And Just Like That...The Bubble Will Burst!

THE REAL ESTATE MARKET ALWAYS RESETS ITSELF WHEN IT GETS TO THE TIPPING POINT! 

Will you be prepared when it does?

An asset bubble is when assets like housing, stocks, or gold dramatically rise in price over a short period that is not necessarily supported by values. The hallmark of a bubble is that it's irrational -  almost a phenomenon when everyone is buying up a particular asset. When investors flock to an asset (like real estate), the demand drives the price up...but it doesn't stay up forever. 

During a real estate bubble, home buyers continue to bid up the price of a property beyond any real, sustainable value. Buying homes becomes a feeding frenzy, and contracts (with escalation clauses) look more like a silent auction than an offer to purchase.  All reason is gone with appraisals based on the speculative rise instead of recent sales. With little to no concern over future values, the frenzy continues as the inventory shrinks.  All the...

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Uh Oh...Did You Finance Christmas Again?

Christmas has come and gone and while most Americans have taken down the tree and cleaned up the mess, they've yet to evaluate the financial wreckage of another financed holiday season.

Reportedly shoppers in the U.S. racked up an average of $1,054 of debt over the 2020 Christmas season — an increase of 5% over last year.  In fact,  44% of shoppers racked up more than $1,000 in holiday debt, while 5% accumulated more than $5,000 in debt.  Go, Santa!

Bouncing back from those purchases won’t come as easy (for most people) as buying the gifts did, and paying off the doubt will outlast the holiday cheer by far...without a payoff plan, that is. 

Based on a consumer survey, only half of those holiday spenders plan to repay the debt within 3 months — others (29%) said they need more than five months to pay it off - leading to interest on the credit card debt and growing balances. Like hamsters on a wheel, they'll keep throwing money at the...

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What Does GOD Have to Say About Your Money?

 
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Did You Build The Bank on the Corner? Sorta...

Banks are the only business in the world that uses somebody else's money to build wealth!  Congratulations...your compound interest is helping to build a bank on every corner across America...and it's making them filthy rich.

Here's how it works.  When a bank receives money from a depositor, the bank then loans out a portion of that money. This is called fractional lending - it’s how banks make money.  They loan out a portion of what has already been deposited. We deposit in - they loan out!

Many banks have minimum amounts of liquidity. That means that they only loan out a certain portion of their total deposits.

For example, let’s say a bank has 50% liquidity; that means that they keep at least 50% of their deposited money ready for customers to withdraw at any time.

But, when you leave that much money just sitting there, the bank isn’t making any significant returns.  So… what do most banks do? They loan out most of the money that...

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LATHER, RINSE, REPEAT...

There's no denying the fact that real estate is a great long-term investment...if you look at it with a long-term perspective, that is.  You can't really go wrong when it comes to investing in housing - but the name of the game isn't to repeatedly borrow against an asset...the name of the game is to actually OWN it...or at least most of it so you can leverage your way to wealth! 

How to buy a house with 5% (or less) down payment - Living On The Cheap

Unfortunately, homeowners often think of their investment as a giant ATM machine, and plenty of them are eager to cash out every chance they get for as much as they possibly can.  Some people cash-out to play...perhaps a vacation or to fund a wedding - but people cash- out to pay off other debt with higher interest rates; and they do so without blinking an eye about beginning the 30-year debt cycle all over again. Bye-bye, equity.  So much for that long term investment perspective - it doesn't take much to go from asset to liability with this strategy!   Lather, rinse,...

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Forbearance to Foreclosure...A Foregone Conclusion?

While millions of people are taking advantage of historic low-interest rates and they're headed to the closing table as fast as they can; millions of others are going from forbearance to foreclosure before they even know what hit them.  Desperate times DO call for desperate measures, but it's a good idea to understand the small print BEFORE you accept the help.  It sounded pretty good, right?  Who wouldn't like a 3-month break on the mortgage payments?  Even people NOT in need of desperate measures took advantage of the opportunity to skip a few payments, that's for sure!  Unfortunately, when things sound too good to be true they usually ARE too good to be true, and now almost 5 million people are about to get a serious reality check they never banked on.

   Requesting Mortgage Forbearance: Be Careful | Greenbush Financial Planning

 

Simply put, forbearance is an agreement between a lender and a mortgagee to skip payments; however, the forbearance landscape is not simple or straightforward and can be treacherous to...

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WILL YOUR NEW HOME BE UPSIDE-DOWN? PROBABLY!

It doesn't always take a hurricane or tornado to turn your house upside down, sometimes it just takes a RED HOT real estate market!   With mortgage interest rates being at an all-time low, consumers are entering the real estate market with a frenzy and the mad rush is causing quite a stir.  Bidding wars are back and prices are climbing at record speed; some markets experiencing more than 30% in home values this year alone!  That's great news if you're a seller...it's not so great if you're a buyer and if you aren't careful, your property will likely be worth a whole lot less than what you paid for it and you could find yourself financially upside down overnight.

The real estate frenzy we're experiencing today looks a whole like the frenzy we saw just before the bubble burst in 2007.   As difficult as it is to believe, history always repeats itself so it's not a matter of IF, it's a matter of WHEN - and it looks like the time to lather, rinse, and...

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NO, You DO NOT Need to Sacrifice Your Lifestyle To Get Out Of Debt!

Once upon a time, the ONLY way people knew to get out of debt was to cut back, eat beans and rice (or whatever cheap/bulk food you could eat), drive a rusty Chevy until it died, and forego any kind of entertainment or vacations until all the consumer debt was paid off.  In other words, it took SUFFERING to get there.  Thank God, that's not the only way anymore. 

 

Debt elimination is one of those things that is gauged on any effort in the right direction at all.  Chiseling away at debt is always a good thing no matter how long it takes to get there.  Some people buy into concepts that teach you to sacrifice a LOT in order to chisel away at debt with the money you're no longer spending on luxury items like groceries and date nights.  Some concepts teach you to focus on your smallest debt first, and once that is paid off then you move onto the next debt until FINALLY, you begin to address the mortgage...the biggest and most volatile debt of...

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6-Figure Student Loans...Is It Predatory Lending?

More than 3.0 million student loan borrowers have student loan debt greater than $100,000, with approximately 800,000 of that total holding student loan debt greater than $200,000Sadly, many of them will be carrying the debt into their retirement if they don't learn how to manage and eliminate the debt.

How did it come to be that 6-figure loans are granted to people on a prayer and a promise?  Most of these people have no track record, no credit history, no income, and no guarantee of an income sufficient to pay off the debt in the future.  Is it predatory lending?  The definition of "Predatory" is seeking to exploit or oppress others - with that in mind, it's predatory alright!  

With the high cost of education, loans are a necessary evil these days.  The average student loan debt is almost $47,000 and they're known to go as high as $1 million.  The good news is that they payments are deferred until 6 months after...

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Do You Seriously Believe That Real Estate Will Always Climb? Think again!

No doubt real estate is a great investment, but long-gone are the days where prices soared overnight....a time when even a blind monkey could make a quick dollar on a good flip.  But what happens when prices don't soar like you thought they would?  Worse yet, what happens when they drop?

What goes up, must come down...including real estate, and it's for this very reason that it's a good idea to build your own equity as fast as you can instead of waiting for the market to build it for you.  The idea of bringing money to the table to sell a house may not be familiar to YOU, but it's a common occurrence for people in need of selling when the market hasn't produced the gain sufficient to cover the cost of selling and/or closing.  

People investing in the stock market understand that what goes up must (eventually) come down, while people investing in real estate never expect to get caught short.  The stock market "resets" itself and the real estate...

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 "The silver is mine, and the gold is mine, says the Lord Almighty"  Haggai 2:8

If it all belongs to Him, why are we living as if it belongs to us?  Are you being a good Asset Manager?  How we perceive MONEY impacts every area of life!  It's time to BREAK THE CHAINS...for the love of God!

ENJOY THE READ!