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
Plan Ahead
My hubby and I will celebrate our 2nd anniversary this August but this early, we are already saving up for our retirement. It’s not really a big amount but just enough so that we can get started. If we continue saving over the next years, it would be enough to live a simple life.
Of course when that time comes, we don’t want to rely on our son for support as most probably he already have his own family by then. I hear stories about old people who were not able to save enough during their heydays and when they got old, they were deep in financial troubles. I think it would be stressful not knowing where to get money even for medication.
We plan to set aside a small amount from our paychecks every month and open a savings account for it. Right now, we haven’t opened an account yet but we put the money in an envelope labeled Mom and Dad’s Retirement fund. We intend to keep adding money to it monthly at all costs.
The future is an exciting prospect for we’ll never know for sure what it holds. My advice is save up while we can so that when the rainy days come, we are ready for it and we won’t be scrambling anywhere just to look for financial help.
Retirement Planning to the Future
With the state of the economy, it is imperative that you think about retirement planning. Retirement planning is the way of the future. It is important to think about your retirement planning so that you are ready for the future when it gets here.
Put money aside each day. There are little things that you can do without daily that could be set aside for retirement. If you put just a little bit back each day, the amount will greatly increase.
Build your savings account. Do all that you can to build your savings account. When the savings account gets big, invest in a certificate of deposit. Move from there to an IRA or annuity plan. You can save without having in risk involved with your money. This is a great way to fix your finances for the future.
Retirement Planning Steps
Step 1:
START EARLY! The difference between starting at 20 and 30 and HUGE. For your money to truly reap the benefits of compound interest, TIME is the single greatest factor. Start as early as possible and encourage friends and family to also start now!
Step 2:
Set up a budget. Ensure that all of your bills and debts are being paid off each month. However, just as important, make sure you are paying yourself each month also. Find strong investments that you like, and sit back and let compound interest do its magic.
Step 3:
Take time to learn about different investment vehicles. While stocks are certainly more glamorous investments, for many Mutual Funds or Index Funds or even Bonds may be the SMARTER investments. Realize that there is market risk and if your investments are founded on a company’s strong foundation, you will eventually weather the storm. Don’t panic and liquidate investments merely because it starts to lose money. This is counterintuitive to the “Buy Low, Sell High” principle.
Step 4:
Educate yourself on tax implications. When you compare how much you make over the course of your life, and see what chunk of that gets taken out by taxes, the result is truly eyeopening. Look into different retirement investments vehicles and choose which one is best for you (Roth IRA, 401k, Roth 401 etc).
Life without credit cards using a savings account
While credit cards seem to be an American staple, something that is seen as a “need” rather than a “want” – you don’t have to live on the roller coaster of credit if you don’t want to.
A savings account is the best way to avoid the credit card trap. I know how difficult it is to save money, really I do. But if you follow these simple tips, you’ll find it easier to save and you can get off the credit card train, you know the one, it only leads to compound interest and more debt.
- Don’t hook your savings account up to your checking account if you are using the bank’s Internet site to check your balance and keep up with your finances.
- If keeping your savings account in the dark isn’t helping, consider starting a savings account at a bank that is not your primary. Do not sign up for a debit card or ATM access if you can help it. Making it difficult to get your money keeps you from spending it.
- Consider a Money Market account. It has a higher interest rate than a standard savings account, and making money on your money might be a great way to keep yourself from getting sidetracked and spending your savings account money.
- Think of your savings account as a credit card. Your limit is how much you have in the savings account. If you spend part of it for an emergency, make payments to your savings account just like you would to a credit card. This will help you from depleting your savings entirely in the event of an emergency that you need to spend money on.
These tips can help you start and keep a savings account, the ultimate cure for having to use credit cards in emergencies.
Your Final Expenses
People do die!
Each day the hearse wheels are rolling.
Somebody is always going home to meet”their maker”.
Death is certain!
Since we all know that we are going to have to kick the old bucket one day, why are there so many
wandering souls keeling over without any life insurance?
Many people are living today like tomorrow will always come. They have beautiful homes.
They are driving nice cars. They also have a closet filled with beautiful clothes. But they do not
take the time out to get a $20.00 per month life insurance policy so that thier loved ones will
not be stuck with cost of a funeral, or the shame of not being able to bury them with dignity.
I lost two loved ones who a did not have any life insurance.
One of them had three children. Two of them were fresh out of college. The youngest child
was still in high school. These poor children had to scamper around to get money to
bury their loved one. It was not an easy thing to do. They were blessed to have good people
and family members who all pitched in to help them to put their loved one away with dignity.
The other loved ones family was not so lucky. He died suddenly without any insurance or
people who cared. His estranged widow had to put him away by way of creamation. They
could not even afford a coffin to place him in for the veiwing. The family members had to go
in this little room and take a peep at him while he was still laying on the gurney, getting ready
to be cremated. What a pleasant memory to leave behind.
Do you want to leave your family with that kind of memory?
Donot depend on your family members to bury you.
They have bills of their own.
Do not depend on your friends or your church family to bury you.
They just might not have the money.
Creamtion costs between $700-1400. Some people just do not have that kind of money.
Be considerate! Better yet, be smart! Get some life insurance and get out of here!
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.
Are you ready to retire?
“Debt-free Diva” Dee Dee Sung of The Detroit News recently answered a reader’s question about how to create a budget to prepare for retirement. Here’s part of her answer:
1. Determine your current monthly cash flow needs.
It’s easy to not know where your money is going, but it’s essential in order to determine your future cash flow needs.
For example, if you carry any credit card debt or have other loan payments, what will it take for you to pay off in full those debts in the next three years? Do you intend to be mortgage free? Do you have a current spending plan that itemizes all your monthly obligations?
Creating a budget can be tedious to set up and keep updated but in time it will become a habit. There are a number of money management software programs available that make this process simple.
It’s very important to tell yourself the truth about where your money is really going, and it’s usually the category called “miscellaneous” that can keep you in the fog.
You’ll also need to find out how much income you’ll be generating from your pension, OAS, retirement savings and other sources. It will be best for you to speak with a financial adviser regarding creating a plan that will allow you to enjoy your desired quality of life and, at the same time, tend to the preservation of your capital.
2. Get creative.
Formulate on paper what you want the next phase of your life to look like.
The truth is that you won’t know how much money you’ll need to comfortably live on until you decide what you’ll be doing with your time and what resources will be required.
If you’ve been at the same line of work for many years, undoubtedly you will have created a routine for yourself and perhaps not given much thought as to what you want to explore or what brings you passion. This can be a more challenging step as you’ll have to grab a “green light” attitude and start to dream out of the proverbial box.
Will you go into another line of work and be earning some form of income? Will you travel or perhaps go back to school? Ask yourself what an ideal day would look like for you, and from there, go about crafting the steps you’ll need to take to create such an experience.
Of course, nothing is cast in stone and plans are subject to change but the more clarity you create up front, the more prepared you will be.
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.