Archive for Investing Tips
Ben Stein on Cash Really Is King
The night before Dr. Martin Luther King, Jr., was assassinated in Memphis, he gave a memorable, inspiring speech. At its end, he said, “I don’t know what’s going to happen with me now. We’ve got some difficult days ahead….” Unfortunately, this is true now about the American (and global) economy. I wish I could say I knew what was going to happen in the future. I have learned that I do not. I was not given the gift or the burden of foresight. I thought that our government would not let the bottom fall out. I was wrong. I am sorry.
So given that I do not know the future, what can I tell you that will be useful? Actually, quite a bit.
Cash Really Is King
First, taking the advice of my dear pal Ray Lucia, rock and roll star and investment guru, I can tell you that, no matter what happens, it will be good to have a nice chunk of money in cash or near cash. Yes, I know we may soon have inflation. But if we do, the rates on money market funds will rise. Cash is just a lovely thing to have in almost situation. Cash or near cash offers a level of comfort that even a large portfolio of stocks does not offer.
Taking a cue from my dear pal Phil DeMuth of Conservative Wealth Management, I can tell you that, if you think we are definitely at a bottom, you might be fooled. While Phil’s research tells us that we may be near a bottom by postwar metrics of price, price to earnings, and price to dividends, we may have ( as Phil puts it ) “jumped the tracks of history.”
My own view is that we have been fooled so much in the past 15 months about what real earnings are, what real book value is, that we cannot trust the data given to us. Yes, by current price-earnings measures, stocks look fairly reasonable. But we don’t really know what true earnings are. That is the vicious truth. So if we are in the quicksand of not being able to rely on the data our companies give out, then anything can happen. Yes, we may be at a bottom or near it. Or we may not be anywhere near a bottom.
Anything Can Happen
Just to illustrate, who would have dreamed a few weeks ago that Citi would be in the kind of trouble it is in, even after a $45 BILLION infusion from the federal government? Anything can happen in the treacherous world in which we find ourselves.
Third, taking counsel from my pal Barron Thomas, very possibly the best salesman on the planet, I will tell you a rule of indisputable value in this or any economic situation: WORK.
Barron is in the real estate and private plane businesses. These are both highly impacted by the economic slowdown. How does Barron deal with it? He gets up at 5 a.m. every day and works the phones from 7 a.m. to 7 p.m., goes home, makes notes, and then sleeps well until he starts all over again. And he closes the deals. There are still plenty of people who will make the deal at the right price.
Keep on Working
Next, from yours truly: Work is deeply therapeutic. It makes us feel better. It gives us a much better attitude about ourselves. It makes us feel as if we are worth something. A middle class person who works has a far better self image than a rich person who does not work. Work is a gift, a sacrament, a true blessing. Plus, people who work are generally going to have higher incomes and higher standards of life than people who do not work.
If times are tough, work harder than ever. You will get through the rough patches and learn how strong you really are. Do not seek to avoid work — embrace it.
Then, finally, I will tell you something I do when I feel buffeted by the markets. I dig into the 12-step program that has saved my life for the past 20 years. Using its precepts, I say to myself, “I am powerless over the stock market. It is all up to God. I do the very best I can, and after that, it’s up to God.”
Read the original article> http://finance.yahoo.com/expert/article/yourlife/135453
Ben Stein Video Examining the Economy
Ben Stein on the Economy: It’s Not as Bad as You Think
Author, economist and TV celebrity Ben Stein argues that the current downturn in the U.S. economy will not last for as long or be as severe as man. Stein questions the financial hysteria, the housing reports and the foreclosure crisis.
Investing vs Paying Credit Card Debt
If you carry a balance on one or more credit cards, you’re not alone: According to the Federal Reserve, nearly half of American families do. Compounding interest of revolving credit cards is one of the quickest ways to kill the momentum of savings.
And nearly half of American families also have some sort of bank savings accounts. If you have savings, should you use that money to pay off your credit cards?
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Before starting the time consuming process of a mortgage refinance, take out a piece of paper write down the 3 most important goals you want to accomplish from home refinancing. Most people will list lower monthly payment, save money, get cash or convert ARM into a fixed interest rate home loan. o Lower Mortgage Payment o Save Money for Increased Cash Flow o Get Cash & Consolidate Revolving Debt o Convert ARM to a Fixed Rate Term Rarely do homeowners list things like, stretching the length of the loan term or increase your mortgage debt with a higher outstanding loan balance, but often that’s exactly what some of these borrowers end up accomplishing. Remember to hold true to whatever goals you listed on paper. Make sure the loan officers and processors that you work with are well aware of your refinancing goals and hold them accountable for delivering the mortgage terms that were quoted in the loan disclosures and “good faith estimate.” Use mortgage refinancing as an opportunity to save money by locking in lower interest rates that are fixed for the duration of the loan term. In most cases you should increase your cash flow simply by reducing the monthly mortgage payments. If you have the option to consolidate credit card debt or adjustable rate credit lines into your mortgage without the “cash-out” feature raising the interest rate, take it. According to mortgage rate publisher, HSH, savvy applicants should shop mortgage lenders and home loan brokers in an effort to uncover the lowest rates and most significant fees reductions. Take some advice from a former loan officer, interest rates and closing costs can vary significantly, so spend a few hours researching something that could save you thousands of dollars a year by refinancing with the best fitting mortgage program from a lender that provides you cost effective home financing. In the event that you are turned down from a mortgage company, consider a loan modification. Foreclosure prevention services have turned into a billion dollar business. You can either contact from your existing lender directly or attempt to negotiate a mortgage rate modification yourself or locate a loan modification company that will negotiate with the lender on your behalf. If you chose to hire a mortgage modification company, make sure they have a proven track record with your lender. I strongly recommend only working with attorney backed loan modification companies because attorneys appear to have more leverage and experience negotiating lower mortgage rates and principal reductions. Some loan modification lawyers have had success settling 2nd mortgages. For example, I have heard of $150,000 second mortgages being settled for $7,000. It sounds unbelievable and unrealistic, but when you consider the other alternative for the borrower is foreclosure and with the mortgage balances significantly exceeding the fair value of the home, the 2nd mortgage lender would get $0 if the borrower chose the foreclosure or bankruptcy options. Read more helpful articles on 2009 Home Financing Tips. Get alerted when new financing tips are published at
Tips for Mortgage Refinancing
