the sidelines,” she said.
She said with or without a tax break, consumers in this economy are looking for a bargain much like they are with retail sales and auto sales.
“Banks are being extra cautious, worried about the still-dire unemployment situation. The turn of the year isn’t likely to yield much good news on the job front so I don’t see a full-blown recovery on the horizon.”
Realtor Jeanine, Alice’s daughter, says while the tax credit has succeeded in energizing buyers and helping clear a glut of lower-priced homes, including foreclosed properties that are dragging down home values, buyers expecting to find a plentiful home inventory will be disappointed.
“For every decent home on the market – there are at least four or five people sometimes more bidding on it. A home can fall out of escrow and a week later its back in – with another buyer.” The problem is made worst said Jeanine because many banks are reluctant to put foreclosed properties back on the market. “Simply put, it’s very hard out there.”
The best approach is honesty said Alice.
“We tell prospective buyers with bad credit and or unstable employment. It’s just not going to happen.”
“The good ole days are behind us. Get your house in order before you dip your toes into the market,” added Jeanine, “Its bitter medicine. We’re just praying people don’t get discouraged.”
Couldn't have said it better....
Thursday, October 8, 2009
Hustle
I saw this dude driving a Porsche cayenne...It look nice I gave him props and he said to me after I told him his car is my favorite and I hope to buy one too....and this is what he said to me..
Hustle Harder!!!!
It stuck in my mind and made me think how American that saying really is today...so to look up hustle is this blog..for today.
hustle - 4 dictionary results
hus⋅tle /ˈhʌsəl/ Show Spelled Pronunciation [huhs-uhl] Show IPA verb, -tled, -tling, noun
Use hustle in a Sentence
See web results for hustle
See images of hustle
–verb (used without object) 1. to proceed or work rapidly or energetically: to hustle about putting a house in order.
2. to push or force one's way; jostle or shove.
3. to be aggressive, esp. in business or other financial dealings.
4. Slang. to earn one's living by illicit or unethical means.
5. Slang. (of a prostitute) to solicit clients.
–verb (used with object) 6. to convey or cause to move, esp. to leave, roughly or hurriedly: They hustled him out of the bar.
7. to pressure or coerce (a person) to buy or do something: to hustle the customers into buying more drinks.
8. to urge, prod, or speed up: Hustle your work along.
9. to obtain by aggressive or illicit means: He could always hustle a buck or two from some sucker.
10. to beg; solicit.
11. to sell in or work (an area), esp. by high-pressure tactics: The souvenir venders began hustling the town at dawn.
12. to sell aggressively: to hustle souvenirs.
13. to jostle, push, or shove roughly.
14. Slang. to induce (someone) to gamble or to promote (a gambling game) when the odds of winning are overwhelmingly in one's own favor.
15. Slang. to cheat; swindle: They hustled him out of his savings.
16. Slang. a. (of a prostitute) to solicit (someone).
b. to attempt to persuade (someone) to have sexual relations.
c. to promote or publicize in a lively, vigorous, or aggressive manner: an author hustling her new book on the TV talk shows.
–noun 17. energetic activity, as in work.
18. discourteous shoving, pushing, or jostling.
19. Slang. a. an inducing by fraud, pressure, or deception, esp. of inexperienced or uninformed persons, to buy something, to participate in an illicit scheme, dishonest gambling game, etc.
b. such a product, scheme, gambling game, etc.
20. Informal. a competitive struggle: the hustle to earn a living.
21. a fast, lively, popular ballroom dance evolving from Latin American, swing, rock, and disco dance styles, with a strong basic rhythm and simple step pattern augmented by strenuous turns, breaks, etc.
Hustle Harder!!!!
It stuck in my mind and made me think how American that saying really is today...so to look up hustle is this blog..for today.
hustle - 4 dictionary results
hus⋅tle /ˈhʌsəl/ Show Spelled Pronunciation [huhs-uhl] Show IPA verb, -tled, -tling, noun
Use hustle in a Sentence
See web results for hustle
See images of hustle
–verb (used without object) 1. to proceed or work rapidly or energetically: to hustle about putting a house in order.
2. to push or force one's way; jostle or shove.
3. to be aggressive, esp. in business or other financial dealings.
4. Slang. to earn one's living by illicit or unethical means.
5. Slang. (of a prostitute) to solicit clients.
–verb (used with object) 6. to convey or cause to move, esp. to leave, roughly or hurriedly: They hustled him out of the bar.
7. to pressure or coerce (a person) to buy or do something: to hustle the customers into buying more drinks.
8. to urge, prod, or speed up: Hustle your work along.
9. to obtain by aggressive or illicit means: He could always hustle a buck or two from some sucker.
10. to beg; solicit.
11. to sell in or work (an area), esp. by high-pressure tactics: The souvenir venders began hustling the town at dawn.
12. to sell aggressively: to hustle souvenirs.
13. to jostle, push, or shove roughly.
14. Slang. to induce (someone) to gamble or to promote (a gambling game) when the odds of winning are overwhelmingly in one's own favor.
15. Slang. to cheat; swindle: They hustled him out of his savings.
16. Slang. a. (of a prostitute) to solicit (someone).
b. to attempt to persuade (someone) to have sexual relations.
c. to promote or publicize in a lively, vigorous, or aggressive manner: an author hustling her new book on the TV talk shows.
–noun 17. energetic activity, as in work.
18. discourteous shoving, pushing, or jostling.
19. Slang. a. an inducing by fraud, pressure, or deception, esp. of inexperienced or uninformed persons, to buy something, to participate in an illicit scheme, dishonest gambling game, etc.
b. such a product, scheme, gambling game, etc.
20. Informal. a competitive struggle: the hustle to earn a living.
21. a fast, lively, popular ballroom dance evolving from Latin American, swing, rock, and disco dance styles, with a strong basic rhythm and simple step pattern augmented by strenuous turns, breaks, etc.
Tuesday, October 6, 2009
Turn Small Savings Into a Big Nest Egg
Turn Small Into a Big Nest Egg
by Marv Dumon
Monday, October 5, 2009
provided by
According to the U.S. Bureau of Economic Analysis, the personal savings rate of Americans has ranged between -1% and approximately 4% between the years 2005 and 2009. Americans' nonchalance was reflected in the negative savings rate of fiscal 2005, which occurred as people reduced their savings and delved further into debt in order to purchase goods and services. Although the savings rate had rebounded to 6% by May of 2009, as global financial crisis forced many consumers to adopt more cautious spending habits. Despite the about-face in consumer spending habits, in many cases, the attempt at saving proved too little, too late. Read on to find out why you need to save no matter what the economic climate.
Why You Need to Save
More from Investopedia.com:
• How to Make Your First $1 Million
• 6 Traits That You Can Adopt
• 10 Retirement-Wrecking Moves
While individuals should avoid excess (and high interest) leverage/debt and prudently manage cash flow, there is also a longer-term need to ensure one has adequate funding set aside for a comfortable retirement. Given historical trends in the U.S. stock market and overall economic performance, people can be lulled into becoming overly optimistic about how much they need to save and their projected life expectancy. The only trends that are relevant for the individual, however, are those that occur over the course of one's lifetime.
Many companies are transitioning jobs (such as back office functions, IT, research and even higher margin services such as consulting and financial services) to other regions of the world, including Eastern Europe, India and China. The economic dynamics and implications of such movement are not comparable to the business settings of the past 50 years. Additionally, medical breakthroughs and other health-related variables have increased people's life expectancy. Certainly, it is better to have a conservative outlook in order to help ensure one has adequate retirement funds.
Financial Scenarios
Saving money and diverting cash away from unnecessary frills and wasteful spending into investment payments such as the stock market translate to huge differences in the size of one's retirement savings over the course of a lifetime. When you purchase a bicycle or go out for a lavish dinner, you are not simply incurring a cost of that bike or dinner (say $100). The amount of the receipt is actually misleading. When you incorporate the basic laws of finance, the opportunity cost of that $100 is much more.
If you eliminate $100 of wasteful spending per month and instead channel that cash to an investment vehicle that yields an annual interest rate of 10%, that translates to more than $75,000 over 20 years, and more than $500,000 over the course of 40 years. Granted, the buying power of figure is chewed up by inflation, but the prudent person still reaps the benefits of not wasting cash on unnecessary things.
Starting principal balance: $0
Monthly investment payments: $100
Interest rate: 10%
Future value: 20 years = $75,936
Future value: 40 years = $632,408
Starting principal balance: $0
Monthly investment payments: $250
Interest rate: 10%
Future value: 20 years = $189,842
Future value: 40 years = $1,581,019
If someone were motivated enough to find $500 a month and put it away in the form of investment payments, the results lead to an exponential increase in comfort during one's retirement. With an annual rate of return of 10% over 40 years, the figure approaches $3 million for your nest egg.
Starting principal balance: $0
Monthly investment payments: $500
Interest rate: 10%
Future value: 20 years = $379,684
Future value: 40 years = $3,162,039
How much more would your nest egg be if you work for a company that matches your 401(k) dollar for dollar up to a certain amount? Given that the federal government's social safety net programs such as Social Security and Medicare are expected to hit fiscal challenges as the baby boomers retire, such anticipated uncertainties encourage individuals to take their retirement circumstances into their own hands. Secondly, the high cost of healthcare in the United States is a primary driver for individuals and couples filing for personal bankruptcy. The power of compound interest can help one to avoid financial straits in the future.
From Wasteful Expenses to Monthly Investment
To redirect cash that might otherwise be spent on junk or unnecessary spending, explore savings opportunities that can increase your monthly contributions to your retirement accounts. These might include:
1.Fewer restaurant lunches and dinners can easily save the typical professional between $100 and $200 per month. Using our numbers above, $100 invested monthly in retirement accounts that earn 10% annually becomes $75,000 in 20 years.
2.Purchase discipline at groceries and malls. At the end of your life, it is not the accumulation of objects that provides meaning. A lifetime habit of impulse buying has a tremendous opportunity cost when you realize the power of compound interest. Most people can save between a hundred dollars to several hundred dollars a month with greater spending discipline.
The Bottom Line
If you work for a company that matches your retirement savings contributions, absolutely take advantage of it. It is basically free money. Additionally, the increase in monthly contributions translates into an exponentially larger nest egg over the course of a lifetime.
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.More from Yahoo! Sources
by Marv Dumon
Monday, October 5, 2009
provided by
According to the U.S. Bureau of Economic Analysis, the personal savings rate of Americans has ranged between -1% and approximately 4% between the years 2005 and 2009. Americans' nonchalance was reflected in the negative savings rate of fiscal 2005, which occurred as people reduced their savings and delved further into debt in order to purchase goods and services. Although the savings rate had rebounded to 6% by May of 2009, as global financial crisis forced many consumers to adopt more cautious spending habits. Despite the about-face in consumer spending habits, in many cases, the attempt at saving proved too little, too late. Read on to find out why you need to save no matter what the economic climate.
Why You Need to Save
More from Investopedia.com:
• How to Make Your First $1 Million
• 6 Traits That You Can Adopt
• 10 Retirement-Wrecking Moves
While individuals should avoid excess (and high interest) leverage/debt and prudently manage cash flow, there is also a longer-term need to ensure one has adequate funding set aside for a comfortable retirement. Given historical trends in the U.S. stock market and overall economic performance, people can be lulled into becoming overly optimistic about how much they need to save and their projected life expectancy. The only trends that are relevant for the individual, however, are those that occur over the course of one's lifetime.
Many companies are transitioning jobs (such as back office functions, IT, research and even higher margin services such as consulting and financial services) to other regions of the world, including Eastern Europe, India and China. The economic dynamics and implications of such movement are not comparable to the business settings of the past 50 years. Additionally, medical breakthroughs and other health-related variables have increased people's life expectancy. Certainly, it is better to have a conservative outlook in order to help ensure one has adequate retirement funds.
Financial Scenarios
Saving money and diverting cash away from unnecessary frills and wasteful spending into investment payments such as the stock market translate to huge differences in the size of one's retirement savings over the course of a lifetime. When you purchase a bicycle or go out for a lavish dinner, you are not simply incurring a cost of that bike or dinner (say $100). The amount of the receipt is actually misleading. When you incorporate the basic laws of finance, the opportunity cost of that $100 is much more.
If you eliminate $100 of wasteful spending per month and instead channel that cash to an investment vehicle that yields an annual interest rate of 10%, that translates to more than $75,000 over 20 years, and more than $500,000 over the course of 40 years. Granted, the buying power of figure is chewed up by inflation, but the prudent person still reaps the benefits of not wasting cash on unnecessary things.
Starting principal balance: $0
Monthly investment payments: $100
Interest rate: 10%
Future value: 20 years = $75,936
Future value: 40 years = $632,408
Starting principal balance: $0
Monthly investment payments: $250
Interest rate: 10%
Future value: 20 years = $189,842
Future value: 40 years = $1,581,019
If someone were motivated enough to find $500 a month and put it away in the form of investment payments, the results lead to an exponential increase in comfort during one's retirement. With an annual rate of return of 10% over 40 years, the figure approaches $3 million for your nest egg.
Starting principal balance: $0
Monthly investment payments: $500
Interest rate: 10%
Future value: 20 years = $379,684
Future value: 40 years = $3,162,039
How much more would your nest egg be if you work for a company that matches your 401(k) dollar for dollar up to a certain amount? Given that the federal government's social safety net programs such as Social Security and Medicare are expected to hit fiscal challenges as the baby boomers retire, such anticipated uncertainties encourage individuals to take their retirement circumstances into their own hands. Secondly, the high cost of healthcare in the United States is a primary driver for individuals and couples filing for personal bankruptcy. The power of compound interest can help one to avoid financial straits in the future.
From Wasteful Expenses to Monthly Investment
To redirect cash that might otherwise be spent on junk or unnecessary spending, explore savings opportunities that can increase your monthly contributions to your retirement accounts. These might include:
1.Fewer restaurant lunches and dinners can easily save the typical professional between $100 and $200 per month. Using our numbers above, $100 invested monthly in retirement accounts that earn 10% annually becomes $75,000 in 20 years.
2.Purchase discipline at groceries and malls. At the end of your life, it is not the accumulation of objects that provides meaning. A lifetime habit of impulse buying has a tremendous opportunity cost when you realize the power of compound interest. Most people can save between a hundred dollars to several hundred dollars a month with greater spending discipline.
The Bottom Line
If you work for a company that matches your retirement savings contributions, absolutely take advantage of it. It is basically free money. Additionally, the increase in monthly contributions translates into an exponentially larger nest egg over the course of a lifetime.
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Monday, October 5, 2009
REPOST...The Glass is full for some
For young, recession offers deals of a lifetime
Buzz up!122 votes Send
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Delicious Digg Facebook Fark Newsvine Reddit StumbleUpon Technorati Twitter Yahoo! Bookmarks .Print .. AP – Investor Daniel Lee, 30, poses for a photo in Scottsdale, Ariz., Monday, Oct. 5, 2009. Lee has taken …
.Economy Video:7News: Rates set to rise Australia 7 News .
Play Video Economy Video:Ford CEO: Matching Production with Economy FOXBusiness .
Related Quotes Symbol Price Change
MTLQQ 0.00 0.00
^GSPC 1,040.46 0.00
^IXIC 2,068.15 +20.04
By CHIP CUTTER, AP Business Writer Chip Cutter, Ap Business Writer – Mon Oct 5, 5:09 pm ET
NEW YORK – The Great Recession has turned into the best of times for young investor Daniel Lee.
Early this year, the 30-year-old salesman in Scottsdale, Ariz., shelved expensive meals and vacation plans and threw "every spare dollar" into the stock market. The value of his portfolio has more than tripled as the market has rallied since March.
"This is like buying a swim suit in the fall or a winter jacket in the spring," he says. "Get in while it's a good deal."
Halfway across the country in Detroit, retiree Irvin Hall, 70, is living through the recession in a different way.
His mutual funds fell 35 percent during the stock market plunge that started last fall and continued for six months, and his monthly pension from General Motors dropped by 10 percent. He and his wife pay more for health care and medicine after the company reduced his insurance benefits.
"It takes your mind a while to really adjust to this," he says. "You're expecting, hey, I'm set for life, and then all of a sudden that's taken away."
The plight of baby boomers and retirees has been well-documented in the year after the financial meltdown. But for people in their 20s and 30s who have a good job and feel it's secure, this is the best of times. Many were renters and had little or no money in the stock market. They didn't take a six-figure hit to the value of a home or 401(k) account. Now they're positioned to invest at prices no one would have believed during the boom years.
Home prices are down 30 percent, on average, and 50 percent or more in some markets. The Standard & Poor's 500 stock index is nearly 34 percent below its record high in October 2007.
Young people are benefiting in other ways, too. The Cash for Clunkers program allowed them to trade in beaten-up used cars and buy new ones at a discount. "They're never going to see that again," says John Rogin, who owns a Buick dealership in Livonia, Mich.
The Consumer Price Index has recorded a rare drop over the past 12 months — 1.5 percent. And the decline for many goods and services has been much greater, allowing young people to put even more money into stocks and housing.
"This is a historic time," says George Jaramillo, 35, a business analyst in Atlanta, who recently purchased three homes, including two at foreclosure prices. "It's a great opportunity to make some great gains in the future."
Besides low prices, many have been spurred by low interest rates and a tax credit of up to $8,000 for first-time homebuyers. First-timers, many between 25 and 34, accounted for about 45 percent of home sales at the end of July, a figure that has risen steadily over the past two years, says Walter Molony, a spokesman with the National Association of Realtors. Only 39 percent of adults under 35 are homeowners, compared with 80 percent of those over 55, according to the U.S. Census Bureau. So the opportunity for those in their 20s and 30s to take advantage of the real estate crash is greater than for any other age group.
Young people also got a break with the stock market. Even with the surge since it hit a 12-year low on March 9, the S&P 500 index is nearly 30 percent lower than it was at the end of 1999. A recent study by T. Rowe Price, a money management company, highlights the benefits that young people can receive from investing in a down market.
The study compared how returns differ if someone starts investing during a weak decade for stocks that's followed by a strong one — and vice versa. Somebody who invested $500 a month in a fund replicating the S&P 500 starting in 1970 and continuing through the bull market of the 1980s would have ended 1989 with $589,707 — for an annualized rate of return of 11.5 percent.
The 1970s were characterized by high inflation and high unemployment and a flat market, setting the stage for the 1980s when the S&P 500 tripled.
If the decades are reversed, and the strong years of the 1980s were followed by the 1970s bear market, the account would be valued at $358,972, even though the annual rate of return would still be 11.5 percent. The difference is that the investor in the first situation would have been buying more shares of stock each month during the bad years of the '70s.
"We need to be shouting from the rooftops that this is not the time to get out of the market if you're young," says Christine Fahlund, a senior financial planner with T. Rowe Price. "This is the time to be in the market."
For young people to take advantage of deals, however, they need to have a job — and cash. Neither is a given.
The unemployment rate for workers ages 20 to 24 jumped to 14.9 percent in September, up from 10.8 percent in the same month a year ago. Unemployment for those 25 to 34 is 10.6 percent, almost a point above the rate of 9.8 percent for people of all ages.
And the skyrocketing cost of undergraduate education means graduating seniors who borrowed money for tuition enter the work force with an average of $23,118 in student-loan debt, according to the Department of Education. About 65 percent of students take out a loan to finance their education.
Plenty of people, though, are taking advantage of this recession's generation gap. Ann Seiden, 28, bought a home in Phoenix last November for 15 percent below the asking price.
Some people are casualties of the recession, she says. "And there are those who have kind of seized on the opportunities in it."
Buzz up!122 votes Send
Email IM .Share
Delicious Digg Facebook Fark Newsvine Reddit StumbleUpon Technorati Twitter Yahoo! Bookmarks .Print .. AP – Investor Daniel Lee, 30, poses for a photo in Scottsdale, Ariz., Monday, Oct. 5, 2009. Lee has taken …
.Economy Video:7News: Rates set to rise Australia 7 News .
Play Video Economy Video:Ford CEO: Matching Production with Economy FOXBusiness .
Related Quotes Symbol Price Change
MTLQQ 0.00 0.00
^GSPC 1,040.46 0.00
^IXIC 2,068.15 +20.04
By CHIP CUTTER, AP Business Writer Chip Cutter, Ap Business Writer – Mon Oct 5, 5:09 pm ET
NEW YORK – The Great Recession has turned into the best of times for young investor Daniel Lee.
Early this year, the 30-year-old salesman in Scottsdale, Ariz., shelved expensive meals and vacation plans and threw "every spare dollar" into the stock market. The value of his portfolio has more than tripled as the market has rallied since March.
"This is like buying a swim suit in the fall or a winter jacket in the spring," he says. "Get in while it's a good deal."
Halfway across the country in Detroit, retiree Irvin Hall, 70, is living through the recession in a different way.
His mutual funds fell 35 percent during the stock market plunge that started last fall and continued for six months, and his monthly pension from General Motors dropped by 10 percent. He and his wife pay more for health care and medicine after the company reduced his insurance benefits.
"It takes your mind a while to really adjust to this," he says. "You're expecting, hey, I'm set for life, and then all of a sudden that's taken away."
The plight of baby boomers and retirees has been well-documented in the year after the financial meltdown. But for people in their 20s and 30s who have a good job and feel it's secure, this is the best of times. Many were renters and had little or no money in the stock market. They didn't take a six-figure hit to the value of a home or 401(k) account. Now they're positioned to invest at prices no one would have believed during the boom years.
Home prices are down 30 percent, on average, and 50 percent or more in some markets. The Standard & Poor's 500 stock index is nearly 34 percent below its record high in October 2007.
Young people are benefiting in other ways, too. The Cash for Clunkers program allowed them to trade in beaten-up used cars and buy new ones at a discount. "They're never going to see that again," says John Rogin, who owns a Buick dealership in Livonia, Mich.
The Consumer Price Index has recorded a rare drop over the past 12 months — 1.5 percent. And the decline for many goods and services has been much greater, allowing young people to put even more money into stocks and housing.
"This is a historic time," says George Jaramillo, 35, a business analyst in Atlanta, who recently purchased three homes, including two at foreclosure prices. "It's a great opportunity to make some great gains in the future."
Besides low prices, many have been spurred by low interest rates and a tax credit of up to $8,000 for first-time homebuyers. First-timers, many between 25 and 34, accounted for about 45 percent of home sales at the end of July, a figure that has risen steadily over the past two years, says Walter Molony, a spokesman with the National Association of Realtors. Only 39 percent of adults under 35 are homeowners, compared with 80 percent of those over 55, according to the U.S. Census Bureau. So the opportunity for those in their 20s and 30s to take advantage of the real estate crash is greater than for any other age group.
Young people also got a break with the stock market. Even with the surge since it hit a 12-year low on March 9, the S&P 500 index is nearly 30 percent lower than it was at the end of 1999. A recent study by T. Rowe Price, a money management company, highlights the benefits that young people can receive from investing in a down market.
The study compared how returns differ if someone starts investing during a weak decade for stocks that's followed by a strong one — and vice versa. Somebody who invested $500 a month in a fund replicating the S&P 500 starting in 1970 and continuing through the bull market of the 1980s would have ended 1989 with $589,707 — for an annualized rate of return of 11.5 percent.
The 1970s were characterized by high inflation and high unemployment and a flat market, setting the stage for the 1980s when the S&P 500 tripled.
If the decades are reversed, and the strong years of the 1980s were followed by the 1970s bear market, the account would be valued at $358,972, even though the annual rate of return would still be 11.5 percent. The difference is that the investor in the first situation would have been buying more shares of stock each month during the bad years of the '70s.
"We need to be shouting from the rooftops that this is not the time to get out of the market if you're young," says Christine Fahlund, a senior financial planner with T. Rowe Price. "This is the time to be in the market."
For young people to take advantage of deals, however, they need to have a job — and cash. Neither is a given.
The unemployment rate for workers ages 20 to 24 jumped to 14.9 percent in September, up from 10.8 percent in the same month a year ago. Unemployment for those 25 to 34 is 10.6 percent, almost a point above the rate of 9.8 percent for people of all ages.
And the skyrocketing cost of undergraduate education means graduating seniors who borrowed money for tuition enter the work force with an average of $23,118 in student-loan debt, according to the Department of Education. About 65 percent of students take out a loan to finance their education.
Plenty of people, though, are taking advantage of this recession's generation gap. Ann Seiden, 28, bought a home in Phoenix last November for 15 percent below the asking price.
Some people are casualties of the recession, she says. "And there are those who have kind of seized on the opportunities in it."
Friday, October 2, 2009
worrry about that October 15 escrow deadline?
Forget about short sales
A short sale occurs when a homeowner is no longer able to make their mortgage payments and owes more on their home loan than what it can fetch in the current market.
They’re attractive from a price point, but they can take months to close. So if you’re after the tax credit, “you have no business looking at short sales,” says Steven Senter, a real estate broker and the owner of Keller Williams Fox Valley Realty in St. Charles, Ill. When making an offer on a short sale, not only does the seller have to accept the offer, but the bank must accept and approve it too – and that can take a while. “There’s no guarantee on when the bank is going to approve it – it may approve it in 30 days, maybe in 300 days,” Senter says.
A short sale occurs when a homeowner is no longer able to make their mortgage payments and owes more on their home loan than what it can fetch in the current market.
They’re attractive from a price point, but they can take months to close. So if you’re after the tax credit, “you have no business looking at short sales,” says Steven Senter, a real estate broker and the owner of Keller Williams Fox Valley Realty in St. Charles, Ill. When making an offer on a short sale, not only does the seller have to accept the offer, but the bank must accept and approve it too – and that can take a while. “There’s no guarantee on when the bank is going to approve it – it may approve it in 30 days, maybe in 300 days,” Senter says.
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