— Building Wealth

SUZE ORMAN’S 2009 ACTION PLAN

Posted on March 8, 2009. Filed under: -- Book Summaries, -- Building Wealth, -- Money Help (in simple terms), -- Suze Orman, -- YOUR Retirement | Tags: , , , |


By Molly Greavessuze_orman_2009_action_plan1

New York Times best-selling author and one of our nation’s go-to experts and on financial matters, Suze Orman believes that 2009 is a critical year for your money. And I completely agree with her, which is why this weekend I sat down and read her book, 2009 Action Plan: Keeping Your Money Safe & Sound.

 

I know Suze Orman is a trusted household name and I wanted to be sure to recap her message for you in case you don’t have time to read her book.  Below I have outlined with bullets the main ideas from each of her 10 chapters.

 

Don’t forget that the whole goal for you making the rights moves in 2009 is to alleviate the stress, fear and anger you’re feeling and replace it with the secure sense that you have done what it takes to protect yourself, the money you’ve worked for, and the one’s you love. Good for you for taking the first step and reading the action plan. Best of luck to you with your goals as well =)

 

Here is SUZE’S 2009 ACTION PLAN and WHAT YOU MUST DO:

 

  • Make it a priority to pay off your credit card balances.

 

  • Read every single statement and all correspondence from your credit card company to make sure you are aware of any changes to your account, such as skyrocketing rates.

 

  • Work to get your FICO credit score above 720.

 

  • Be very careful where you turn to help with credit card debt. Debt consolidators are often a very bad deal. The National Foundation of Credit Counseling is a smarter choice.

 

  • Resist the temptation to use retirement savings or a home equity line of credit to pay off credit card debt.

 

  • Pay the minimum amount due each month on every card. That’s your only shot at keeping your FICO score from falling further. It will also lower the odds that your credit card company will close your account.

 

  • Line up your cards that charge the highest interest rate at the top of the pile. That’s the card you focus on paying off first. Send in as much money as you can each month to get that balance down to zero.

 

  • Once the first card is paid off, focus on the second card in your pile: the card with the next-highest interest rate.

 

  • Keep up with this system until you have all of the cards paid off.

 

  • The biggest risk to your retirement security is giving in to your emotions. You may make decisions that “feel right” for 2009, but that doesn’t mean they are the right long-term solution for you.

 

  • Make sure you have the right mix of stocks and bonds in your retirement account for your age.

 

  • Do not make early withdrawals or take loans from retirement accounts to pay for non-retirement expenses.

 

  • Convert an old 401(k) to a rollover IRA so you can invest in the best low-cost funds, ETFs, and bonds.

 

  • If eligible in 2009, consider moving at least a portion of a 401(k) rollover to a Roth IRA. Or wait until 2010 and convert it to a Roth then. In 2010, everyone regardless of income will be able to contribute to a Roth. Just don’t forget about the tax due at conversion.

 

  • Make sure your bank or credit union is covered by the federal deposit insurance (this is the FDIC for banks and the NCUA for credit unions ).
    20080226_fdic_logo_181
    ncua_logo-1208135202_std

 

  • Check that what you have on deposit is eligible for full insurance coverage in the unlikely event that your bank or credit union fails. Through December 31, 2009, the general limit has been raised to $250,000 from its previous $100,000, but you still need to educate yourself about the ins and outs.

 

  • If your savings is in a money market mutual fund sold through a brokerage or mutual fund firm, consider moving it to the Treasury money market fund at that company.

 

  • Build up your savings to cover eight months of living expenses.

 

  • Move all money you need within the next 5-10 years into savings. Money you need soon does not belong in the stock market (make sure you choose a high-interest yield savings account).

 

  • Separate your wants from your needs.

 

  • Get over the guilt that you aren’t “providing” for your kids.

 

  • Strike the word “deserve” from the conversation. What you deserve is irrelevant; what you can truly afford is all that counts.

 

  • Try to negotiate better terms on a car loan you can’t keep up with.

 

  • Be very careful when asked to co-sign anything, no matter how much you love the person asking you for your help.

 

  • Pledge these three things:

 

1.     Do not spend money for one day

2.     Do not use your credit card for one week

3.     Do not eat out at a restaurant for one month

 

  • Push for a mortgage “modification” if your current loan is too expensive.

 

  • Do not use credit cards or retirement funds to pay for a too-expensive home.

 

  • Stay informed about new programs, from lenders and the government, in the months ahead that aim to keep more homeowners out of foreclosure (try calling 888-995-HOPE or go to hopenow.com)
  • Build a real savings fund a HELOC should not be used as a safety net in 2009.

 

  • Focus on your home’s long-term value, not it’s price change from month to month.

 

  • If your child is headed to college within four years and your collge savings are in the stock market, you should begin to phase out of the market, so that you have 100% out by the time your child is 17.

 

  • If you have a child who will enter college in 2009-2010, look into getting a Stafford loan.

 

  • If Stafford loans are not enough, parents consider a PLUS loan. Significant changes to this program last year make this a viable option for many more families.

 

  • Stay away from private student loans at all costs.

 

  • If you are graduating college in 2009 with student loan debt, know your repayment options.

 

  • Build a substantial savings account today so you will be okay if you are laid off.

 

  • Do not go without health insurance (try ehealthinsurance.com for the largest online resource for health insurance or nahu.org if you like to work with an agent).

 

  • Shop for private health insurance if you are laid off; it is often less expensive than COBRA.

 

  • Purchase an affordable term life insurance policy if anyone is dependent on your income.

 

  • Make sure you have all of your estate-planning documents in order.

 

  • Focus on the road ahead!

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WONDERING IF YOU SHOULD REFINANCE YOUR MORTGAGE?

Posted on January 19, 2009. Filed under: -- Building Wealth, -- Real Estate Guide For Today's Market, -- Saving Money And YOU, -- Uncategorized | Tags: , , , , |


Posted by Molly Greaves 01__what_is_a_home_loan2
According to Money Magazine’s January 2009 issue, they say you should use these three things to help you decide if it makes sense for you or not.
Last year, the average rates on 30-year fixed loans plunged to 5.1%, their lowest level in decades.  IF the three statements below describe you, a refi might pay off…at least according to Amanda Gengler at Money Magazine.
1.  You dont need a jumbo mortgage.  Rates havent come down as much as for loans more than $417,000 (up to $525,00 in some markets).
2. Your current rate is 6.1% or higher.  A refi will cost you a few grand, but if you’ll drop a full percentage point, you’ll likely come out ahead over time.
3.  You have at least 20% equity.  You typilcally need that much of a stake (plus a credit score of a 740 plus) to land the lowest rates with no points. 
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Wall Street’s worst week ever

Posted on October 10, 2008. Filed under: -- Building Wealth, -- Economic Week In Review | Tags: , , , |


——————————————————————-
Economic Week in Review: Wall Street’s worst week ever
——————————————————————-

It was a week most investors would rather forget.
Despite continuing efforts to restore a semblance of serenity in the
financial markets, the global economic crisis only deepened this week,
and investors’ confidence seemed to diminish by the hour. When the
closing bell finally rang Friday–a day of spectacular swings–the
Standard & Poor’s 500 Index was down an historic 18.2% for the week
to 899.22 (for a year-to-date total return of –38.0%). The yield of
the 10-year U.S. Treasury note rose 22 basis points to 3.86%
(for a year-to-date decrease of 22 basis points).

To read Vanguard(R) Economic Week in Review in its entirety, go to:
http://www.vanguard.com/visit/econweek101008

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Setting Goals and Real Estate for example

Posted on August 10, 2008. Filed under: -- Building Wealth, -- Entrepreneurship And YOU, -- For The Investor In YOU, -- On MY Calendar, -- What MOLLY's Up To, Pictures | Tags: , , , , , , , , |


By Molly Greaves

Setting goals: 

I do best if I put myself on a deadline, so I’ve decided to set up some goals for my real estate efforts. To be sure you set goals that can work for you, make sure they are:

-Clear and defined

– Reachable

-Time defined (set deadlines)

-Measurable to determine success

-Have identifiable action steps

– Tell others about your goals to help keep you in alignment with what you’re trying to achieve.

So, for example, here is what I said…

I want to add an extra 10k/month to my annual income.  I’m going to do this by creating a long-term income stream that will pay me residuals. So, I’m going to buy investment properties and aquire rental properties which will yield that level of income.

I’m also working on a mortgage pool, which will offer somewhere around 13%-15% interest, and be backed by a first lien position on real estate. If you know of any investors that might be interested, please let me know; they’ll love you for it, and I’ll handsomely reward you for your efforts. 

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Trump Institute for Real Estate: Austin’s newest “class!!” Check Us Out!

Posted on July 28, 2008. Filed under: -- Austin Related, -- Building Wealth, -- On MY Calendar, -- Real Estate Guide For Today's Market, -- Uncategorized, -- What MOLLY's Up To | Tags: , , , , , , , |


 

By Molly Malone

What a great bunch of people I was able to spend this opportunity with.  And what a great opportunity at that. I’m fortunate to be able to see many of these folks again soon since we have all committed to more classes, which we are all very much looking forward to.

What a diverse group of people as well!  Our group consisted of a retired doctor, a high school math teacher, successful entrepreneurs, husbands and wives, realtor, commercial developers, engineers and marketing professionals to name a few. One thing’s for sure though, we all had a few things in common: motivation, common sense and the desire to build wealth…and we will, I’m sure of it. =)

Thanks for checking out my blog!

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What is the BIGGEST investment mistake of all?

Posted on July 27, 2008. Filed under: -- Building Wealth, -- Saving Money And YOU, -- Uncategorized | Tags: , |


By Molly Malone

DOING NOTHING at all. In today’s world where it’s tough to make it for many, even in a 2 income household, it is still imperative to save and plan for the future. I’m going to purchase some real estate soon to help build my net worth, but I also think paper assets are fine, if diversified properly. Whatever you choose, make sure you choose something because I hate to break the news to you, but if your bank is paying you 10 cents interest per month, or 3% in a CD, you’re going to be in big trouble when you are ready to retire. Very few people are still going to qualify for things like social security, and I truly believe, like many others, that our health and wellness will be in our own ballcourts, equipped with pricetags like you drove wrecklessly through an Astin Martin dealership. 

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THE INTEREST RATES CHARGED ON FEDERAL STUDENT LOANS ARE RESET EACH YEAR ON JULY 1st…now what?

Posted on July 24, 2008. Filed under: -- Building Wealth, -- Money Help (in simple terms), -- Uncategorized, . More Resources For YOU! | Tags: , , |


By Molly Malone

Don’t forget that THE INTEREST RATES CHARGED ON FEDERAL STUDENT LOANS ARE RESET EACH YEAR ON JULY 1st.  Once you’ve already consolidated, however, you are uneligible to re-consolidate again. See the the current rates here.

Also, if all of your loans are from the same lender, you must consolidate with that lender. If you have loans from a variety of resources, you can consolidate at banks or places like Sallie Mae. I recommend VSAC (Vermont Student Assitance Corp),  they are where I have my loans and they are the best…TRUST me. They are not out to trick you into messing up so you end up with higher rates. They are honest, and very helpful. So much that they let me know when to consolidate, and I was fortunate to lock in a 2.875% rate. WHOOOHOO.

At this rate, I’m not even rushing to pay it off. It makes more sense to use the extra cashflow for other goals and investments that offer me a higher return on my money. Unfortunately not everyone is as fortunate.

Don’t forget that when/if you call them to also talk with them about the bonus .25% you can get taken off of your interest rate simply by signing up for them to automatically withdraw your payment from your checking account. Also BE sure your lender always has your updated address even if everything isset up on automatic, because when TAX TIME comes around, you’ll want to be sure you’re able to deduct the student loan interest if eligible ( deduct up to $2,500 per year in student loan interest if your income is less than $50,000 if you are single, and if your income is less than $100,000 if you file a joint tax return) and you’ll need your tax document in hand to take you deduction.

Don’t you just love student loans? =) 

 

2008/2009 Academic Year (1st Disbursement Date On or After 7/1/08)*
Loan Type Federal
Interest
Rate
Federal Fees Federal Fees
Borrowing with VSAC**
Subsidized Stafford
FOR undergraduates
6.0% 1% Origination Fee
1% Default Fee
0% Origination Fee
0% Default Fee
Unsubsidized Stafford
FOR undergraduates
6.8% 1% Origination Fee
1% Default Fee
0% Origination Fee
0% Default Fee
Subsidized & Unsubsidized Stafford
FOR graduate/professionals
6.8% 1% Origination Fee
1% Default Fee
0% Origination Fee
0% Default Fee
Parent PLUS or Grad PLUS 8.5% 3% Origination Fee
1% Default Fee
3% Origination Fee
0% Default Fee
(1% Default Fee for loans
approved before 5/19/08)

 

PS- Don’t ever ignore those student loan payments as they report to the credit agencies. So, if you default on your payments, they report you. In addition,  if you ever claim personal bankruptcy, you will still have to pay back your loans.

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Common Personal Finance Issues:

Posted on July 22, 2008. Filed under: -- Building Wealth, -- Money Help (in simple terms), -- Saving Money And YOU | Tags: |


By Molly Malone

Since I’ve been studying  money as a subject for years now, I’ve noticed that there are some common personal issues amongst us out there, and thought I’d categorize them for you. Since I see numbers as black and white and don’t really attach emotion to them, many people talk with me about their finances. You would be surprised though at how many people take in a lot of money, yet have no assets to show for it.  Instead, they continuously are buying depreciating assets, which are digging many of them into big, DEEP ruts.

— Overspender: Don’t forget it’s not what you make, it’s what you keep. I tell teachers all of the time that they can be rich because it’s what they keep.  The problem is that many people spend more than they take in each month.  Chronic overspending can be a serious problem, and if you are a serious spender, I do recommend seeking help. I had a friend who was a shop aholic. She still loves to shop, but after she got counseling, she now can control what she spends.

— Procrastination: People tend to put things like saving off for a rainy day, but the problem with that thought is that saving is much more effective if you start earlier than later, even if you just put away an extra $5 month! Seriously. Get yourself in the savings habit. If you’ve got some extra cash in the bank earning savings account rates, and you are procrastinating due to lack of financial intelligence, do something about it. Shoot me an email at greaves.molly@gmail.com and we can talk about options, or try someone local to you.

–Unpreparedness: I talk about the importance to have an emergency cushion, which I think should be at least 6 months worth of expenses should you not be able to work, but it seems many can not fathom the idea. This unpreparedness leads to unpleasant surprise, ultimately leading to overspending and debt.

— Lack of Education and Thinking You Can’t: This one drives me nuts. Lack of financial education is a good reason not to get into investments that you don’t know about, but you really need to become your own CEO. Nobody will ever care about your money as much as you will, and it is time for the learning to begin.  Start paying attention to the financial part of the world and news and you’ll be surprised how quickly things come together. In the mean time, I’d get some financial advising so you can start buying yourself some paper assets.  Or, if you’re like me, you could enroll in real estate classes to start investing in real estate. It’s whatever your comfortable with, but do get started (only after your emergency fund is solid though).

— Using emotion not reason: Crazy.  People listen to the news to get information on the economy. When times are “tough” the reporters talk about it to no end, and it’s plastered all over the news. They even run like crazy. Some lose sleep!  However, those same reporters often forget to also mention that on the flip side of when people think times are “tough,” things are actually GREAT for others. People that have the financial education recognize this type of economy to make money, realizing “America’s on sale” and they are buying left and right. Notice how I said people that have the financial education, instead of saying “those that are rich” are buying. Money is cheap today, and it’s time to take action. You don’t have to be rich, you just have to be smart.  

— Financial Clashes– So your friends spend ALL of their money and buy things like Kate Spade purses. At the end of the month, and underneath their glam, they are broke. Broke at the bank, and broken hearted. You instead, have enough purses and have a $300 cashflow at the end of the month.  You know, however, that that cashflow would be more like +$1400 per month if you and your friend did things differently. So, it’s time for you to take control of your financial future and start putting that extra cashflow to work for you.  You might have to change the way you hang with your friend in order to achieve your goals.  Not STOP hanging out, just get some new hobbies together like walking, biking, singing, etc. 

And what if you are a saver and your spouse is a spender? Well, this happened to me, but fortunately I was able to empower my boyfriend with all of these numbers explaining the importance of keeping some of the money you make. Now he’s quitting his job to travel around and hang out since he stayed disciplined and consistent. I did the same thing.  Took about 6 months off or so with no worries. Chilled and traveled.  Anyway, if this isn’t the case, you must work together to build a financial plan that keeps both of your goals in mind, and uses each persons strengths to carry it out.

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Top 10 Ways Of Thinking Like a Billionaire–According to Donald Trump’s Best Selling “Think Like a Billionaire–Everything You Need To Know About Success, Real Estate, and Life”

Posted on July 19, 2008. Filed under: -- Book Summaries, -- Building Wealth, -- Money Help (in simple terms), -- Top 10..., -- Uncategorized | Tags: , , , , |


I have been reading a lot about Donald Trump recently, and find him and his hair to be very intriguing.  Did you know he was once $8 billion in the hole? Yep. That’s ridiculous. He turned that around to be up 6 billion. That’s one fact I learned from the Trump Seminar I attended the other day.

Oh, and guess how many lucky billioanires are out there as per the realease date of this book? 587.

I believe in personally having a millionaire mindset, and continuously read books and take classes about becoming rich to keep be on track with things. I also surround myself with others that are smarter and that I can learn from.

Recently after the Trump Seminar I attended at the Marriott, we were all handed a copy of Donald’s newest book “Think Like a Billionaire–Everything You Need To Know About Success, Real Estate, and Life.”  I decided to take some time and get started reading it.

I’ll blog more about my notes later in case you too are interested in learning how to think like a billionaire.  But first though, I wanted to share with you what Trump considers the Top 10 Ways Of Thinking Like a Billionaire:

1. Don’t Take a Vacation.    He says “what’s the point? If you don’t like your work, you’re in the wrong business.”

2. Have a short attention span.  He says that the most successful people have very short attention spans, and that it has to do with imaginiation.

3. Don’t sleep any more than you have to. Trump says he goes to bed at 1AM and by 5AM he is reading the newspaper.  Helps him have a competitive edge.

4. Don’t depend on technology. He says that if you have something to say, look the person in the eye and say it. He adds that if you can’t do that, give the person a call and make sure they hear the sincerity in your voice. Email is for wimps he says.

5. Think of yourself as a one-man army.  He says that not only are you the commander in chief, you are the soldier as well, adding the fact that you must plan and execute your plan alone.

6. It’s often to your advantage to underestimate. 

7. Success breeds success.  Trump says that the best way to impress people is through results. He adds that you have to create success to impress people in the world of business.

8. Friends are good, but family is better.

9. Treat each decision like a lover. He says that if you treat each decision like a lover–faithfully, respectfully, and appropriately.

10. Be curious.  The Don says that a successful people are always going to be curious. He continues by saying that you have to be alive to your surroundings and hungry to understand your immediate world. Otherwise, you’ll lack the perspective to see beyond yourself.

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Did you know that having the attitude that of “I don’t need a financial advisor until I make gazillion of dollars” will end up probably costing you a lot of money

Posted on July 15, 2008. Filed under: -- Building Wealth, -- Money Help (in simple terms), -- Uncategorized | Tags: , , , , , |


Yep. Get on it! Not sure where to start? I like Vanguard personally. Good advice, low-cost expenses, and good returns.

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