Sunday, February 27, 2011
Thursday, February 4, 2010
Launch of The Big Pay-off on Facebook
Tonight I launched The Big Pay-Off on Facebook. I am looking forward to the comments, suggestions and stories related to paying off debt, increasing incomes and finding better investments, but more than anything else, drowning out the negative noise and helping each other ring in a brighter 'financial' tomorrow.
Thursday, January 28, 2010
How To Prosper In The New Economy
How To Prosper In The ‘New Economy’ When Your
Home Mortgage is Weighing You Down
A recent poll shows that challenging economic times has home owners realigning their priorities. Dramatic declines in housing prices are causing bewildered home owners to wonder if they have financed the American Dream or the American Nightmare. With drops in value by as much as 40% in some areas, they are left wondering if they will ever see their equity again.
In addition, lending guidelines have tightened to the point where even the most credit worthy borrowers are being faced with additional hoops to jump through in order to get a home loan. The combination of the two factors has the average home owner wondering how to get out from under the weight of a mortgage that may be causing concerns over their loss of equity, funding college or retirement plans or even facing the hectic stresses of every day life.
A ‘New Economy’
The first thing to realize if you are a home owner faced with concerns over your home value, mortgage or other debt, is that we have entered a ‘New Economy’. The ‘boom’ years are gone for now and we have entered a period described by economic expert Harry Dent as a “long economic winter”. This means that you should not expect a quick return to prior values in both housing and stocks, thus relying on the markets to create equity or build wealth.
The New Economy doesn’t mean that you cannot prosper. What it does require, however, is a change in our thinking and habits related to our mortgage, debt and savings/ investments. It is forcing us to focus on self-reliance and self-accountability for determining our own financial destinies. Here are some tips for finding ways to prosper in this new environment:
Create A Plan. Depending on your age, income, and lifestyle you have to decide how you will re-capture your equity. Will you aggressively pay-off debt or will you increase your savings and/or investment contributions?
Understand The Meaning of RISK. The biggest wake-up call that the ‘New Economy’ has provided is that ALL markets be extremely volatile, including housing. Even more importantly, it has taught us that every investment (including our home) has the potential to lose substantial, if not all of the money we place in it. This makes it even more important to understand the relation between risk, timing and the use of leverage.
Establish A HIGHLY LIQUID Emergency Fund. Before you begin paying off debt or increasing savings/investments, plan for a minimal amount of readily available reserves. The days of borrowing on lines of credit or home equity loans for essentials or emergencies have all but disappeared.
Set Realistic Time Frames. Regardless if you decide on an aggressive debt reduction strategy for your mortgage or increased savings and investments, eventually using the extra accumulated funds to pay-off your loan, make sure that you evaluate your risk tolerances appropriately and the length of time you have available to reasonably accomplish your goal. Remember that it may have taken a number of years to have accumulated your original down payment and that you should give yourself a realistic time frame to re-build that equity.
Cut Expenses. By cutting household and lifestyle expenses you will find more free cash flow to contribute to your plan, increasing your ability to replace lost equity or wealth quicker.
Find More Cash Flow. While cutting expenses is a great way to find more cash flow, adding supplemental income can help turbo-charge your recovery. Temporary part-time jobs, consulting, selling ‘widgets’ for a local small business on commission, or even starting a small boot-strap business; all present fantastic opportunities to provide additional income.
If your income has been affected by a job loss or lack of business, keep faith by knowing “that this too shall pass”, and that a brighter income opportunity is awaiting.
Discipline & Consistency. When I review the 6 steps above with my clients, they are usually shocked to see that the average person can be COMPLETELY out of debt in only 12.9 years, including their mortgage. The plan to re-capture your equity or build wealth is not difficult. It simply requires you to maintain the discipline and consistency to accomplish your goal.
The changes we have seen in our economy may feel painful on a temporary basis, but the long term affects are healthy. Whether it is re-aligning family priorities, searching for new career opportunities, furthering our education, or streamlining our business, we are rising to a new level of economic awareness that will empower and enable us to control our financial futures.
Home Mortgage is Weighing You Down
A recent poll shows that challenging economic times has home owners realigning their priorities. Dramatic declines in housing prices are causing bewildered home owners to wonder if they have financed the American Dream or the American Nightmare. With drops in value by as much as 40% in some areas, they are left wondering if they will ever see their equity again.
In addition, lending guidelines have tightened to the point where even the most credit worthy borrowers are being faced with additional hoops to jump through in order to get a home loan. The combination of the two factors has the average home owner wondering how to get out from under the weight of a mortgage that may be causing concerns over their loss of equity, funding college or retirement plans or even facing the hectic stresses of every day life.
A ‘New Economy’
The first thing to realize if you are a home owner faced with concerns over your home value, mortgage or other debt, is that we have entered a ‘New Economy’. The ‘boom’ years are gone for now and we have entered a period described by economic expert Harry Dent as a “long economic winter”. This means that you should not expect a quick return to prior values in both housing and stocks, thus relying on the markets to create equity or build wealth.
The New Economy doesn’t mean that you cannot prosper. What it does require, however, is a change in our thinking and habits related to our mortgage, debt and savings/ investments. It is forcing us to focus on self-reliance and self-accountability for determining our own financial destinies. Here are some tips for finding ways to prosper in this new environment:
Create A Plan. Depending on your age, income, and lifestyle you have to decide how you will re-capture your equity. Will you aggressively pay-off debt or will you increase your savings and/or investment contributions?
Understand The Meaning of RISK. The biggest wake-up call that the ‘New Economy’ has provided is that ALL markets be extremely volatile, including housing. Even more importantly, it has taught us that every investment (including our home) has the potential to lose substantial, if not all of the money we place in it. This makes it even more important to understand the relation between risk, timing and the use of leverage.
Establish A HIGHLY LIQUID Emergency Fund. Before you begin paying off debt or increasing savings/investments, plan for a minimal amount of readily available reserves. The days of borrowing on lines of credit or home equity loans for essentials or emergencies have all but disappeared.
Set Realistic Time Frames. Regardless if you decide on an aggressive debt reduction strategy for your mortgage or increased savings and investments, eventually using the extra accumulated funds to pay-off your loan, make sure that you evaluate your risk tolerances appropriately and the length of time you have available to reasonably accomplish your goal. Remember that it may have taken a number of years to have accumulated your original down payment and that you should give yourself a realistic time frame to re-build that equity.
Cut Expenses. By cutting household and lifestyle expenses you will find more free cash flow to contribute to your plan, increasing your ability to replace lost equity or wealth quicker.
Find More Cash Flow. While cutting expenses is a great way to find more cash flow, adding supplemental income can help turbo-charge your recovery. Temporary part-time jobs, consulting, selling ‘widgets’ for a local small business on commission, or even starting a small boot-strap business; all present fantastic opportunities to provide additional income.
If your income has been affected by a job loss or lack of business, keep faith by knowing “that this too shall pass”, and that a brighter income opportunity is awaiting.
Discipline & Consistency. When I review the 6 steps above with my clients, they are usually shocked to see that the average person can be COMPLETELY out of debt in only 12.9 years, including their mortgage. The plan to re-capture your equity or build wealth is not difficult. It simply requires you to maintain the discipline and consistency to accomplish your goal.
The changes we have seen in our economy may feel painful on a temporary basis, but the long term affects are healthy. Whether it is re-aligning family priorities, searching for new career opportunities, furthering our education, or streamlining our business, we are rising to a new level of economic awareness that will empower and enable us to control our financial futures.
Subscribe to:
Comments (Atom)
