I should have done this weeks ago. It should have been my first post, but being new to blogging I did not have the priorities on what should be posted. I was broke after my second divorce and I am now wealthy. This is not the format to divulge numbers, but let's say the net worth for my beloved wife and I puts us in the top 3% of the country. My UCLA class is where I share all the details. I explain the blocks to wealth, from emotional attitudes and values, and provide the practical tools and techniques to achieve wealth. It will be next week: I will be teach all day Saturday, March 3 on the UCLA campus in Los Angeles.
I only get paid about $300 for the day, so although this is my contribution back to the community it only happens once per year. You will find the link to the UCLA website with information on the class below.
Please, if you know anyone in the Los Angeles area that struggles with how to handle money effectively, please let them know about this class. Or, rather than suggest that someone attend, please consider an email blast to help me promote the class, and ask those who receive your email to pass it on to others. I would truly appreciate it. Thank you in advance.
Besides individuals or clients that you might know, good prospects are Realtors, Lenders, CPAs, insurance agents and financial planners for either themselves or their clients. If someone who wants this information cannot attend, then they can get almost all of the information from my book (Amazon link):
Wealth on Any Income: 12 Steps to Freedom
This class is NOT for day traders, investors or the stock savvy. It is for people who are struggling with how to set up a budget, get out of debt, how to start saving and investing, etc.
UCLA class info:
Moving from Debt to Wealth on Any Income
Course Open Reg# S7789U
Class description from the catalog:
If it seems like all the money you earn comes in one hand and just goes out the other, you're not alone. Over 90 percent of our population has not been taught the basics of handling money effectively and only an estimated 10 to 20 percent of American workers and business owners will retire feeling financially secure. In this seminar, participants learn a revolutionary system to move from debt to financial independence, a system which is consistently practiced by the wealthiest people in the country. Topics include how to set and achieve your financial goals, living within your income, getting out of credit card debt, saving 10 to 20 percent of your gross income each month, handling emergency spending without a financial disaster, and learning how to spend money. Students leave the seminar with practical techniques and strategies that can be implemented immediately. Enrollment limited. Advance enrollment highly recommended. Single admission at the door is $160 (space permitting); payment by check or credit card only.
Saturday, February 24, 2007
Tuesday, February 20, 2007
4 Steps to Keep the Home You Purchase
Keep the Home You Buy in 4 Steps
You may have been in a situation where you’ve qualified for a home loan, closed escrow, started making mortgage payments and several months later had a problem making your next payment. You’re not alone. Many homeowners have faced the same problem due to buying more than they could afford, but qualifying for the loan regardless.
Now that you’ve put out all your money for the down payment, re-painting, minor remodeling and some new furniture you’re afraid you may be loosing the house. This situation is far more common that you might imagine. According to Morgan Stanley, the default rate for homeowners who are 90 days late on their mortgage payments almost doubled from 7% in 2003 to 13% in 2006. How can these situations be avoided? The following 4 steps will help you to keep the home you purchased if you run into a financial bind. In addition, you’ll see if you need to change your standard of living, you’ll be prepared for emergency expenses, without creating a financial disaster, and you will ultimately be able to choice to work instead of have to work.
Step1. Create a long-term financial goal.
I call this deciding from the big picture instead of the details. Many times we are confronted with difficult choices: Should I buy this sweater in red or blue? Red or blue? Red or blue? The difficulty arises because this is the wrong question. It’s based on a detail and not a big picture, or long term objective. Some better questions would be: Do I need another sweater? If I didn’t have to work for a living, would I buy this sweater? What is the purpose I desire to fulfill by buying this sweater? Is the purchase of this sweater in alignment with my long-term goals?
Creating a long-term goal allows you to answer the last question I posed. If your objective is to save up and buy new furniture for cash, take a world-class vacation in three years, or retire in 15 or 20 years, then you can see if buying that sweater is in alignment with producing your long term goal or goals.
Step 2. Find out what your current financial picture looks like.
This is done with two or three forms. The first is a list of what you own (assets) and what you owe (liabilities) called a balance sheet. When you subtract what you owe from what you own, your net worth is the amount left over, provided this is a positive number. A negative amount would require more immediate attention. Make believe you were on your way to a new home of a friend, and got lost along the way. When you called your friend for directions, what would be their first question? “Where are you?” Correct? What a balance sheet does is tell you where you are financially at one moment in time. Just like you can’t get to your friend’s home without starting with where you are at the moment, you can’t create financial results if you don’t know from where you’re starting.
The second form is a cash flow form, or a listing of your income and expenses. Put how much money you earn each month on the left, and where you spend it each month on the right. Don’t forget to add in the items which don’t show up each month like car registration fees or maintenance and repairs, property taxes, fire insurance, back to school or special event clothing, holiday gifts, vacations and so on. Look over your checkbook register or credit card statements for the last twelve months to be reminded of what happened. I guarantee something like those items will occur in the future, and the money ought to be set aside now for them. For most families, this is generally 10% of their monthly income.
The third form depends on whether or not you have credit card debt. Only about one-third of the people with credit cards can pay off their balances in full each month. For the other two-thirds of the credit card population, (Which is about 80 million people!) create a list of all of the cards, the outstanding balances, monthly payments and interest rates. Look at these payments as a level amount. By setting aside 10% of your income to pay for the non-monthly expenses shown on the cash flow form, you can end the increasing credit card balances and over time pay them off in full. Also, look to see if you can transfer balances to lower rate cards. I recommend you learn how to handle money effectively. I do not recommend you refinance your home to pay off credit cards. Don’t secure your home for debts that are otherwise unsecured. Any quick and easy method to eliminate credit card debt is a wasteful solution. It’s like getting lipo-suction without changing your eating or lack-of-exercise habits.
Step 3. Track your spending to see if it’s in alignment with your long term goals.
Obviously, you can’t do this unless you’ve created a long-term financial goal from Step 1. Every millionaire I’ve met or read about knew in detail how much money was coming in, and where it was being spent. They were conscious of the flow of their money. After all, the money was created by trading the energy of their life for money. You’re doing the same thing, trading your life energy for money. Are you spending your life energy and feeling satisfied?
Use a blank check book register, rather than a random list like a spiral notepad, and create categories for the expenses that occur all month long. Include the unexpected ones. There is no need to track your mortgage payments because it is usually only once per month, and the same for the car payment. Track items like groceries, meals out, entertainment, clothing purchases, hobbies and so on. Millionaires do this to create wealth and to maintain wealth. If it’s good enough for them then it ought to be good enough for regular folks too. Right?
Step 4. Pay yourself first.
There’s something else millionaires do that we can all learn from. Besides paying themselves first by setting up an account with money to spend later (as I explained in the paragraph about the cash flow form in Step 2), pay yourself first money you will keep forever. Set aside 10%, or more, of every check you receive. This is the money you can invest so that at some point in the future work can become a choice, instead of a requirement. Some people retire and other people work at what they always wanted to do. Contribute the maximum to your 401(k) plan at work, or put money into an IRA, or buy stocks, mutual funds, or more real estate. If you set aside 10% of your income and earned 12% on your invested money, in 30 years you could have a portfolio which would generate annually three times more passive income than what you earned from your work.
With these four steps in place, you will see what it takes to meet your mortgage payments and maintain your standard of living, or change it if you need to. You will be prepared for emergency expenses, without creating a financial disaster, and you will ultimately be able to choice to work instead of have to work.
Send comments or questions to rennie@GabrielBooks.com
You may have been in a situation where you’ve qualified for a home loan, closed escrow, started making mortgage payments and several months later had a problem making your next payment. You’re not alone. Many homeowners have faced the same problem due to buying more than they could afford, but qualifying for the loan regardless.
Now that you’ve put out all your money for the down payment, re-painting, minor remodeling and some new furniture you’re afraid you may be loosing the house. This situation is far more common that you might imagine. According to Morgan Stanley, the default rate for homeowners who are 90 days late on their mortgage payments almost doubled from 7% in 2003 to 13% in 2006. How can these situations be avoided? The following 4 steps will help you to keep the home you purchased if you run into a financial bind. In addition, you’ll see if you need to change your standard of living, you’ll be prepared for emergency expenses, without creating a financial disaster, and you will ultimately be able to choice to work instead of have to work.
Step1. Create a long-term financial goal.
I call this deciding from the big picture instead of the details. Many times we are confronted with difficult choices: Should I buy this sweater in red or blue? Red or blue? Red or blue? The difficulty arises because this is the wrong question. It’s based on a detail and not a big picture, or long term objective. Some better questions would be: Do I need another sweater? If I didn’t have to work for a living, would I buy this sweater? What is the purpose I desire to fulfill by buying this sweater? Is the purchase of this sweater in alignment with my long-term goals?
Creating a long-term goal allows you to answer the last question I posed. If your objective is to save up and buy new furniture for cash, take a world-class vacation in three years, or retire in 15 or 20 years, then you can see if buying that sweater is in alignment with producing your long term goal or goals.
Step 2. Find out what your current financial picture looks like.
This is done with two or three forms. The first is a list of what you own (assets) and what you owe (liabilities) called a balance sheet. When you subtract what you owe from what you own, your net worth is the amount left over, provided this is a positive number. A negative amount would require more immediate attention. Make believe you were on your way to a new home of a friend, and got lost along the way. When you called your friend for directions, what would be their first question? “Where are you?” Correct? What a balance sheet does is tell you where you are financially at one moment in time. Just like you can’t get to your friend’s home without starting with where you are at the moment, you can’t create financial results if you don’t know from where you’re starting.
The second form is a cash flow form, or a listing of your income and expenses. Put how much money you earn each month on the left, and where you spend it each month on the right. Don’t forget to add in the items which don’t show up each month like car registration fees or maintenance and repairs, property taxes, fire insurance, back to school or special event clothing, holiday gifts, vacations and so on. Look over your checkbook register or credit card statements for the last twelve months to be reminded of what happened. I guarantee something like those items will occur in the future, and the money ought to be set aside now for them. For most families, this is generally 10% of their monthly income.
The third form depends on whether or not you have credit card debt. Only about one-third of the people with credit cards can pay off their balances in full each month. For the other two-thirds of the credit card population, (Which is about 80 million people!) create a list of all of the cards, the outstanding balances, monthly payments and interest rates. Look at these payments as a level amount. By setting aside 10% of your income to pay for the non-monthly expenses shown on the cash flow form, you can end the increasing credit card balances and over time pay them off in full. Also, look to see if you can transfer balances to lower rate cards. I recommend you learn how to handle money effectively. I do not recommend you refinance your home to pay off credit cards. Don’t secure your home for debts that are otherwise unsecured. Any quick and easy method to eliminate credit card debt is a wasteful solution. It’s like getting lipo-suction without changing your eating or lack-of-exercise habits.
Step 3. Track your spending to see if it’s in alignment with your long term goals.
Obviously, you can’t do this unless you’ve created a long-term financial goal from Step 1. Every millionaire I’ve met or read about knew in detail how much money was coming in, and where it was being spent. They were conscious of the flow of their money. After all, the money was created by trading the energy of their life for money. You’re doing the same thing, trading your life energy for money. Are you spending your life energy and feeling satisfied?
Use a blank check book register, rather than a random list like a spiral notepad, and create categories for the expenses that occur all month long. Include the unexpected ones. There is no need to track your mortgage payments because it is usually only once per month, and the same for the car payment. Track items like groceries, meals out, entertainment, clothing purchases, hobbies and so on. Millionaires do this to create wealth and to maintain wealth. If it’s good enough for them then it ought to be good enough for regular folks too. Right?
Step 4. Pay yourself first.
There’s something else millionaires do that we can all learn from. Besides paying themselves first by setting up an account with money to spend later (as I explained in the paragraph about the cash flow form in Step 2), pay yourself first money you will keep forever. Set aside 10%, or more, of every check you receive. This is the money you can invest so that at some point in the future work can become a choice, instead of a requirement. Some people retire and other people work at what they always wanted to do. Contribute the maximum to your 401(k) plan at work, or put money into an IRA, or buy stocks, mutual funds, or more real estate. If you set aside 10% of your income and earned 12% on your invested money, in 30 years you could have a portfolio which would generate annually three times more passive income than what you earned from your work.
With these four steps in place, you will see what it takes to meet your mortgage payments and maintain your standard of living, or change it if you need to. You will be prepared for emergency expenses, without creating a financial disaster, and you will ultimately be able to choice to work instead of have to work.
Send comments or questions to rennie@GabrielBooks.com
Thursday, February 15, 2007
The BIG picture
A young couple came into the office today for some financial coaching. The husband wants to start a personal service business and his wife does administrative work. She wants security and he has an entrepreneurial bent. She wants to set aside money for their retirement and wants to know how that can be done because they also need money to get his business started.
This led us into the conversation about the big picture versus the details. The BIG picture is retirement. The details are stocks, 401(k), social security, real estate, mutual funds, insurance, etc. Too often I find people focus on the details to the exclusion of the big picture. As an example, if you were to cross the street and focus only on the details, like how high the curb is, are there cracks in the street, an open sewer drain, puddles, whatever, and each step you took was to avoid problems with the details you could get killed. Why? Because you must first see if there are any cars comming from any direction. That's the big picture.
When it comes to money, it seems easier for most people to focus on the details and they are completely disconnected from the big picture. The big picture could be having enough money so that work becomes a choice, instead of a requirement, at age 60, or 55, or 75 or whatever. The details are, "Should I remodel the kitchen or bathroom?" Well, maybe neither one should be remodeled, or both should be done. The question should be, "How will remodeling fit into my big picture of retirement at at 60?"
Rennie
This led us into the conversation about the big picture versus the details. The BIG picture is retirement. The details are stocks, 401(k), social security, real estate, mutual funds, insurance, etc. Too often I find people focus on the details to the exclusion of the big picture. As an example, if you were to cross the street and focus only on the details, like how high the curb is, are there cracks in the street, an open sewer drain, puddles, whatever, and each step you took was to avoid problems with the details you could get killed. Why? Because you must first see if there are any cars comming from any direction. That's the big picture.
When it comes to money, it seems easier for most people to focus on the details and they are completely disconnected from the big picture. The big picture could be having enough money so that work becomes a choice, instead of a requirement, at age 60, or 55, or 75 or whatever. The details are, "Should I remodel the kitchen or bathroom?" Well, maybe neither one should be remodeled, or both should be done. The question should be, "How will remodeling fit into my big picture of retirement at at 60?"
Rennie
Tuesday, February 13, 2007
Loosing a dream home
Nancy (not her real name) called me on Friday, February 9th, regarding her parents. She had given them enough money to cover four months of their mortgage payments so they would not loose their "dream home" in foreclosure. Six months later they are in the same position. I held a call the next day, Saturday, with Nancy and her parents, Mike and Vicky.
Many of the following details have been changed so the confidentiality of their situation will not be breached. It turns out that Mike and Vicky were living in England a few years ago and Mike decided he wanted to move back to the US and settle in Virginia where they used to live. They build a custom home and then sold it and built a bigger home, their "dream home."
Unfortunately, no one bothered to see if the costs to maintain that home fit into Mike's budget, and they don't. Vicky used to do art work and write. Now she has to do work she can't stand to bring in more money to support the "dream home" and it is still not enough. They are now back to a similar situation like the first time when Nancy gave them money to save the house.
Mike and Vicky are in their 50's, so it is not like they do not have the ability to earn money any longer. These are not parents in their declining years. Of course Nancy does not want to continue to support her parents who seem to lack the forsight to plan ahead. Yes, the house is for sale, but it has been on the market for six months now with no buyer in sight.
What is the point of all this? When you look down the road at any plan you have, new home, new career, retirement, college for children, whatever, you must factor in your ability to handle the financial challenge. While very few people have been taught by their parents or in school how to budget, the information is out there. The forms to use are out there. Workbook and cassette programs are out there. Books are out there. If you have an interest in a SIMPLE budgeting form, let me know, and I will post it to the blogsite. I do not yet know how, but I will find out.
My book, Wealth On Any Income, is a great start.
Amazon link: Wealth on Any Income: 12 Steps to Freedom
Rennie Gabriel
12:28:00 PM
Many of the following details have been changed so the confidentiality of their situation will not be breached. It turns out that Mike and Vicky were living in England a few years ago and Mike decided he wanted to move back to the US and settle in Virginia where they used to live. They build a custom home and then sold it and built a bigger home, their "dream home."
Unfortunately, no one bothered to see if the costs to maintain that home fit into Mike's budget, and they don't. Vicky used to do art work and write. Now she has to do work she can't stand to bring in more money to support the "dream home" and it is still not enough. They are now back to a similar situation like the first time when Nancy gave them money to save the house.
Mike and Vicky are in their 50's, so it is not like they do not have the ability to earn money any longer. These are not parents in their declining years. Of course Nancy does not want to continue to support her parents who seem to lack the forsight to plan ahead. Yes, the house is for sale, but it has been on the market for six months now with no buyer in sight.
What is the point of all this? When you look down the road at any plan you have, new home, new career, retirement, college for children, whatever, you must factor in your ability to handle the financial challenge. While very few people have been taught by their parents or in school how to budget, the information is out there. The forms to use are out there. Workbook and cassette programs are out there. Books are out there. If you have an interest in a SIMPLE budgeting form, let me know, and I will post it to the blogsite. I do not yet know how, but I will find out.
My book, Wealth On Any Income, is a great start.
Amazon link: Wealth on Any Income: 12 Steps to Freedom
Rennie Gabriel
12:28:00 PM
Sunday, February 11, 2007
First posting
Welcome to the Valley Real Estate and Money blog. My intention is to provide news, comments, thoughts and guidance on issues related to real estate in the San Fernando Valley and financial issues anywhere in the country.
I think it is vital that you know something about someone who professes to know about the topic upon which they write:
My name is Rennie Gabriel and I have been a Certified Financial Planner (CFP), Chartered Life Underwriter (CLU) and book publisher with about 80 titles published and in distribution on consumer education in real estate and finance. (www.GabrielBooks). Since 1996 I have taught an extension course at UCLA based on my own book, Wealth On Any Income. Locally, I own and manage several apartment buildings through various corporations and limited partnerships, so my comments should be appropriate for those who own or invest in real estate, and for those who live in it.
When it comes to financial issues, I have been broke. I had been divorced twice and had to start over again financially for the second (and last) time in 1998. I know what it is like to have no money to buy groceries for the family, have creditors want money from me that I did not have, and I also know what it is like to have vast sums of money at my disposal and feel secure in my net worth.
Personally, I am married for the last time to an amazing woman, Dianne Merryl. She has a daughter who is now 17. Oh joy! (Please insert sarcastic feelings here.) Dianne is a wonderful human being and a top producing real estate agent with Prudential Realty in Encino. Her and her partner's website is www.RobertandDianne.com As an example of her wonderful nature, her partner Robert is her ex-husband, and they are still able to work together. That also says a lot about Robert as well. He is a wonderful man and we all get along very well. So well in fact that the three of us invest in real estate together.
My own children, Ryan and Davida are grown, very successful in their own lives and have their own families. I have three grandsons, two from my daughter and one from my son. I could spend a lot of time here bragging about my children, their spouses and my grandchildren, but this is not the format for that.
For many years I provided financial coaching through my company, The Financial Coach, Inc, (www.financial-coach.com) and supported individuals to achieve their personal goals and I coached other financial professionals, like CPAs, insurance agents and financial planners to achieve their pesonal and business goals. I had several financial planning firms and construction companies as my coaching clients. I still do some work in this area, but on a very limited and selective basis.
I hope you enjoy my future postings, find value in the comments, and can take action on my suggestions. They will lead to your personal feelings of wealth and satisfaction.
I think it is vital that you know something about someone who professes to know about the topic upon which they write:
My name is Rennie Gabriel and I have been a Certified Financial Planner (CFP), Chartered Life Underwriter (CLU) and book publisher with about 80 titles published and in distribution on consumer education in real estate and finance. (www.GabrielBooks). Since 1996 I have taught an extension course at UCLA based on my own book, Wealth On Any Income. Locally, I own and manage several apartment buildings through various corporations and limited partnerships, so my comments should be appropriate for those who own or invest in real estate, and for those who live in it.
When it comes to financial issues, I have been broke. I had been divorced twice and had to start over again financially for the second (and last) time in 1998. I know what it is like to have no money to buy groceries for the family, have creditors want money from me that I did not have, and I also know what it is like to have vast sums of money at my disposal and feel secure in my net worth.
Personally, I am married for the last time to an amazing woman, Dianne Merryl. She has a daughter who is now 17. Oh joy! (Please insert sarcastic feelings here.) Dianne is a wonderful human being and a top producing real estate agent with Prudential Realty in Encino. Her and her partner's website is www.RobertandDianne.com As an example of her wonderful nature, her partner Robert is her ex-husband, and they are still able to work together. That also says a lot about Robert as well. He is a wonderful man and we all get along very well. So well in fact that the three of us invest in real estate together.
My own children, Ryan and Davida are grown, very successful in their own lives and have their own families. I have three grandsons, two from my daughter and one from my son. I could spend a lot of time here bragging about my children, their spouses and my grandchildren, but this is not the format for that.
For many years I provided financial coaching through my company, The Financial Coach, Inc, (www.financial-coach.com) and supported individuals to achieve their personal goals and I coached other financial professionals, like CPAs, insurance agents and financial planners to achieve their pesonal and business goals. I had several financial planning firms and construction companies as my coaching clients. I still do some work in this area, but on a very limited and selective basis.
I hope you enjoy my future postings, find value in the comments, and can take action on my suggestions. They will lead to your personal feelings of wealth and satisfaction.
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