July 15th, 2008

A recent ad by the national Association of Realtors states that home equity accounts for about 65% of the average American's wealth.

WOW! There's something wrong with that equation. That means that a family with a $500,000 house and a $300,000 mortgage - $200,000.00 in equity - plus a car loan or a few thousand dollars on a credit card has more debt than they have assets when you exclude the home's equity. Do the math. If $200,000.00 is 65% of what the family puts on the balance sheet, the total on the bottom line is about $305,000. Add up the mortgage, a $25,000.00 car loan and $5,000.00 in credit card debt and you get $330,000.00.

Failure to recognize that the bottom line is not really the bottom line leads to the misconception that a positive "net worth" justifies all kinds of unsound economic behavior - like borrowing the equity to support a lifestyle that the family can't afford in the first place.

Here's a 'soulution' that can help almost everyone, but especially those in their 30's, 40's and 50's with children still at home. Begin building your "bank" today. Buy a properly finded cash value life insurance policy [you can make sure a policy is properly funded when the guaranteed cash value equals the initial death benefit at age 95 or 100] that will accumulate enought cash value to allow you to pay of the mortgage in half the original term; e.g., 15 years for a 30 year mortgage, 10 years for a 20 year mortgae, etc.

During the accumulation period [before you pay off the mortgage] you can use the cash values in the policy to finance things like cars and the kids education. As long as you repay the loans you make to yourself to pay for these items [you'd be foolish not to], you'll still have the money to pay off the mortgage.

Managing your personal economy isn't all that difficult once you recognize that there are 'soulutions' to every financial challenge and every money need and that the Behemoths want not to solve your problem but to pad their pocketbooks.

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www.TheMoneyForLifeBook.com - www.YouBeTheBank.com

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