BUYING A HOME VERSUS RENTING!

Everyone tells you that you should own your own home, as it’s an investment. An investment is something that produces income. A home is NOT an investment no matter how you look at it. A home costs you money and it’s negative cash flow.

If your home is not paid off you are paying a mortgage. But, and here is the big BUT: you have the following:
1. Taxes.
2. Insurance.
3. Utilities.
4. Heating.
5. Maintenance

The experts will tell you the following:
1. You can’t afford not to buy.
2. Buying can be cheaper than renting.
3. Homes make a great investment.
4. The government wants you to become a homeowner.
5. You don’t need a huge down payment.
6. You don’t need perfect credit.
7. It’s never too late.

My advice:
1. It can make sense to own your own home if you can afford IT! A lot of the bankruptcies today are caused by people who bought too much house.
2. You can afford not to buy.
3. In some sections of the country it’s cheaper to rent than to buy a home.
4. Your home is not an investment.
5. Without a good down payment, you are increasing the costs of your home ownership. Paying more interest.
6. You don’t need perfect credit but they charge you for it. Higher interest rate.
7. Even though the market prices for homes are lower, can you really afford the long term debt?

Before you buy a home, consider all the associated costs. You will be glad you did.

Jacques
CreatingWealthThatLasts

CAN’T KEEP A BUDGET!

If you can’t keep a budget you have company-the GOVERNMENT! That’s why they take money automatically from your paycheck every week. If you are self employed, you need to send in quarterly payments.

Unfortunately, we can’t print money like the government when our budgets don’t work out. The major key to this is automatic payments to yourself.

As in automatically taking out money for savings, you need to automatically take out money for your daily, weekly, and monthly obligations. When your check comes in every week or every two weeks don’t start spending it without a plan.

Your plan does not have to be very fancy just detailed and accurate. If you have taken the time to total your monthly bills, you know exactly what is owed and you know how much money you need to cover these.

Priorities include mortgage, rent, car payments, and utilities. You need a place to live and a vehicle to take you to work or your place of business. Pay these FIRST!

Don’t spend on nonessentials until your bills are covered. Most people take their check, go out to eat, to a movie, buy something on impulse and will easily go through $100 without thinking. They also will not know where the money went or why they can’t pay the bills.

Jot down every penny you spend on a daily basis. Believe me this will be an eye opener.

A major key to staying out of debt is to watch where your money goes and to pay your monetary obligations on time-every time.

Jacques
CreatingWealthThatLasts

PAY YOURSELF BEFORE YOU PAY THE GOVERNMENT!

How is this done you may ask? Pretax retirement accounts: IRA’s, 401k’s, 403 B plans and SEP IRA’s!

For working people this is an absolute must. This is TAX DEDUCTIBLE for you. Only 15% of working Americans are taking advantage of this. The government takes about 27 cents out of every dollar in federal income withholding taxes.

On top of that local governments can also do the same. Open a pre-tax account and start putting a portion of you income in it. There are certain limits as to the total amount you can put aside on a yearly basis and this changes year to year.

As an example, let’s say you put $100,000 in an investment that generates 10% a year. At the end of 30 years you would have-$661,000. However, if you had this in a tax deferred account the amount would be-$1.7 million!

A good way to start is to save an hour a day of your income. Say you make $50,000/yr, that’s about $25/hr. That would equal $6,250/yr.

To do:
1. Put a portion of your salary into a pretax retirement account.
2. This should be at least an hour a day of your income.
3. Start now!

Jacques
CreatingWealthThatLasts

GETTING OUT OF DEBT AND SAVING !

As I have said previously, it’s important to get out of debt. It’s also important to be saving and both can be done at the same time. Financially speaking, putting off saving in order to pay off your debts can be a huge mistake.

You should tackle credit card debt first, as this usually carries the highest interest rates. It’s important to be saving from a psychological standpoint. If you have no savings whatsoever, you will feel broke and out of control.

Most people want to own their own home. This is a good goal but is it really necessary. If you have credit card debt and owe money on auto loans and possibly college loans, don’t add another debt burden by buying a house.

Everyone will tell you it’s a good time to buy a house with the depressed market and low interest rates. What most people fail to do is to factor in the overhead and upkeep costs which will include the following: taxes, utilities, insurance, etc.

A lot of people buy more house than they can afford and the upkeep is the kicker that sends them over the edge financially. Focus on one step at a time. Getting out of debt is a journey; a journey of discipline, delayed gratification, and perseverance.

If this describes you, instead of buying a house, start saving. Start with 2-5% and increase that to at least 10%. Keep at it. Your savings will add up to the point down the road where you can pay cash for a car and have a hefty down payment for a home.

Patience my friend, patience!

Jacques
CreatingWealthThatLasts

IF YOU’RE IN A HOLE, STOP DIGGING!

I
Pay cash for all your purchases. Think it can’t be done? I used to. I thought I would never be able to survive without credit cards. We all can!

Believe me if you save the money before you make a purchase and you have the cash in your hand, you will think long and hard before parting with it. Buying with a credit card is too easy. It does not seem like you are spending money. Reality sinks in when the credit card bill comes in.

If you’re in debt and you keep charging away you are digging a hole that will soon be overwhelming. Stop! Stop! Stop!

Dealing with debt doesn’t mean putting the rest of your life on hold. It means taking charge of your life! The real villain is the interest that you are paying.

Decide to stop using credit cards for things you can’t afford to pay in full at the end of the month. Never miss a credit card payment either. That’s called financial suicide.

See yourself debt free. Start with the simple things. Don’t get discouraged and don’t stop!

Jacques
CreatingWealthThatLasts

GETTING RID OF ALL CREDIT CARD DEBT!

Years ago the only credit cards you could get where Diners Club and American Express. You had to have excellent credit and you where required to pay your balance in full at the end of the month. They made their money by charging yearly fees.

What happened? Banks got in the business and realized that they could make money by letting people make minimal monthly payments and charge ridiculous interest rates.
Remember banks don’t want you to pay off your cards at the end of the month. If they can convince you to pay the bare minimum-they are in your wallet, month in and month out!

Do you know that if you put $10,000 on a credit card charging 19.98% a year and you paid the minimum payment it would take you 37 years to pay it off and you would pay almost $19,000 in interest charges.

Another way they make money is to charge late fees. They can charge you up to a $39 late fee and increase your interest rate up to 29%. Sounds like something the Mafia would do!

Normally you had 30 days to pay your bill, now it’s down to 21 days from the day it’s mailed out to you. Too bad if your away from home for an extended period of time.

Carrying any credit card debt is a VERY bad idea. Focus on getting rid of this monster!

Jacques
CreatingWealthThatLasts

GETTING AHEAD IN A TROUBLED WORLD!

Have you wondered how some people seem to get buy on very little? The world’s economy is lagging because people are not buying. People are starting to save more and the media paints this as a bad thing.

We could all get into more debt and the economy would start up and the news pundits would all be happy. What’s wrong with this picture? It is not cool today to be a saver and have money ahead of you instead of being in debt up to your eyeballs. This is what got the world into the mess we are all in today.

My advice-don’t spend money needlessly. There are a lot of things that would be nice to have but do we really need it? Do you need a CD player that will hold 10 CD’s! Do you need a cell phone that can take pictures, videos, play movies and record songs?

Spending small amounts of money everyday can lead to large amounts of money on a monthly basis. $5 lattes! $4 bagels. $4 ice creams. The list goes on.

If you are serious about getting control of your finances-the small things make a big difference. What you are saving on a daily basis can be applied to your existing debt. Focus on getting rid of any debt at all costs.

Bring a lunch to work! What will my co-workers think? Does it really matter what they think. Are they paying your bills.

I taught school for ten years and you could buy your lunch at the school cafeteria. Most of the teachers did so, including me. We had a teacher friend that taught school for close to 40 years and he brought a sandwich and apple to eat every noon. Who was the wiser one financially?

It’s the small things-stupid!

Jacques
CreatingWealthThatLasts