Archive - June 2011

1
Why Today’s Real Estate Forecasts Are Wrong
2
How To Find the Right Financial Advisor
3
The Right Approach To Building Wealth
4
Should You Prepay Your Mortgage?
5
How To Use Your 401k To Buy a Business

Why Today’s Real Estate Forecasts Are Wrong

Mortgage approval is the key to real estate prices

Real estate values for one to four unit residences are a function of the ability to get a loan, which in turn is a function primarily of mortgage underwriting. (Low and declining rates help somewhat to facilitate the ability to buy a property but do not help enough).

Many investment experts are quoted in the news as saying that the ratio of house prices to income is the lowest since either 1975 or even 1965. However this assumes that personal income is:

  1. Evenly distributed between all consumers (your pay is, on
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How To Find the Right Financial Advisor

If you want financial planning, finding a professional to guide you through the process is a daunting proposition.   Even referrals aren’t always the solution, since many of your friends might not completely understand what their financial advisor does or whether what’s done is right for them.   Finding a financial planner can be intricate and in depth.  There are also a few simple concerns you can explore to work toward finding a professional that’s a good fit for you.  Here are four basic issues you can address. 

Are they qualified?

The first is what the planner’s credentials are.  Credentials are different …

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The Right Approach To Building Wealth

What's the best wealth building investment right now? I get that question all the time and I laugh. What’s good?  What is on a hot streak? There are lots of investment products out there that can build wealth and people treat these things like shiny new objects to pick off the shelf.

The Carrot Stick

Every investment will have some sort of risk, some range of return, some tax implication, and some expense associated with it, and more. Sounds complicated?  It is!  But when you come from a perspective of looking at these things on the shelf and comparing them …

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Should You Prepay Your Mortgage?

A mortgage prepayment is usually a good idea which I often recommend. My forecast is for the stock and bond markets to produce a low rate of return for the next several years so one may be able to get a better return by paying down their mortgage. If the S&P returned about 2 or 3% annually in the past decade and bonds are now paying about 3 to 4% then a mortgage pay down is attractive.

The recommendation needs to be tailored to each client’s needs. So if a client is self-employed or financially shaky they may need to …

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How To Use Your 401k To Buy a Business

You can take money out of your 401k with no penalty at any age to buy a business. This is done by first becoming a business owner, then opening a new 401k with a Custodian who will allow this. (Very few do). Then you roll your IRA to your new 401k. Next the 401k purchases shares of stock in the business that you are trying to buy. You do not get to actually handle the cash from your 401k, instead the Custodian transfers cash from your 401k to the seller of the business.

The Problem

There is a big potential …

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