Carey's Blog

Do your homework when it comes to debt settlement

January Financial — Thu, 11 Dec 2008 12:32:52 -0600

Those struggling under a mountain of debt may not be aware of the various options available to get out of that debt. Between declaring bankruptcy, going for credit counseling, or starting the debt settlement process, we think the most sound evidence for success points toward debt settlement.

We are also convinced that it is much easier on you, as well as guarantees you the most reduced amount of debt, to have a team of professionals experienced in loan modification to go through the process on your behalf. When trying to choose the right team to work for you, here are some guidelines for making sure you're getting the best:

Do your homework or seek professional independent advice from others who have done their homework and compare contract terms.
Choose a company that does not charge a set up fee.
Choose a company with a low monthly maintenance fee (never agree to monthly maintenance fees totaling more than $50/mo)
Choose a company that does not charge an enrollment fee, and then later also charges a percentage of what they negotiate away (double fees).
Choose a company that allows you to always have complete access and control of your money paid into the settlement program.
Choose a company that allows you to borrow or simply take back and keep any amounts paid into a settlement fund account without penalty.
Choose a company that allows you to miss a payment and restart your payment plan without having to repay any fees and without any penalties.
Choose a company that has at least several years of experience in the business.
Choose a company that has no complaints or lawsuits against it from past or current customers.
Don't take a company representative's word for these contract terms - read the contract yourself and find these provisions in writing.

For more information, check us out at www.januaryfinancial.com.

The four unequal paths back to financial solvency

January Financial — Wed, 10 Dec 2008 17:22:19 -0600

It's not something any of us would ever wish for. In fact, for many of us, it's our biggest fear. But in hard economic times, it's all too common to see people face what they'd prayed they'd never have to face. Maybe you are one of the people facing the day when your finances have become too much to manage, and you're wondering if there's even a way out from underneath your mountain of debt.

Well, there is - but not all deal-with-debt plans were created equal. Here is an outline of the four main routes people take when they've hit the wall and want the help of an expert to deal with their debts:

Option #1 - Bankruptcy

Negative credit report for ten years
BK-13 usually requires 100% pay back of principle amounts borrowed over a five year period
Attorney fees to file BK typically range between $3,000 and $5,000.
Amounts paid into a BK repayment plan cannot be accessed in the case of an emergency.
Typical payment on $40,000 of an unsecured debt would be in the $800 range for five years.
Provides some protection for other assets if BK judge allows those assets to remain in the consumer's possession.

Option #2 - Debt Management, Consumer Credit Counseling or some other Non-Profit Debt repayment program

Negative credit report for 7 years
Usually requires 100% pay back of principle amounts and usually some interest
Fees for the program are generally split between the lender and the consumer
Amounts paid into a non profit repayment plan cannot be accessed in the case of an emergency
Typical payment on $40,000 of an unsecured debt would be in the $1000 range over four to five years.
Creditors may seek any and all forms of collection for missed payments including collection agencies, judgments or garnishments.

Option #3 - Do Nothing

Negative credit forever, as accounts are resold to collection agencies perpetually.
Interest and penalties continue to accrue causing the balances to continually increase.
The cost of never ever being able to re-enter the credit system could far exceed the money saved by not paying over time.
Creditors may seek any and all forms of collection for missed payments including collection agencies, judgments or garnishments.

Option #4 - Debt Settlement

Negative credit report for 7 years.
Attorney contract guarantees amounts will be settled for less then 50% of the amounts owed on average.
Payment plans only last 18-48 months by which time the consumer is debt free and protected from any further collection efforts by the creditor.
Until accounts are settled, creditors may seek any and all forms of collection for missed payments.
Typical payment on $40,000 of unsecured debt would be in the $500 - $700 range for 3 - 4 years.
All fees are included and paid from the monthly payments requiring no additional out of pocket expenses from the consumer.
Some Debt Settlement programs allow the consumer to access their account in the case of emergency and borrow or withdraw cash without penalty.

Based on the attorney guarantee, the lower amounts of money coming from the debtor's pockets, and the emergency fallback potentials, we strongly prefer Option 4 over the others. Confirm with someone whose financial wisdom you trust, and then visit us for more information at www.januaryfinancial.com.

Alternatives to a budget-busting holiday season

January Financial — Fri, 05 Dec 2008 14:28:53 -0600

Especially when kids are involved, it's easy to focus on the material aspects of Christmas - new toys, new clothes, new gadgets. Of course, it's not really any better if only adults are involved, the toys just get more expensive!

Many of us have a lot less money to spend this holiday season than we have in recent history, and this year is the perfect time to revisit what the holiday season should really be about: family, love, and generosity to your fellow man (or woman!). If you are facing the reality of spending less this year, or you just want to reevaluate your family's holiday traditions, consider the following ideas:

along with the daily ritual of opening an advent calendar window, challenge your children to do something kind or thoughtful for someone else every day. As they eat their chocolate, they can tell you about it.
Convince your extended family to participate in a gift exchange rather than purchasing individual gifts for each person.
To keep yourselves entertained, you could also have an "white elephant" exchange: each person brings a silly gift of $10 or less. Put all the gifts in the middle, and have one person choose a gift and open it. The next person can either choose a gift from the middle, or choose to steal the first person's gift, whereby the first person gets to open a new one. This gift exchange game is sure to bring lots of laughs!
Volunteer at a homeless shelter or soup kitchen. As you help others less fortunate than yourself, remember all the things you have to be thankful for.
Bake holiday treats instead of buying gift baskets for work associates.
Don't be a snob - shop at Walmart or even the dollar store for basic items.

In short, just be creative! There are plenty of ways to make the holidays memorable without spending a lot of money, and we're confident that you can make it happen.

To learn more about us, visit us at www.januaryfinancial.com

Is the news good or bad for rates?

January Financial — Fri, 05 Dec 2008 12:56:01 -0600

September was an exciting time. The kids were back in school. A hint of crisp weather was in the air. A plan was afoot within the government to purchase "toxic" mortgage-backed securities from Freddie Mac and Fannie Mae. Life was good.

The problem was, after Congress approved TARP (the Troubled Asset Relief Plan), the Fed changed its mind and went to bail out banks instead of the mortgage market. It seemed back to square one for anyone involved in the mortgage industry, whether as a professional or a consumer.

But have no fear, faithful readers, good news is afoot yet again! Last week, Henry Paulson approved another plan, very similar to the first, the aim of which is to help detox the poisoned environment of the mortgage market. Mortgage rates went a lot lower, allowing many people to refinance into better loans.

Rates are still good over a week later. Some reports are even surfacing of 30-year fixed mortgages available on purchase loans (not refinances) for 4.5%. These rates may even be available for jumbo loans (which are necessary in many areas of Southern California).

With all this good news, there is an inherent danger afoot: the desire to continue waiting for rates to drop even further. Many borrowers will decide that if rates are decreasing now, they will continue to decrease and it will be advantageous to wait it out. The problem is that the plan that would bring about these lower rates has not yet solidified, and many changes could still occur that could cause rates to change dramatically. Also, there's no guarantee that the change would be in favor of borrowers - rates might actually increase.

As always, our advice is to contact a trusted mortgage professional (like us!) whose job is to read the markets so as to best advise their clients for their individual situations. If you are considering a new home loan or changing an existing loan, please call us first to make sure your next move is the best one available.

Find out more about us on our website: www.januaryfinancial.com

Deal of the Week - Portola Hills

January Financial — Thu, 04 Dec 2008 13:04:49 -0600

If there's one thing we all know by now, it's that we are in a buyer's market. We are taking this opportunity to showcase amazing buys around Orange County, particularly in the Foothill Ranch area, and giving readers a quick look at what it would take financially to own one of these homes.

This beautiful townhome in the private community of Portola Hills is on sale now! Enjoy the sweeping views of the canyon from the upgraded kitchen with stainless steel appliances. Take time to play and relax in the spacious backyard with both grass and tile. At night, put your feet up and relax in front of the custom fireplace and custom flooring.

Purchase Price: $320,000
Loan Amount (assuming 20% down payment): $256,000
Interest rate on a 30-year fixed mortgage (based on current numbers, subject to change): 5.5%
Monthly payment: $1816.92

If you are paying rent on a similar-sized home, consider the financial benefit of owning your own home and taking advantage of the tax benefits, as well as the intrinsic benefits of owning a your living space.

Many other homes like this one are available in Orange County and we are committed to finding the right loan for our clients' particular situations. Please contact us today

Please note that all figures quoted are for estimation purposes only and do not constitute a loan offer. Numbers are based on good credit standing. In some cases a smaller down payment amount may be available.

Find out more about us on our website: www.januaryfinancial.com

So the recession is official - but does it really matter?

January Financial — Tue, 02 Dec 2008 15:21:52 -0600

It's official: we are in a recession.

Pundits and politicians danced around the word for months, not wanting to declare such bad news, but last week's decision by the National Bureau of Economic Research (NBER) made it unavoidable. Not only are we in a recession, but we have been for the last year.

"Big surprise," many of you are saying. It's true: whether it was officially labeled a recession or not, the last year's economy has been tough on most of us. Many have adjusted their lives to make their dollars work, from small changes like eating out less often, to big ones like undergoing a loan modification to save money on home mortgages.

So, while in reality, the official recession news probably won't change your day to day too much, here are some things to keep in mind as we face the beginning of a new year:

historically, by the time the NBER gets around to officially declaring a recession, we're usually within a few months of the end of it.
in the years since WWII, the US has experienced 11 recessions (this one included), the average length of which is 10 months. We're officially in month 11, which means that statistically the end is in sight.
many firms are aware of the recession and are more willing than ever to work with consumers financially, whether through a loan modification on your mortgage or a restoration of credit. Now is the time to start negotiating!
although the stock market is taking a beating right now, time heals all wounds. Historically, 100% of all the 10-year rolling averages of market returns since these things started being recorded have ended in the black. Try not to panic about your 401(k) and instead, give it time to recover.

The main thing to keep in mind while living through a recession is to stay optimistic. Things could most certainly be worse, and there's never been a recession that we haven't come out of!

Check out this link for further information.

Ways to avoid tightening your belt

January Financial — Fri, 07 Nov 2008 17:03:38 -0600

Do you remember a time growing up when your father said to you, "well, kids, it's time to tighten our belts"? Or maybe your mother tried to soften the blow, telling you in October that "it's going to be a very small Christmas this year."

In hard economic times like the ones we're experiencing now, Americans are often required to tighten their financial belts in order to make ends meet. A very positive outcome can be expected from this though, as we learn to better save and manage our money, as well as to evaluate our expenses. Here are some ideas and tips on making sure your money is being used to its best advantage:

Property taxes - these taxes are assessed as a percentage of the value of your property. In the last few years, values went up --- way up. And property taxes went up too. We all know that values are going down now, but have you seen a corresponding decrease in your taxes? If not, you can be proactive in getting those taxes reassessed and potentially saving a lot of money. Just ask us how!
Insurance - Geico, Allstate, Liberty Mutual and the rest love to tell you about how much they save their customers on their insurance. Do you know that hundreds of other insurance companies exist with equal or better coverage and lower rates? The best way to find them is through a trustworthy insurance broker who can shop many different carriers at one time to find you the best coverage at the best price. You may be able to save hundreds of dollars without losing a penny of coverage. (Put our broker to the test by contacting cyara@stratumins.com and asking for a free, no obligation quote)
Loan Modification - for struggling homeowners, modifying your home loan is a very real option to keep you in your home. Depending on your situation, you could save hundreds of dollars a month on your mortgage (to save time and headaches, please contact a loan mod specialist -- like us -- to be your advocate throughout the process).

Some other ideas to save money on a smaller scale include:

getting your hair cut less often
planning your meals a week in advance so you spend less money eating out and wasted on unnecessary groceries
canceling magazine subscriptions and read the highlights online instead
going clothes shopping for what you need only - not when you're looking for entertainment
exercising more - you'll save money on other forms of entertainment if instead you head outside for a walk

If you're short for cash, you don't need to resort to credit cards to make ends meet. A simple evaluation of your spending, as well as taking advantage of the possible savings above, will help you slide through this slowdown without visiting the soup kitchen.

The economy: no excuse for fearfulness!

January Financial — Fri, 07 Nov 2008 13:48:45 -0600

Every time I listen to the news these days, I think of that old song, "raindrops keep falling on my head..."

The stock market continues to tank. Drip. The dollar is barely getting any stronger. Drip. Home prices are on a slippery slide downward. Drip.

Bad news just keeps pouring down out of the heavens, causing America to shudder with fear every time a news item flashes into our minds. We start planning out "what if" scenarios in order to prepare for the worst. We batten down the hatches and wait, paralyzed with the fear of losing everything.

Did you know that fear of losing is making you miss out on a lot of potential opportunities to improve your lifestyle?

There are the obvious examples:

buying real estate at a "bargain" (may or may not be a good idea for your particular situation)
buying stocks at a bargain
renegotiating your home loan with your lender to take advantage of a potentially lower payment (only works if you're clearly struggling financially)

And then there are the examples that we like better, of the "think outside the box" variety:

make over your home by benefitting from contractors lowering their prices to get you to accept their bid
create new business concepts that work better in a struggling economy than a booming one, like a business helping families learn to cook healthy meals at home on a budget
save money on entertainment by instead vowing to discover your own neighborhood

If you are feeling nervous in this bad news rainstorm of an economy, first acknowledge that to be nervous about the future is normal. Then, shake off your fear, straighten your shoulders, and give us a call to see what opportunities may be available to you.

The Team at January Financial

Office: 949-305-6355 --- email: info@januaryfinancial.com

Be wary of buying just because real estate is "on sale"

January Financial — Wed, 22 Oct 2008 13:07:27 -0500

The good news for real estate investors: buying a home in Orange County is about as cheap as it was in 2003.

The bad news for real estate investors: competition is fierce and rents are dropping.

We all know that with so many families foreclosing on their home loans, buying inexpensive rental properties is becoming relatively easy for investors. One of the [millions of] side effects of this whole crazy economic downturn is that now those savvy investors are having a hard time finding tenants who can afford the rent.

Rental rates here in Orange County will "only" drop about 3% this year, which is not nearly so bad as Florida. There, rents are expected to drop 10%! (OC Register).

So for any tenants or potential first-time home buyers out there, pay attention and watch for opportunities, either to negotiate lower rent, or find an inexpensive home for which you can afford the mortgage. Investors, make sure you've got a reliable tenant lined up before you head into escrow to sign your closing papers.

Cyara Pott - Market Specialist

Early retirement due to stock market tumble

January Financial — Mon, 20 Oct 2008 12:02:31 -0500

The father of a friend of mine has been flying for American Airlines for over 30 years. Though this pilot will only be turning 60 this November, he has decided to take an early retirement. He has some very foresightful reasoning for doing so.

Knowing that his pension is linked to the stock exchange, this man took the chance a year or two ago to lock in his retirement income amount to what the stock market was doing then. I'm not sure of the logistics, but this lock only lasts a couple of years. Rather than retiring in a few years as planned, he has decided to take advantage of his good position now instead of working until the lock expires, and then having to work a few more years just to get his retirement back to the original position.

I've got a couple decades left until I can retire at the standard age, but this gentleman's actions got me thinking. The news reports all this market volatility as bad news only. In reality, there are many opportunities afforded by this investment market that wouldn't have been available a few years ago.

In the meantime, I'm resolving to continue thinking creatively to see how I can make the most of less than ideal times. It just takes a little outside-the-box thinking.

Cyara Pott - Market Specialist

Keeping your chin up while the market's down

January Financial — Fri, 17 Oct 2008 12:07:53 -0500

Problems are an inevitable part of life. Who among you, reading this right now, can honestly say that they've never encountered any sort of difficulty during their time on the planet? Who can report that all the bad financial news out there hasn't personally affected them in one way or another?

The fact that we all have problems is a uniting aspect of being human. Where we really start to differentiate ourselves from others is how we deal with our problems. Next time you're facing an issue that you're not sure how to tackle, try some of the following techniques to get yourself above and beyond and onto the next goal:

Sit up straight. My mother would be disappointed at my tendency to slouch, but I've noticed that working on improving my posture simultaneously improves my mental clarity and drive to work.

Tell a tall tale. Attempting to retell your day's experiences in an entertaining manner sharpens your creativity and power of recall, which is useful in all areas of life.

Keep a journal (or a blog!). Renowned inspirational author Jim Rohn recommends writing every day, as the practice helps you clarify your thoughts as well as build a routine and sharpen self-discipline.

Take a walk. The repetitive and rhythmic motion of walking is extremely therapeutic for the mind, helping you release energy and clear your mind to solve problems or be creative.

Tell a joke, or laugh at one. When you laugh, your body realeases endorphins which create the same feel-good high as cardiovascular exercise. The more you laugh, the better you feel (and of course, the better you feel, the more you'll laugh).

With bad news hitting us from all sides, it's important to remember that we are not slaves to our environment. We each have the power within us to transform our experiences into positive growth opportunities. The only way others can take that power away from you is if you let them.

"9/11 was big. This is bigger."

January Financial — Tue, 07 Oct 2008 11:07:21 -0500

Seven years ago, President Bush addressed the nation in order to shore up confidence in US strength and supremacy after the 9/11 attacks. This last month, the President addressed us again to try to quell growing fears about the financial crisis that is rocking the nation.

According to an article (with the same title as this post) by David Rothkopf published yesterday in the Washington Post, the crisis we are facing today is not only bigger in scope than the 9/11 crisis, but it may signify the end of an era. America is the main global superpower and has been singing the praises of a free market economy since the start of Reaganomics. But with the passage of the bailout bill, Congress has essentially spit in the face of free markets and begun what is likely to be a series of government intervention in the economy.

My whole life has been lived in a free market. Every course I took to achieve my business degree focused on the importance of the free marketplace and Adam Smith's invisible hand. It's essentially the only thing I know.

The basis of the free market is that each individual who goes into the marketplace with the intent to make earnings for himself will also end up taking actions that are good for the whole economy. I wonder, in formalizing this system, did Reagan and Smith underestimate the inherent greed of human nature? It seems that people did go into Wall Street to earn for themselves, but took it way beyond normal limits, leading the system to shudder under all the tricks and scams that were used to cheat the system and earn more money.

I understand that life has to change, and the economy has been in constant flux since it was born. The problem is, my position on the political spectrum leads me to cringe when I think of the government becoming more involved in our lives financially.

Do you think this is the end of the era? Or do you think this is a blip in the constant growth of the US economy?

Cyara Pott - Market Specialist

Corporate Lesson #2: Office Hierarchies

January Financial — Mon, 06 Oct 2008 17:50:46 -0500

A sales rep, an administration clerk, and the manager are walking to lunch when they find an antique oil lamp. They rub it and a Genie comes out.

The Genie says, "I'll give each of you just one wish."

"Me first! Me first!" says the admin. clerk. "I want to be in the Bahamas, driving a speedboat, without a care in the world." Poof! She's gone.

"Me next! Me next!" says the sales rep. "I want to be in Hawaii, relaxing on the beach with my personal masseuse, an endless supply of Pina Coladas and the love of my life." Poof! He's gone.

"OK, you're up," the Genie says to the manager.

The manager says, "I want those two back in the office after lunch."

Moral of the story: Always let your boss have the first say.

Inspiration in uninspiring times

January Financial — Tue, 30 Sep 2008 13:12:33 -0500

My sisters ran a marathon a few years ago with Team in Training to benefit the Leukemia and Lymphoma Society. After one of their team meetings they showed us this video about a father-son racing team they had heard about.

Most of you have probably heard of Dick and Rick Hoyt (they've been on Oprah!), but in case you haven't, take a few minutes to watch the video. The more easily touched people out there may want to grab a Kleenex... :)

Good News Monday - No Panicking Allowed for Wall Street Fears

January Financial — Mon, 29 Sep 2008 11:59:40 -0500

The media has accurately predicted 33 of the last 4 recessions.

-- Zig Ziglar

We all know that the media tends to feed on drama, reporting bad news when it's available, and finding bad news to report when nothing horrible is happening. They have a lot to report these days!

One fear the media is feeding on right now is people's fear of losing a lot of money and savings due to the stock market's wild fluctuations lately. While there is no way of denying the roller coaster ride going on down on Wall Street, we thought we'd throw some history at you to ease your fears this Monday morning.

1974 - President Nixon resigned, causing the market to drop by 42%. Five years and one month later, the market had gained back everything it lost.
1987 - On the day known as "Black Monday", the market dropped 23%, and regained everything it lost within the next 6 months.
2001 - The World Trade Towers collapsed and the Dow Jones Industrial Average lost 14% of its September 10 high of 9605 in one week (the largest one-week drop in history). 58 short days later, the DJIA closed at 9608.

Did you know that no matter how you measure it, 100% of all the ten year periods in the stock market's history have ended up? Which means that for those of you holding money in retirement accounts or long-term savings, holding on to those investments for ten years historically guarantees that you'll earn more than you put in?

"The stock market on the short term is a spoiled brat who throws hissy fits, but on the long term, she's a beautiful woman that's very predictable." (Dave Ramsey)

The thing to remember is that playing around with stocks is very risky, especially in volatile times like these. But as far as Wall Street is concerned, good things come to those who wait. Instead of worrying about your investments, take the time to sit back and relax, knowing that your money will come back. It may just take a little time.

Cyara Pott - Market Specialist

Massively important update on Wall Street and the bailout – we need your help!

January Financial — Fri, 26 Sep 2008 13:23:55 -0500

Please read to the very end. This stuff is incredibly important!

A favorite financial pundit of mine* presented the plan on his radio show, and I think it’s quite good. It eliminates the need to lend $700 billion to Wall Street (you and I will each personally pay about $35,000 to do this, by the way). Curious? Keep reading...

Understanding the details of this plan requires a little accounting lesson. Bear with me, it’s very important. The term to understand is mark-to-market accounting.

Part of the Enron and WorldCom scandals had to do with improper valuation of assets. Or in other words, these firms would buy assets and put them in the books at a certain value. Things go down in value over time, right? Well, the firms never decreased the value on the books, so the entire value of the firms was highly overstated. Imagine if you bought a new car 10 years ago for $20,000. The equivalent would be you telling people today that the car was still worth the same $20,000. I.e., a big, fat lie.

In response to this, laws were passed regarding “mark to market” accounting. This meant that periodically, firms were legally required to mark down the value of their assets to what the market said they were worth. This would help avoid the major overvaluing of assets.

Here’s the major problem with this rule when it comes to mortgage-backed securities. These securities have lost value significantly over the last year or two due to the subprime mess, sometimes up to 80% of their value. This is because the firms holding the securities are required to mark down the value of the assets to what the market will pay for them – which is not much.

The big “but” here is that the securities are tied to actual, physical assets. Regardless of a homeowner’s ability to pay, the house that secures the mortgage debt has most certainly not lost 80% of its value. The highest rates around the country are about 30%. The banks can’t sell the securities at that depreciation rate, however, because the laws require them to sell them at the market price.

So here’s the solution: For a limited time only, and only regarding mortgage-backed securities, we must eliminate the mark-to-market rule. This would allow firms to start selling the MBS closer to what they’re actually worth and not have to take a debilitating loss. People would want to start buying them again because they’re worth something. Slowly, the money would start flowing in the market again and this credit crisis would start to be less of a crisis.

What do you need to do? Click on this link to tell the Senate Committee on Banking, Housing, and Urban Affairs exactly what you think. If you like, you can just copy and paste this simple message:

Please eliminate the mark-to-market accounting rule so that firms can start selling their mortgage-backed securities at a fair rate.

You can add whatever threats or complaints you like, but that should be the gist of the message. Tell them now, and tell them often. They hope to come to a plan today to solidify the bailout, so we need to get through to them quickly. If you’ve never been a political activist, try it. I just filled out the form and it was kind of fun to know that I’m doing something to try to fix this mess rather than listen to the news with a horrified expression on my face.

Of course, if you’ve left them a scathing message with your thoughts on the issue, feel free to copy and paste it here. We’d love to hear what you really think!

Cyara Pott – Market Specialist

*The expert referred to is Dave Ramsey, who gets some flack due his rather radical views of debt and money in general. Click here to listen to or read the transcript of his presentation of the plan.

I'm the best! I'm the best! [Oh... shut your mouth...]

January Financial — Thu, 25 Sep 2008 12:33:02 -0500

There's a time and a place for self-promotion. Here on Active Rain, usually that time is now, and the place is your blog. But is there a limit to how much you should self-promote?

Most of us are either too humble or have too-low self-esteem to over-promote ourselves. Am I good at what I do? To be honest, yes. Quite good, actually. I could tell you day after day about the tough loans I've closed, or about the hard financial situations I've resolved. I'm guessing most of you would get tired of my promotion in approximately two posts.

In striking the promotion balance, you need to carefully gauge your audience and how interested they really seem.

Contact someone personally a maximum of two times without response. More than that and you start to irritate them and make it twice as likely that they'll never respond.
Never add someone to your email blasts without permission. When someone does that to me (and sends me junk, not useful content) they quickly get relegated to the blocked senders list.
When you do contact someone to self-promote, be very careful to keep your message them-based. Be obvious in what they can gain from a relationship with you.
Try to get other people to promote you on your behalf using success stories. As a friend of mine says, "Facts tell, stories sell."

Sometimes we need to be direct and just say to someone, "I know that I will be able to serve you as well or better than anyone else out there." Sometimes asking for business and referrals is the only way we're going to get them. The hard part is knowing when that "sometime" is.

My advice? Be very, very careful. When you are 100% sure your audience is receptive, go ahead and tell them how wonderful you are. Otherwise, err on the side of caution and turn the focus onto your audience. It will help you learn how to serve their needs even better if you focus on them, and can only help you look better in their eyes.

Cyara Pott - Market Specialist

Seeing the dark side of bailing out Wall Street

January Financial — Wed, 24 Sep 2008 11:57:11 -0500

Last week I admitted, albeit with a lot of trepidation, that the government's proposed $700 billion Wall Street bailout may be what the doctor ordered.

I thought it might be what the market needed to stop its panicked hyperventilations. I thought that for this one time, it might be worth it to suspend my dislike of big government and admit that the move was necessary. I decided to ignore the potential dark side and breathe a sigh of relief for a day.

I'm starting to doubt myself. There are a couple things about the idea that are scratching at my neck like a new wool turtleneck:

The Treasury basically wants unlimited authority and access to purchase whatever assets from whichever firm they please, with very few (if any) checks and balances.
It wants the authority to purchase not only mortgage-backed securities, but any other assets it deems necessary. What the criteria will be for choosing which assets to purchase isn't obvious.
The capital to purchase the assets will be raised by selling treasuries, most likely in the foreign markets, which will make us more dependent on overseas financing and will probably have a bad effect on inflation.
There's no easy and clear way to value the assets in order to put a price tag on them. Some firms value their mortgage-backed securities at as low as 20% of book value, and some as high as 75%. What would stop the Treasury from paying way too much for these assets in order to pad the wallets of certain strategic partners?
It's not just US firms who may be able to participate, but potentially foreign firms that hold US assets.

Based on all this, I'm really glad that Congress is stalling on this one, despite Henry Paulson's used-car salesman style of convincing that it needs to act now or all will be lost. I understand that we're between a rock and a hard place, but it really seems like this plan would give the Treasury a lot of power and very little accountability.

So, let's imagine, what if the government didn't bail out Wall Street? Fill in the blanks for me - what do you think is the worst case scenario if this grand scheme didn't go through?

Cyara Pott - Market Specialist

When the going gets tough, the frugal get thriving

January Financial — Tue, 23 Sep 2008 13:35:48 -0500

One thing we Dutchies are famous (or infamous) for is being cheap.

Growing up, we almost never ate out, and when we did it was McDonald's. We weren't allowed soda, and we had to eat our meat because that was the "expensive" part. Buying new clothes was a treat, as most of them were hand-me-downs from older cousins or from the thrift shop. The first time I remember taking a plane anywhere was when I was 17; we would drive everywhere else.

Okay, okay, most of that was not due to the Dutch thriftiness, but rather because a pastor's salary doesn't stretch that luxuriously between a family of 6. When I grew up and gained control of my own money, I lost a lot of the frugal habits of my childhood. I will admit to spending over $100 on a pair of jeans.

Now that the economy is slithering and sinking to a Depression-reminiscent bottom, all the frugality of my childhood is coming back to me. I'm actually really enjoying learning to save money again, and bargain hunting where I can. Here are some of my top tips for avoiding spending more money than you have.

1. Take your credit cards out of your wallet - in their place, put a slip of paper titled "Wish List". When you see something you want, instead of whipping out the plastic, write the item down on your list. After a few weeks, revisit the list and see what on it you still want. A lot of what we buy is purchased on impulse, and simply suspending the impulse can save a lot of money.

2. Cut down your meals out - if you eat out 5 times a week, bring it down to four. A grilled chicken breast sandwich with fries might cost $8 at an inexpensive restaurant (before taxes and tip). The same meal at home would cost $2-3.

3. Eliminate unnecessary monthly expenses - magazine subscriptions, though inexpensive, can be a big drain, especially when so much information is available online, and you can go to a local bookstore and read the print version with a cup of coffee in a comfy chair. If your car is older, talk to your insurance agent about eliminating comprehensive & collision coverage (the part that pays for damage to your car). I just did and I'm saving over $30 a month.

4. Take advantage of membership discounts - one thing I love to do is see movies in the theater. Through my Costco membership, I can get two tickets for $15, which saves about $5 per movie or up to $15 for Imax showings. Through my significant other's student id, tickets can be bought for $6 apiece.

5. Clip coupons - I have an aversion to this one since it always made me feel poor, but I had to remind myself that a lot of items are sold on a huge markup. Using coupons doesn't mean I'm poverty-stricken, it just means that I'm stealing back some of the producer's profits.

There are approximately 752 million other ways to save money if you're keen on finding them. All it takes is a little preparation and a bit of creativity to stretch that dollar just a little farther than usual.

Cyara Pott - Market Specialist

Big SoCal developer announces layoffs

January Financial — Mon, 22 Sep 2008 17:18:09 -0500

When you live in Orange County, it's almost impossible to escape from the Irvine Company.

When I wanted to find a nice apartment to rent a few years ago, it was hard to find anywhere that was NOT owned by the Irvine Company, but since its prices seemed to be at least $100 a month more than elsewhere, that was my goal.

We had a similar issue when looking for office space recently. The Irvine Company seemed to own almost every property listed, and the prices per square foot were not what we were willing to pay.

Of course, in return for those high prices, the Company delivered a higher-value product which is part of the reason that a lot of Orange County has such a reputation for affluence. It has been responsible for transforming Irvine Ranch, which makes up more than a fifth of Orange County, into shopping centers, office buildings, and homes.The Company reportedly pays the most taxes of any other entity in Orange County, so it is certainly an important part of life in this area.

It was announced today that 100 employees have been laid off due to the economic downturn. This is the first time since 1992 that the firm has done this sort of layoff.

It just goes to show you that it doesn't mater how much money you make or how well known you are, when bad times hit, they hit us all equally. My heart goes out to those who have lost their jobs and will have a much harder time finding a new one than they might have a year ago.

Cyara Pott - Market Specialist

Bailing out Wall Street and other things that make me squirm

January Financial — Fri, 19 Sep 2008 12:13:51 -0500

Don't get me wrong, I have my opinions about politics. Generally I just like to keep them to myself. I'll make an exception when it comes to Big Government.

I don't like it. Not one bit. Get your hand out of my wallet, Uncle Sam.

So when I heard the news that the US government plans on creating a separate fund to buy bad debt off of the books of struggling banks and other Wall Street players, I got on my high horse and started preaching to anyone who would listen (ie, the cats and the trash collector) about the folly of making taxpayers take the brunt of the financial mess in New York.

I am off my high horse now, and ready to see the error of my ways.

We are in a big mess right now. I'm not saying that to get people scared, and I'm not being paid by some Wall Street short selling scam artist to create panic in the market place, but the fact is we're not in such a hot position. This week we saw a modern-day run on the banks with investors hastily pulling money out of all sorts of investments. We're seeing record-setting foreclosures and high unemployment. And our dollar has lost a lot of global confidence recently.

The actions of the Treasury to somehow triage this mess are not ideal, but I will have to admit that to a marketplace foaming at the mouth with panic, the Treasury's announcement to guarantee money market funds was like giving the nation a giant paper bag to calm down its hyperventilations. And people are responding: check out the action on Wall Street this week:

One of the big determinations of financial success is consumer confidence, and we were sorely lacking in it this time yesterday. Now we have some reason to believe that there's hope, and we're taking tentative steps toward the light at the end of the tunnel.

I'm curious to see if this will be the big turnaround that we are all craving. Or maybe, as some of the Chicken Littles out there are saying, this is yet another bandaid over a severed artery. As always, time will tell.

In the meantime, let's talk: what do you think of the Fed's actions?

Lessons I’ve learned from my cat

January Financial — Thu, 18 Sep 2008 13:33:32 -0500

1. When you’re content, tell someone about it: a cat’s purr is an audible reminder that whatever it’s up to at that moment, it’s happy. Vocalizing your contentment makes it that much more real and enjoyable.

2. Eat when you’re hungry: “grazing” throughout the day has been shown to keep the human body’s metabolism a lot steadier, which results in fewer blood sugar spikes and therefore less packing on of pounds.

3. Make the best of the outdoors and nap in the sunshine: pull a Garfield and find a nice sunny spot to relax in for a while. Can you imagine a better way to pass an hour?

4. Have fun where you are: how many cats have you seen pawing at invisible mice or jumping to catch a speck in the air? They don’t need complicated contraptions to have fun, they can create it themselves!

5. Find a warm lap, and stay there: or in human terms, find a warm body to snuggle up with on the couch (preferably your significant other or your kids), and take some time to enjoy the blessing that is that other person.

Cyara Pott - Market Specialist

Understanding the hullabaloo over AIG: For Dummies*

January Financial — Wed, 17 Sep 2008 16:03:04 -0500

It was unavoidable in the news yesterday: the insurance firm AIG was in trouble, and a lot of it! Lehman Brothers Bank was too, but there was more to-do about AIG.

Here's the non-financial analyst (ie, Dummy) version of what's going on:

Last night, the Federal Reserve pulled that old trick that's becoming too familiar, the old let's-use-public-funds-to-pay-private-debts trick, and loaned AIG $85 billion to help it avoid bankruptcy. AIG will have two years to pay back the loan, and in the meantime will be selling a lot of assets.

Although I'm not wild about the government stepping in where private money is concerned, this time, I get it. AIG provides an extremely broad range of insurance for customers around the world. If it had collapsed, not only the US would be in trouble, but global economic confidence would start to become shakier than ever. Right now, that would not be helpful.

Don't be misled, however, that millions of people would be left with unpayble claims if AIG had collapsed. In fact, the US government requires insurers to belong to one of two guaranty associations that will cover claims payouts if an insurer becomes insolvent. Of course, there's a limit, I believe up to $250,000 per insured (but double check my facts before you quote me).

All I keep thinking is, Alan Greenspan got out at the right time. If there's one person in the world I wouldn't want to be right now, it's Ben Bernanke, the Federal Reserve chairman. I'm having enough trouble managing my own bank account.

Cyara Pott - Market Specialist

*I hope I didn't insult any of my readers with that title - if so, tell me and I'll apologize!

Thinking about buying a foreclosure? Read this first!

January Financial — Wed, 17 Sep 2008 11:07:27 -0500

We've been hearing a lot lately about the smokin' deals on foreclosures and REO properties that are available. Newscasters rave about cheap homes over which buyers are fighting tooth and nail. In Orange County, however, these "incredible" deals can still seem out of reach to many buyers.

Although home values have dropped considerably in our neck of the woods, we have to remember how high they were in the first place. We then have to remember that 20% of value lost on a home that would sell for $750,000 in the peak of the market is still a hefty $600,000.

Seeing that something is "for sale" doesn't necessarily mean it's cheap, although people often get suckered into that kind of thinking. How many of you out there have gone for a buy-one-get-the-second-half-off deal when you only needed one in the first place?

All that said, when our clients come to us wondering whether they should try to get in the market on a "cheap" foreclosed home, we don't always answer with an enthusiastic "yes!" Often, the financing takes a lot longer to set up on these homes. Banks are less willing to negotiate than an individual seller would be. And other deals are out there with less fierce competition.

The moral of this post is: if you're in the market for a new home in Southern California, make sure you speak with an experienced real estate agent or mortgage broker. You may be a good candidate for an REO home if you have the time and energy to see the deal through to completion. In reality, however, you can probably find a decently-priced home, not owned by the bank, with a lot less hassle and just as much satisfaction.

And when you do get that new home, make sure to invite us to the housewarming party!

Cyara Pott - Market Specialist

Living like you have a million dollars (even if you don't)

January Financial — Tue, 16 Sep 2008 10:54:50 -0500

Many of us, myself included, dream about the day that we will become truly independently wealthy. I personally picture a house in the mountains, lake nearby, and lazy days spent drinking tea and reading on the back porch.

The unfortunate truth is, I’m not very close to living that dream. I don’t have nearly as many assets working for me as I’d like, and instead of a lake out my back door I have my neighbor’s backyard.

On the other hand, I’m in a unique position to benefit from the lessons taught by wealthy people. Here are a couple things I’ve found that a lot of wealthy people have in common:

They don’t throw their money around in the stock market – Instead, they carefully manage their investments, researching and choosing wisely. Some people, when given a lot of money to invest, might be tempted to “play the market” and tamper with the powerful feelings of a risk-loving investor. Wealthy people choose steady-growth vehicles with historically promising returns.

They have no boss... except themselves – The Federal Reserve reports that 12% of Americans own their own business, but 21% of the wealthiest Americans (top 10% of income) own their own business. I would guess this has something to do with the passion to work hard that a lot of us feel when we’re working to pay ourselves and not our bosses.

They buy used cars – Sure, maybe that used car is a Jaguar, but wealthy people understand that a car loses up to 25% of its value when you drive it off the lot, and up to 70% of its value over the next four years. Wealthy people let someone else take the brunt of the value loss, then enjoy a nearly-new vehicle with a less shocking price tag.

They don’t mess around with debt – Wealthy people understand the folly of high-interest debt, and instead opt for the debt that will give them the most leverage. For example, many have the funds to own their homes outright, but still carry a mortgage. If they can pay the bank 6% interest but earn a modest 11% on their home’s equity, that’s a 5% interest rate that they’ve gotten, basically for free!

You don’t have to be wealthy to live like the wealthy. Start practicing these habits now and you’ll be a step ahead of the game when you do finally achieve the wealth you seek.

Cyara Pott – Market Specialist