Going, Going, Gone. House sold for $10,000!
Pinch me, I must be dreaming. A 4 bedroom 2.5 bath home with over 2,000 square feet built in 2006 is going on auction starting at $10,000. This isn’t just a rare deal, there are plenty of others available as well.
In this current market life is pretty tough if you don’t have any savings to fall back on. For those that do have a little cash lying around though, there are plenty of opportunities to invest for retirement. One of the best options that I have seen is the Florida housing market. Yes, house values are falling like crazy in Florida and getting a mortgage is incredibly difficult, however, rental rates have not fallen and people who have been foreclosed on still need a place to live.
The Cape Coral/Fort Myers area has 58 houses and 44 lots going up for auction this month. Many of these homes have never been lived in and the auctions are starting at $10,000 or $25,000 for houses and $1,000 for a lot. With so many homes being auctioned at once and the market already saturated, it is very possible that people will be walking away next weekend with a house for only $10,000 plus closing costs!
A quick check on Craigslist shows that houses in the area are renting for $950 a month for a house or $500 a month for a two bedroom condo. Even if you rent the house out for $500 a month, the potential for future earnings is enormous.
Florida isn’t the only area in the country with some great auctions going on. Check out the following website for more info.
http://www.williamsauction.com/Search/SearchResultsState.aspx?statusid=1&CategoryID=1&p=1.2
Achieve Financial Security
We live in a world of consumerism. We hardly save for the future, and we drown ourselves with debt further inhibiting our chances of saving for the future. Here are some ways to secure your future financially.
1. Kill your credit card debts: Before you can truly save for the future, you must make sure to kill your debts, credit cards in particular, as they have the highest of interest rates. Money tied with savings account will not grow much given the small interest rates from banks. But killing your debt now will put a plug on leakages or your payments to high interest rates. Focus on those with high balances and high interest rates. Alot bigger amounts, not just the minimum, on your credit card with the highest interest rate. Alot the minimum for the rest. Make sure that each month you pay all your credit cards. As soon as you pay off one credit card, transfer your payment from that card to the next one with the highest interest rate. In this way, you will be able to pay that card faster. While doing this, resist the temptation to charge payments via your credit cards. Put them in a freezer.
2. Treat your savings as an expense: As soon as you pay off all your debts, treat your savings as an expense or simply put, pay yourself first. Alot a certain percentage of your take home income as savings that will not be touch. Build at least three to six months of your disposable income and call this your emergency fund. You can put this in money market accounts or in a high-yielding savings account that can be easily withdrawn once the need arises.
3. Live below your means: Do this with proper budgeting and by focusing on necessities rather than wants. Strive to spend less than your income so you can have the money to save and to invest in the future. Pay for required things for daily living and avoid luxuries. Reasses your spending and you will find areas you can improve on, say avoiding that soda drink, which you consume weekly.
4. Make money work for you: By proper investing, you will be able to increase your wealth. A few rules to live by though. First, do not buy an investment you can not understand. Chances are you will never appreciate it and may actually lose money from it. Second, invest only excess money. This is money you saved outside of your emergency fund. Third, diversify your portofolio. Do not rely on a single investment. Diversifying reduces the risk associated with investing.
How to Become a Millionaire
Have you seen the “new ad” lately? Over night, you can become a millionaire! You can make thousands of dollars a day with a click of the button and without having to do hardly any work! You can have your dream vacation, live on the beach and spend time with your family.
Yeah right.
If you want to have good finances, don’t buy into what these guys are telling you. Instead, build your own way to being a millionaire.
I study millionaires a lot. Not the front guys, like Donald Trump, but the millionaires that are really living the lifestyle that they want. Without even having money, you can start to become a millionaire too. Here’s how to work your way up.
1. Be wealthy. Even if you are poor, you can find wealth in the small things and inside of yourself. One of the hard knocks that I’ve learned… whether you have money or not doesn’t make you rich. It’s how you feel that makes you wealthy. When you start to get that inner wealth, than there is a manifestation of possible money.
2. Think inside yourself, then outside of the box. Once you start seeing the inner wealth, you can physically change things. I truly believe that each of us has creativity and capabilities inside of us that help to build our own wealth. When we start finding out what we are supposed to do, that is when we become a millionaire. Then, it is just implementing it. By the way, I didn’t say it would happen over night.
3. Plan and stick. You have what you really want to do and what you are passionate about and what makes you wealthy. Now, do what you have to do in order to get there. Make some business plans, investments and start trying to find ways to build your own wealth. It could be something as simple as becoming an affiliate of a coffee shop or starting a craft business. Whatever it is, if you feel like it is right, you will be able to get to the next step.
This pattern is the one that is truly magical and will lead you to true wealth. Millionaires that grab and take - come and go. They will probably need help with finances too. But, if you are doing what you love and are passionate about, doors open and magic happens.
Here’s to your wealth!
Are Quicken 2007 & Money 2007 Worth It?
USA Today’s financial markets reporter Matt Kranz today wrote about personal finance software. The question was:
Intuit (INTU) and Microsoft (MSFT) have released new versions of Quicken and Money personal finance software. Are they worth trying?
And here’s part of the answer:
Overall, personal finance software is a great idea for most investors. Many of the things that scared people off before, mainly the need to type in every transaction, is essentially gone, since both Quicken and Money can download transactions from your banks, brokerages and credit card companies. If you’re a serious control freak, you’ll want to get the top-of-the line versions of Money or Quicken, called Premium and Premier respectively. They contain all the investing features you want.
But if you’re just hoping to track your checking and savings accounts, you may consider the stripped-down versions: Quicken Basic and Money Essentials. They’re less expensive and will get the job done.
What if you already own Quicken or Money 2006? Should you upgrade to 2007? Probably not in the case of Money. Money 2007 is virtually indistinguishable from Money 2006. Quicken users, though, might consider an upgrade. Quicken 2007 finally upgrades the product’s dated look and feel. It also adds a great new “home page” that helps you examine how much money you’re likely to save in the month.
The bottom line? If you’re serious about saving money, personal finance can help you get a bird’s eye picture of all your accounts in one place and track your spending and investments. If you don’t use it already, you should give it a try.
Time for a Financial Check-Up
Like medical problems, it’s best to detect and fix financial problems early, before they spiral out of control.
Study this list of common personal financial problems. If you can identify with any of the symptoms, it might be time to change your habits and improve your financial health.
Problem 1: Not planning
You’ve allowed your credit card debt to accumulate. You’ve left your
“savings sitting in lousy investments for years.” You “leave gaps in your retirement and insurance coverage.”
Cure: Stop procrastinating.
Problem 2: Overspending
Basically, you spend too much. You don’t same much (less than 5% of your after-tax income.)
Cure: Become thrifty.
Problem 3: Dependency on Consumer Credit
You carry a balance month-to-month on your credit card(s). You’ve purchased a car on credit.
Cure: Cut up those cards.
Problem 4: Delaying saving for retirement
You haven’t even thought about putting money aside for retirement.
Cure: (see problem 1)
Problem 5: Sucker for Sales Pitches
You are easily pressured into making financial decisions. You don’t take time to reflect or get a second opinion before investing.
Cure: Just say no to slick salespeople.
For more financial health problems to watch out for, check out the article at AllBusiness.
“Baby Steps” to Financial Fitness
Thes are finance expert Dave Ramsey’s famous ‘baby steps’ for financial fitness, courtesy of the San Antonio Express-News:
Baby step 1: Start a $1,000 emergency fund.
If you don’t already have one grand on hand, save for it. That means paying yourself before you pay the bills. In fact, you should give, save and then pay the bills. Oh, and this emergency cash is for just that — emergencies only.
Baby step 2: Pay off all debt with the ‘debt snowball.’
This is probably the toughest step of the bunch. List all your debts from least to greatest. (Don’t worry about interest rates.) When you’ve eliminated the smallest debt, add its payment to what you pay on the second debt until that is paid off. Then add those two payments to what you pay on the next debt, etc.
By compounding payments, you get out of debt faster — Ramsey figures two years on average with exception of the mortgage. Naturally, don’t incur debt during this period.
Baby step 3: Three to six months of expenses in the savings.
You should be debt-free at this point (except the house), so the money you spent paying credit cards can now go to building up this emergency fund.
Ramsey figures it takes six months to save ‘Murphy repellant’ — insurance to turn any financial crisis into mere inconvenience. Ramsey suggests money market accounts; they’re accessible and usually don’t penalize for early withdrawal.
Baby step 4: Invest 15 percent of household income into Roth IRAs and pre-tax retirement.
Ramsey loves Roth IRAs and 401(k)s. No surprise, he’s a big proponent of mutual funds as long-term investments. He suggests investing 25 percent in each of these fund types: growth and income, growth, international and aggressive growth.
Baby step 5: College funding for children.
Research the true cost of higher education (tuition, room and board, etc.).
Now the hard part: Pay cash. Why? Because the average college student graduates with almost $28,000 in student loan debt, plus $6,000 in credit card debt.
To bypass loans, go with an ESA (education savings account) or education IRA funded in a growth stock mutual fund. (Again, start early.) Avoid savings bonds and pre-paid tuition. Their rate of return is too low.
Baby step 6: Pay off the home early.
Don’t fall for home equity loans or mortgage tax deductions. Instead, pay off the house pronto with a 15-year fixed mortgage, with payments no larger than a fourth of your take-home pay.
At this point, you should have paid off your debts and saved a three- to six-month emergency fund. That means the money you were paying in those can now go toward eliminating the mortgage. (This would constitute the ‘early’ part.)
Baby step 7: Build wealth and give.
‘(Wealth) makes you into more of what you are,’ Ramsey says. Jerks become bigger jerks; givers become more generous. Ramsey favors the latter, noting that giving is probably the most fun you’ll ever have with money. And if you’ve made it this far, you should have plenty to give.
Online Calculators
Figuring out how much to save for retirement (or anything else, for that matter!) can be confusing, especially when you try to calculate how much interest will add to the final amount and how much inflation might decrease the buying power of your hard-earned and saved dollars. One source of help are the online calculators that take some of the head-scratching out of the process. Try this one at Pacific Life. Hint: look at the page first, maybe print it out, because you’ll probably have to gather some data on you and your spouse (if applicable) before you can actually use the service.
Another useful tool is found at the Wachovia Bank site. This one calculates how taxes and inflation affect your savings. It even gives you a depressing graphical representation of the results and offers some starting figures for you to play with before you decide to get serious with your own money.
Finally, try out the Northwestern Mutual Financial Network’s Longevity Game (you’ll have to unblock popup control) to see how long you’re expected to live. Actually, they have a whole raft of interesting calculators that are free to use.
Your mileage may vary.
Buy QQQQ Direct
Soon investors will be able to buy shares of the Nasdaq-100 ETF (exchange tracking fund) directly from the stock market, cutting out commissions to a middle market-maker like a stock broker or mutual fund company. The Nasdaq’s chief marketing officer, John Jacobs, explains, “This is a very inexpensive, web-based program that allows investors to directly send money in and have the trust pick up as much of the expense as possible.” He further told Jen Ryan of the Dow Jones Newswire:
The program – which Jacobs hopes will be up and running in the third quarter – is intended to target small investors who don’t have a brokerage account but want to invest directly in ETFs. Investors will pay just $1 or $2 at most per trade, which is dramatically less than what most brokerages charge. The QQQQ trust will assist with the transaction costs …
Here’s how the program will be set up: Investors will send money to a “direct purchase” program, where it will accumulate. After a certain point – Nasdaq is still exploring the frequency of these transactions – the money will be directly invested in the QQQQ trust, sans broker …
If the program – which is a joint effort by Nasdaq and a partner who Jacobs declined to name – is successful, Jacobs expects it will be expanded to include Nasdaq’s BLDRS – four ETFs based on Bank of New York Co.’s (BK) index of American depositary receipts.
If the Bubble Bursts
Marketwatch.com’s columnist Paul B. Farrell offers two scenarios for what to do if the “global mega-bubble” bursts: stay the course or play a new game:
If you believe a global megabubble is near, what’s your best strategy? Cash out now, at the top? Sell real estate, stocks too, rent, pay off debt? Then patiently wait until prices drop and buy bargains? Yes, that may be the best strategy for some.
The second expert we consulted, Gary Shilling, is an economist and author of “Deflation: How to Survive & Thrive in The Coming Wave of Deflation.” Shilling cautions: “There’s no such thing as a sure thing, so 100% cash is never appropriate. My recommendation now is 20% stocks, 50% bonds (mainly Treasurys) and 30% cash.”
Farrell gives specific investment suggestions from the experts he tapped for this article.
Help on the Web
Cruise your mouse on over to Sound Money Tips daily for a free and simple financial tip. For example, today’s tip was:
The Citi Dividend Platinum Select Card is offering 5% cash rewards on purchases at supermarkets, drugstores and gas stations and 1% cash back on all other purchases.
The post also offered information on how to apply for the card, additional details about it, and a link to an article about the importance of the newer trend in credit cards–offering cash rewards.
This is just one of several blogs on personal finances offered through former Morgan Stanley analyst David Jackson’s Seeking Alpha website. He covers Internet stocks and investing in them and in China, and information on exchange-traded funds, among many investment-oriented websites.
Those blogs, like this one, are among the almost 14 million that the blog search engine Technorati follows and rates.