Investing for Retirement - Real Estate
Real estate prices are falling, stock prices are falling, so where can I put my money? While few people have money to play with these days, it doesn’t take a lot now to have some nice savings later.
Yes, market prices are dropping. While this isn’t a great market for people trying to sell, it is great if you have money to spend and it doesn’t cost as much as you might think.
Real Estate Auctions. If you have some money set aside for a down payment, consider checking out auctions. You can get some excellent deals as long as you have money for the initial payment and can come up with a mortgage or the remaining balance within 30 days of the close of the auction.
http://www.williamsauction.com/ This website has auctions on a monthly basis with some properties starting at $1,000. While the lower end auctions often need rehab work, if you are not interested in rehabbing, there are plenty of other properties in very good condition. Check back every month for the new properties because while there might not be something you are interested in one month, the next month there might be several.
When attending auctions in person or online, you need to first check out the property you are interested in. Look for any repairs that will be needed to modify the property for your needs. If you are going to rent out the property, does it have appliances, are new carpets needed, what repairs are necessary to make it hospitable. You need to take all these costs into consideration when determining how much you are willing to bid on the property. Once you know all these expenses, determine what you are willing to bid and stand firm. In these auction settings it is easy to get caught up in the excitement and desire to win, however, you can’t let that cloud your judgment. Once you have determined what you would like to pay, you should also determine the absolute most you would be willing to pay and still be profitable.
Real estate auctions can be a great way to find a vacation home at a great price or to start developing a few properties to rent out for some extra income.
Discharge of Debt - Cutting my Credit Card Bills
There are many companies out there offering ways to reduce credit card debt. While this sounds like a great idea, you need to get more details. After all, if it sounds too good to be true, it probably is.
What these companies are not likely to tell you is that they usually reduce your income by getting the credit card companies to discharge some of your debt. Which may sound great but will have a very negative effect on your credit score. Thus, while it may help you in the short term, in the long term doing this will result in higher interest rates the next time you try to get a card, vehicle, or house.
In the past, many people dealt with credit card debt by taking out second mortgages on their house to pay off the debt. Now, however, it is difficult if not impossible to do that in many states due to the declining home values and reluctance of banks to lend money.
The best way to get rid of debt without negatively affecting your credit score is to not accumulate debt in the first place. However, if you do have the debt, you need to come up with a plan to get rid of it. Start budgeting to pay a certain amount of the credit card each month and don’t put anything extra on the card. It is nearly impossible to pay off a large credit card debt if you keep putting more debt on the card. While that can be very tempting this time of year, to get ahead you have to say no.
One way to keep from spending on your cards is to keep them in a safe or drawer rather than your purse. If the credit card isn’t always right there tempting you to use it, you will be more likely to just buy spend wisely because you know the money is coming directly out of your account rather than thinking about a bill that will have to be paid someday in the future.
Once you get out of the habit of reaching for the card for impulse purchases, you will be amazed to realize that you don’t really need the credit card as much as you thought. Try living without a credit card for 3 months. At the end of that time, you will likely realize that you haven’t even missed it and that your finances are in a better position because you are watching your spending more carefully.
The best way to get rid of credit card debt is to not have it in the first place, but if you do have debt that you need to get rid of, put the card in a place you won’t be tempted or cut it up. Then, set aside some money each month to start paying down the balance. I would also recommend using any extra money you receive such as your income tax return or some extra cash from friends or your boss at Christmas to pay down a little extra on the debt. Life really is much simpler and less stressful without the debt. Try it and I’m sure you will feel the same.
Why Should I Hire a Seattle Real Estate Attorney?
In every real estate transaction there are a wide variety of legal issues that must be taken care of. Contracts should always be reviewed by an attorney who understands the nuances of real estate law. But there are also state specific State laws to contend with. A Seattle real estate lawyer deals with a large number of State legal issues related to acquiring, financing, developing, managing, constructing, leasing and selling residential and commercial property of all kinds. A Seattle real estate attorney will fully inform you of your options, advise you of any consequences, and protect your legal interests
Below are some reasons you should consider retaining a Seattle attorney (Seattle Law Firm) for your real estate transactio
● Real estate closings bring all interested parties together. They involve the execution and delivery of all necessary documents at the same time as the payment of the purchase price and the settlement costs of the deal. While this may seem like a simple process, handling a real estate closing is a complicated matter and requires a thorough knowledge of the law. This is why sellers and purchasers need to hire a reputable Seattle real estate attorney to orchestrate the transaction.
● Seattle real estate lawyers deal with tax implications for those buying and selling property
● An experienced Seattle real estate lawyer can help you keep your property out of probate court by setting up a living trust for you to pass your property directly to your intended heirs.
● Real estate attorneys can protect you from costly mistakes, errors in the documents, errors in the figures and other problems that could lead to litigation or other expensive legal action.
● A real estate lawyer represents all parties involved in real estate transactions, for both residential and commercial properties.
● A real estate attorney also represents and assists business entities in a variety of commercial real estate issues.
● A Seattle attorney can help you with issues including real estate investment opportunities, real estate construction and development, landlord/tenant matters, zoning, financing or refinancing, and mortgages and foreclosures.
There are non-legal services that claim they can do all the legal work you need. If you’re tempted to save a few bucks this way, remember that lawyers belong to a regulated profession with standards they must meet and insurance to cover damages if they make an error or omission. You don’t necessarily have the same standards or recourse dealing with other advisors. And this isn’t the time to “do-it-yourself”. Although many legal forms used in real estate are similar, binder or purchase and sale agreement forms do vary from state to state. So if you intend to engage in a real estate transaction, retaining a Seattle real estate attorney, or Seattle law firm, will insure that all facets of your real estate transaction will be reviewed based on Washington state laws. Furthermore, some title insurance companies and mortgage lenders require you to use an attorney to ensure that, among other things, the title is good, there are no liens against the property, and that the deal will close as anticipated.
A Seattle real estate attorney’s role can be as broad as you want. And while it is not typical in a real estate transaction, you can ask your Seattle attorney to describe his or her work and fees in writing before you proceed. Whether you are a sophisticated businessperson with significant real estate experience, or a first-time homeowner, you can count on a qualified Seattle attorney experienced in real estate law to protect your interests during your real estate transaction. Do not close a real estate transaction unprepared!
John M. Adams has worked as a Seattle attorney for the past 20 years. He practices as a Seattle real estate attorney advising clients in need of a Seattle law firm for their real estate transactions.
Be Your Own Boss
It’s a great time to take a bad situation and make it into something good. Many people are using this economic downturn as their opportunity to fulfill dreams of starting their own business or changing careers. But can I realistically make a career change like that in this economy and still be able to pay the bills?
Where Should I Get My Training?
Colleges across the country are reporting record enrollments as people of all ages are going back to school to enhance their current degree and knowledge or to learn an entirely different set of job skills. Many local community colleges and technical schools are offering great courses that allow students to get the training necessary for certification in areas such as beautician, computer technology, auto repair and many more for a fraction of the cost of attending state or private schools. In addition, many also offer evening courses so you can work during the day and still attend classes.
What Areas Should I Focus On?
1. Repairs
At the moment money is tight. As such, people are going to be more likely to repair their vehicles and appliances than spend the money for brand new items. Anything along this line should be a safe bet for the next few years.
2. Necessities
While I may not have the extra money to get my nails done, my hair keeps growing. While people may not come in as often for haircuts and longer hairstyles may come into fashion, people will still need haircuts and trims. Thus, some beautician fields might be worth considering.
3. Fountain of Youth
Also, I think botox injections and other fountain of youth areas will continue to flourish as women will try to look younger in order to snag the jobs they want. In this market it is going to be a tough fight for jobs and women are going to want every advantage they can get, whether real or artificial.
4. Niche Markets
Many larger firms may try to save money in this economy by outsourcing. Thus, smaller firms that handle payroll and customer relations may increase. If these firms will handle these areas for less than the larger firms are currently paying in space to house their staff, salaries and benefits, etc., the firms are going to consider outsourcing as a way to save money.
Beat the Taxman
It’s getting closer to the end of the year which means the end of the tax year as well. So how can I make a few last minute changes to lower my tax debt?
Charitable Contributions
For those with a little extra cash, this is the best time to make charitable contributions. Not only is that a great way to help others out in need this holiday season, but 50% of the charitable contributions made can reduce your income. The best part, Uncle Sam doesn’t care what time of year you made the contribution. Thus, you can use your money all year long and make a charitable contribution on December 31 and still get the same reduction in income as the person who made a contribution back in January or February. Thus, you get the use of the money for longer but still get the benefit of a charitable contribution.
IRA Contributions
Contributions made to a traditional IRA are another great way to reduce your tax bill. <!– /* Font Definitions */ @font-face {font-family:”Cambria Math”; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:0; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:-1610611985 1107304683 0 0 159 0;} @font-face {font-family:Garamond; panose-1:2 2 4 4 3 3 1 1 8 3; mso-font-charset:0; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:647 0 0 0 159 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; mso-bidi-font-size:10.0pt; font-family:”Garamond”,”serif”; mso-fareast-font-family:”Times New Roman”; mso-bidi-font-family:”Times New Roman”;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.0in 1.0in 1.0in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –> Individuals age 49 and younger are allowed to contribute up to $5,000 a year and individuals 50 and older are allowed to contribute up to $6,000. These contributions to a traditional IRA are tax free. THus, the money you put into the IRA reduced your yearly gross income. However, you will be taxed when you take the money out of the IRA upon retirement.
Unreimbursed Business Expenses
If your job requires you to entertain clients, keep the receipts. Job related expenses like this should be documented, including who attended the event, what the event was for, and any business discussed. If your company doesn’t reimburse you for these expenses, you can deduct 50% of the expense from your taxes.
What if I get laid off?
Christmas is literally just around the corner and the market delivered more bad news today. In November a record 533,000 people lost their jobs and 1 in 10 families is behind on their mortgage. That doesn’t paint a very pretty picture of the economy or encourage must optimism in market forces. Instead, many people are wondering if they could be next. The best way to survive this economic crisis is to make a plan.
In several of the previous columns I mentioned the importance of budgeting, whether you are budgeting to ensure you have enough money to pay the bills, shop for Christmas, or save for retirement, budgeting is key. In this market, you also need to be budgeting for the rainy day possibility that you may become one of the thousands losing their jobs.
In the past when times got tough, Americans got plastic. Now, however, credit cards are increasing their fees and interest rates and reducing their credit limits because they are afraid of not being able to last this crisis either. Like it or not, Americans now need to prioritize their needs, learn how to budget, and start saving, which means eliminating the plastic unless you can afford to pay the entire bill when it comes due.
By prioritizing what you need from what you want, you may find that you can live without a few little comforts and use the money you would have spent on that to pay down your credit cards or save just in case the unthinkable happens and you do get laid off. The government can’t save everyone.
Retiring a Millionaire
Americans like to spend, we like to live comfortably, but we also want to enjoy life and be able to retire someday. So how can we do both? Every once in a while you hear stories about a person who made around $30,000 a year and then when he died donated a million dollars to some charity. So how did he do that and can I do the same?
Yes, if you are saving. Many of these stories about surprising wealth at retirement are from people who started saving early in life and saved continuously. If you set aside some money each paycheck and invest it in the stock market or other investments and don’t touch the money until retirement you can live very comfortably.
The key to saving is to not spend money on things you don’t need. Yes that sounds obvious but have you ever stopped to consider what you are spending your money on and what you are actually getting for the money. Instead of spending $30 taking your wife or girlfriend out to a movie, you can spend $1 and rent a movie at the local RedBox at your McDonald’s or Wal-Mart and microwave your own popcorn or just watch a movie together on the television. You aren’t slumming but you also aren’t wasting money either.
Also, the earlier you can start saving for retirement, the better. The earlier money is put into a savings or investment account, the more time it has to increase through interest, dividends, and appreciation. True most 20 year olds are not thinking about retirement but when they reach 55 they will wish they had though about it more as a 20 something.