When I get this question, I try to shift the conversation away from “Which strategy is best?” and towards “Are you sure you want to pay off your mortgage early at all?”  While I think it’s admirable to get out of debt and stay out of debt, I don’t believe “paying off your mortgage early” should be your number one financial priority.

“Paying off your mortgage early may NOT be

the smartest financial strategy for you.”

Instead, I believe you should use your financial resources to prepare for the future and all those mean, nasty twists and turns that life can throw at you.  I’m not suggesting a gloom-n-doom approach to the future, but we just don’t know what will happen, and paying off your mortgage early may NOT be the smartest financial strategy for you.

Focus FIRST on Building Liquid Assets 

My advice is to focus first on building liquid assets (resources you could access with little difficulty to pay for stuff) vs. paper wealth (resources that cannot be accessed easily).  Equity in your home falls under the “paper wealth” category because it is difficult to access in an emergency and you may not be able to access it at all when you really need it.

An example of what I’m talking about came across my desk recently.  The applicant wanted to refinance his home to access some of his paper wealth.  For several years, he had been paying extra on his mortgage and only owed about $70,000 on a home worth around $400,000.  On paper, things looked good, but…

…he was facing total financial collapse 

I’ll leave the gory details of his set-backs out of my story, but when he came to me, his wife had left him and the divorce had drained his bank accounts, he had lost his ability to work due to an injury and lost his business, he was 6 months behind on his mortgage payments, and he was facing total financial collapse.  He needed me to help him access some of his $330,000 in equity (paper wealth) to live on. 

All that “paper wealth” made his home an enticing target.

But because his credit scores were bad and his income was gone, he didn’t qualify for a new loan.  The bank who owned his mortgage – that same bank he had been paying extra to all those years – wouldn’t help him.  I’m sure they saw his home as a great foreclosure opportunity – all that “paper wealth” made his home an enticing target.

His only solution was to try to sell the home before it was foreclosed on in order to keep some of his “paper wealth”, but since he had been so determined to keep his home – not wanting to uproot his children who’s mother had just abandoned them – he failed to act quickly enough and now it was too late.

I wish I could tell you his story had a happy ending, but it didn’t. 

What I can tell you is that if this man had had $330,000 of “liquid assets” instead of $330,000 of “paper wealth” – his story would have turned out much differently. 

So if you are prepaying your mortgage now, but don’t have enough liquid assets available to handle life’s emergencies, please remember: 

You cannot go grocery shopping and tell the cashier, “I don’t have any money, but my

mortgage is paid off”.  Even on double coupon day, that won’t buy you any fruits and veggies.

Okay, I think I get it now and I’m ready to give you the scoop on the new tax credit extension.  I know this news has been circulating around for awhile now, with many industry professionals trying to be the first to tell you the new rules, but up until now – I still had questions that I couldn’t find answers to and much of the information I was getting didn’t jive with other information I was getting.  So, this may not be the first you’ve heard about this stuff, but I believe it is accurate. 

No big changes to the First Time Homebuyer tax credit, except now you can claim it if you’re in a higher income bracket.  (Questions on this?  Easy to find income limits on-line.)   Extension applies to homes under contract by April 30th, 2010 and the deal closed by June 30th, 2010.

For existing homeowners, you can get up to $6,500 if you buy a new primary residence (same contract and close dates).  You don’t HAVE to sell the current primary residence, but you do need to live in the new primary residence.  (And don’t think you can cheat on this – they’ll be checking!  With the many fraudulent claims the IRS received for the current programs – which was claimed by toddlers and pets and people who didn’t even buy a home – don’t expect the IRS to let you skirt by on this requirement.  There are MANY places they can find out, the most obvious ones being the mailing address you put on your tax filings in the next few years and your documentation of rental home income – Oh, and there’s a census coming up next year too!)

In order to qualify, you MUST have owned and lived in your old or soon to be old home for at least 5 years and sold it in the past 3 years.  This is the one really confusing part of the bill – but I think I have it now, and I hope I can explain it to you.

Example A:  Owned a home for 5 years and sold it in 2008 and have rented since.  You qualify for the tax credit because you satisfy the 5 year rule and sold in the past 3 years and didn’t own another primary residence since then.

Example B:  Owned a home for 5 years, sold it in 2008 and bought another one right away.  Now you want to sell this home and buy another one.  You do NOT qualify for the tax credit because you’ve owned your current home less than 5 years.  The tax credit is based on the most recent home you’ve owned.

Example C:  Owned current home for 5 years, want to buy a new home and turn the old one into a rental home.  You qualify for the tax credit.  But if you do not live in the new home as your primary residence for at least 3 years, you will be obligated to pay back the tax credit.  And if you are found to be claiming the tax credit fraudulently, you’ll also have severe tax penalties to deal with too.

Example D:  Owned a home for 5 years and sold it in June 2006 and have rented since.  You don’t qualify for the existing homeowner tax credit because you qualify for the $8,000 first time homebuyer tax credit.  Anyone who hasn’t had homeownership interest in a home in the past 3 years qualifies as a first time homebuyer.

So, that’s the basics.  (There are other rules about joint ownership, community property rules, parents co-signing for kids, etc – too lengthy to get into here).  I hope that helps you make sense of the new law.

“Should I pick an adjustable rate mortgage, like a 3/1 or 5/1 ARM, or go with a 30 year Fixed Rate?”  How many times has a buyer or borrower asked you that question?  How do you help them choose in a way that makes sense to them?

I’ve found that “Pizza” is the best illustration to use to help them understand this question.  If I give this illustration, it all of the sudden makes sense to a borrower and allows them to make an informed and confident decision.  Here’s what I’m talking about:

When you go in to a pizza parlor to order a pizza, you’ll be faced with the decision of “What Size” to choose.  Some places have only a couple of sizes to choose from, other places have as many as 6 sizes to pick from.  How do you choose?

Get Maximum Value for your Money 

Well, if you’re looking to get maximum value for your money, you can start calculating the cost per square inch of each size.  Since pizzas are round, you’ll have to pull out your handy geometry cheat sheets (I can still see mine faintly etched on my forearm – where I wrote down the formulas to help me get through those high school math tests) to get through the diameter, radius, pi-r-squared issues.

You’ll soon discover that in most pizza places, the larger sizes cost you less per square inch than the smaller sizes.  (This is why, when buying for large groups, you avoid buying individual personal-sized pizzas for each person and instead go for the largest sizes for everyone to share.) 

Why would you EVER buy a smaller size? 

After you’ve figured out that you get more value per square inch out of the largest sizes, why would you EVER buy a smaller size?  The answer, when buying pizza, is obvious to you.  If you’re by yourself, for example, and buy an extra large pizza because it’s the best per-square-inch value, but eat only a few slices and throw the rest away – you’ve wasted your money.  Yes, you bought the best “total” pizza value, but by NOT USING the entire pizza – you wasted your money. 

The answer to your pizza buying size question, therefore, comes down to “How much pizza will I use?”  To get the most for your money, you should always buy the largest size you will actually use.  And so it is with choosing a mortgage ARM or Fixed Rate product.  Huh?

Is a 30 Year Fixed Rate ALWAYS the Best Value? 

The assumption I will ALWAYS use when comparing an ARM with a Fixed Rate mortgage is that over the entire 30 year term, the 30 year Fixed Rate loan will cost you less than an ARM – which tends to start out with a lower interest rate for a few years and then will eventually adjust higher.  So if you’re going to keep the loan for the entire 30 year period, a 30 year Fixed Rate loan is – just like the extra large pizza – the best value per year (per square inch).

BUT, if you take out a 30 year Fixed Rate loan and only keep it for a few years, it is just like buying that extra large pizza, eating a few slices, and throwing the rest away.  If you ABSOLUTELY KNOW that you are only going to keep that mortgage for a few years, then you need to give serious consideration to choosing an ARM if the rate you can get is less than the 30 year Fixed Rate.

Be sure to buy ENOUGH! 

A final word of caution:  Be sure to buy ENOUGH pizza to start with.  It is not good to find out you don’t have enough to feed everyone because it is a hassle and expensive to go back and order some more after people have already started eating.  Likewise, be sure to get ENOUGH term on your ARM to start out with.  If you think you’ll stay in the home for 3 years, but aren’t 100% sure, you may want to get a 5/1 ARM to start with – just to be sure you’ll have enough. 

Don’t get caught short – almost EVERYONE expects rates to rise significantly in the future, so don’t get stuck with a house payment you can’t afford.

My business is mortgage lending and I love the whole business of money.  I hope you’ll feel my passion for people, my hate for the shackles of excess debt, my anguish for those who are struggling, and my love for history – especially the history of success and triumph!

As you read the articles, my hope is you’ll be entertained, educated, and enlightened.  There are suggested resources you can use to help you along the way.  I’m constantly posting new articles and new information, so please check back often.  Thanks for reading!

There are two basic types of Home Equity Loans. You can either do a defined loan with set terms (HEL) or you can do a flexible type of loan known as a Line of Credit (HELOC). The type you choose has a lot to do with your feelings about risk and what you plan on using the loan for. A quick look at your options with help you decide which is best for you.

Difference Between HEL’s & HELOC’s

Home Equity Loans (HEL):

The loan amount is set, the interest rate is typically a fixed rate (but some lenders offer adjustable rate HEL’s). The repayment term is set. So for example, your HEL might look like this: $50,000 loan @ 9.0% fixed-rate interest with repayment over 15 years. At closing, you’d get your full loan amount (less any closing costs unless you pay for these yourself outside of the loan – which would be unusual) and you’d begin making a regular monthly payment to pay back the loan. Because this example is a fixed rate loan, your monthly payment wouldn’t change over the life of the loan and at the end of 15 years, you’d have it all paid back.

Home Equity Lines of Credit (HELOC):

HELOC’s typically come with variable interest rates – although there are some that offer fixed rate options. On a line of credit, your payment each month will be based on how much money you have borrowed against your “line”. For example, if you set up a $50,000 line, but you only borrow $30,000 of it, your payment will be based on that $30,000 balance – much like a credit card monthly payment is set. As you pay down the balance, your monthly payment will go down. But with a HELOC, you are given the option to borrow more of your available line at any time. You don’t have to ask anyone permission to access it.

You are usually given a checkbook or a debit-type card and you can spend your line any time you want. When you do, your payments will go up based on how much you borrow.

You can even pay off the entire balance of the HELOC, and as long as you don’t close the account (or the lender closes it for you – which can happen), you can re-access the line again – still without asking anyone’s permission to do so.

Unlike a HEL, when you open a HELOC, you often have the option of how much money you want to begin with – known as your initial “draw”. Some HELOC’s require that you start with a minimum draw amount and others may let you start out with no initial draw at all – meaning you’re going to need that money sometime soon, you just don’t want to take it out now and start paying interest on it before you need to.

What’s The Costs?

Many HEL’s and HELOC’s have similar types of closing costs to first mortgages, but usually, because the loan sizes aren’t as large, they are not nearly as high. You’ll typically need an appraisal done to determine the value of the home – but sometimes lenders waive this requirement for you, depending on the mortgage markets and your risk profile. You also will usually need some sort of title work and various other mortgage-type fees. Some of these fees go to the lender, some go to pay for the third-party services on your behalf.

No Cost Options?

There are many “no-cost” options for 2nd mortgages, depending on the lender and your loan criteria. Rates and terms can vary widely, so it doesn’t hurt to look around a little bit before choosing a lender. Often times, your own bank can be a good source for a low-cost option, so check those signs hanging in the lobby for information.

Currently in the mortgage markets, many lenders have restricted their 2nd mortgage programs or eliminated them all together. This is likely a temporary situation as lenders like having their loans secured by real estate – at least in “normal” real estate markets. But as it is, you may need to check around a little more to find good options, and you’ll likely need to have a strong credit profile and a good equity position in your home. (If your 1st mortgage is already as high as the value of your home – you don’t have any available equity to access. But if you owe less than your home is worth, you can probably find a HEL or HELOC option if you need it.)

AND, there is a provision in there that says if you stay in this home for 36 months, YOU DON’T HAVE TO REPAY THE CREDIT!  It is yours to keep, no payback, no penalty.  This is different from the previous $7,500 credit that DID have to be repaid.  If you bought your home in 2008 under the $7,500 rules – those rules still apply.  That credit still has to be repaid over the 15 year period.  Sorry.

Now, questions you have are something like this:

How soon do I get the credit?  If you buy in 2009, you can get the credit very quickly if you’d like (and why wouldn’t you want to get it right away?).  If you haven’t filed taxes yet this year, just include this credit with your filing (and it is my understanding that even if you don’t have to file a tax return – you should file anyway and claim the credit).  If you have already filed this year, you can simply file an amended return and claim the credit.  You do NOT have to wait until next year to claim this.

Are there income limits?  Yes.  If you are a single filer, you can make up to $75,000.  Married filing jointly can make up to $150,000.  If you make a little more than this, check with you tax attorney or the IRS guidelines for specifics on partial tax credits available.

What happens if I sell or move before the 36 months?  If you sell the home or move and rent it out in the next 36 months, you’ll have to repay the $8,000.  So, if you’re buying this year and claim the credit, try to buy something you want to stay in for at least 3 years.  Otherwise, say bye-bye to this big benefit.

If you are considering buying a home this year – or already have – make sure you get full details of this new law.  I am not a tax attorney and cannot give legal advice on such matters, but the basic provisions of “you have to buy in 2009 BEFORE Nov 30 to qualify”, “$8,000 is the agreed-to size of the credit”, “36 months is the amount of time you have to stay in the home”, and “this will only be for first time buyers” are pretty clear.  Rumors of different proposals for non-first time homebuyers or for larger credit amounts didn’t happen – this is what we got.

This is great news for new buyers – so let’s get out there and buy, buy, buy – and great news for sellers who have been waiting for new buyers to offer, offer, offer.  Interest rates continue to be awesome – we have plenty of money to lend – our closing times are still terrific – home prices are incredible – and I’m still willing to take on new clients (ain’t that nice of me?) – so what are you waiting for?

The stories I write, with maybe some historical pictures of either the home itself or the people or events I write about, end up on the backs of listing flyers, on blog sites, linked to MLS listings, displayed in the home during open houses, and are used to blanket the surrounding neighborhood, etc. The intention is to raise a little more awareness of the listing, create some intrigue and mystery or elevate the historical significance of the home, and most of all – to increase the emotional attachment a potential buyer might have for the home.

Who are these people?

It is amazing what you can find with a little internet research. I often start my search with County Records – available in most communities on-line. Go through the sales history of the home and make note of sellers and buyers names. Who are these people? Find out! Google the names, check the archives of local newspapers, check out the public library.

If the names of the people aren’t “significant”, then what was happening during the time the home was built or sold or what changes has that neighborhood seen over the years. There are stories that can be told about almost any home.

What a Wonderful Tribute!

A recent example of such a story is below. This took me a few hours to put together. I knew absolutely nothing about the home when I started, and the agent knew very little himself. I wrote a rough draft on what I could find out about the people and then asked the agent to “get approval” for the story from the seller (which was the daughter of the previous owners). Once she saw the story we were trying to tell, she was more than willing to share extra details and give us a few more tidbits. With her input and the research, I ended up with this story.

And after blasting it out to my contact lists and putting it on my blogs and blanketing the neighborhood along with open house invitations, the listing has become a hot topic around town. I have no doubt that this story will help find a buyer sooner than a listing with no story.

(And just think how this real estate agent can now use this listing to gather in more similar listings around town! If you don’t believe people want their stories told like this – you are wrong! What a wonderful tribute and gift you are giving when you include this strategy with your listings!)

Here’s the story

(I dressed it up on the flyers with pictures and graphics of course):

Rose Bowls, Blueberries, Daffodils, and Silent Snap-Counts

The last time this home came on the market was in 1947, so when I say that this “For Sale” offering is truly a rare and special event, I don’t think I’m over-exaggerating the unique opportunity that sits here before you. The home and surrounding land is known to local residents as “The Bond Blueberry Farm”, and this home has a wonderful place in the history of the Puyallup Valley and beyond.

Chuck Bond was a star for the University of Washington football team – one of many such UW stars to come from Puyallup High School over the years. Chuck was Captain of the Huskies team that faced the University of Pittsburgh in the 1937 Rose Bowl. Chuck was a defensive tackle but as good as he was, he and his teammates were unable to stop the Panther’s “Dream Backfield” of Bobby LaRue, Frank Patrick, Bill Daddio, and Marshall Goldberg who rolled up 254 yards and two rushing touchdowns enroute to a 21-0 victory.

One thing that was interesting about that Husky’s team was the way they won a key victory over powerhouse USC to secure that Rose Bowl birth. USC’s homefield advantage featured rowdy fans with megaphones and a HUGE marching band that would play as loud as possible while opponents had the ball, making communication and play-calling very difficult (Sound familiar Seattle Seahawks fans?).

So the Huskies came up with a unique system of silent hand signals to call plays – much like many of today’s NFL teams use. Years later, when asked about the “new” system of silent snap counts that teams were putting in to combat the noise levels at the Kingdome, Chuck responded, “We used them in 1936 to help us beat USC. You’d think that now, 50 years later, the pros might have perfected that particular tactic.” After graduation, he was drafted and played 22 games as an Offensive Tackle for the NFL Washington Redskins.

Chuck returned to Puyallup, married his sweetheart Francis, and in 1947 they purchased this home and started their blueberry farm. (Oh, and their son, Chuck Jr. later played for two UW Rose Bowl Teams in 1961 & 1964 – also playing Tackle. They were the first Father/Son Rose Bowl players in UW history.)

Chuck and Francis worked hard raising and selling their blueberries together, but they also loved to play hard too. They were avid tennis players and formed a formidable doubles team. The family joke was that Chuck would use his long arms to cover most of the court but he made Francis do all the running to get to the tough shots.

In 1971, the Bonds built the Puyallup Valley Tennis Club on a section of their property. They hosted tournaments and some of the local high schools would use the courts for matches and try-outs over the years. After Francis passed away, Chuck met Mary in 1979 who also loved to play tennis and she became Chuck’s new double’s partner and second wife. The Puyallup Valley Tennis Club later became the location for Puget Sound Gymnastics – which is still using the facility today.

Chuck and Francis (and Mary) were active supporters of Puyallup, including our famous Daffodil Festival. They were an important part of Puyallup history, and their beautiful brick farm home with the amazing interior woodwork, lots of square footage, lush acreage nestled into a wooded hill (the perfect combination of “secluded” and “close in”) is an important example of local historical architecture.

Don’t miss your chance to own this home! Make an offer today. Last offered For Sale in 1947 – If history holds true, the next time you’ll get an opportunity to own this home, if you miss out this time, should be around 2,071.

(Please contact me for your financing needs. I’d love to help you write the next chapter of this home’s history!)

In one of Andy Rooney’s books, he had a chapter about what’s wrong with American society (actually, that doesn’t narrow it down much because most all of what he wrote had something to do with what’s wrong with American society). But this particular chapter really hit me as being a “Wow, I never thought of it like that before.”

Boys Don’t Tinker Anymore

Rooney said that the reason our society is headed in the wrong direction and why our economy is in danger of collapsing someday is because “Boys don’t Tinker anymore”. He went on to describe growing up in an America still feeling the effects of the Great Depression in the 1930’s. When something broke, you fixed it. Nothing got thrown out until it couldn’t be held together any longer. Every town had a local fix-it shop, with clerks who actually knew how to fix things. Every garage was stocked with hand tools, clamps, vices, spare parts, and duct tape.

When something finally did need replacing, the old unusable item was given to the boy in the family who would tinker with it – maybe getting it to work again, maybe using the parts to make a go-cart or a rocket ship to Mars. Something broke and any eight year old boy with a Philips Head and glue could get it going again. “Assembly Required” meant “forget these directions” and feeling proud if you didn’t need all the parts to get it working.

Extra Parts = Extra Points!

But boys don’t tinker anymore today, Rooney points out. Something breaks, it gets tossed in the trash. Or it doesn’t break – it’s just old – so it gets replaced by the newer model anyway – because ya gotta keep up with the newest thing. Fix something? Are you kidding? We don’t fix things anymore. Don’t believe me? Quick, give me directions to the nearest fix-it shop.

Don’t Sell Me No Good Bargain!

This week, I read an article about First Time Homebuyers, and I immediately thought of Andy Rooney’s tinkering observation: The article said, “A recent survey found that first-time homebuyers’ expectations may be too high relative to their current financial buying power. Up to 81% of today’s first-time homebuyers consider move-in conditions very important, with only 7% looking to purchase homes they could buy at a lower price if they renovate themselves.” (Seriously? Only 7%???)

Whatever happened to the “buy the ugliest house in a great neighborhood” school of real estate investing? Put a little love and elbow grease into your ugly home purchase and watch it become something you love AND grow in value. Instead, we’re too impatient for that. The home has to be perfect before we move in. We spend more than we can afford. And all because we just don’t know how to tinker anymore. Andy Rooney wrote that book back in the 1980’s and warned of a doomed society with no tinkerers. Hmmm…

Huge Opportunity for Tinkerers!

It’s time to get back to smart investing, smart spending, smart home buying – so if you have “tinkering” skills, what a HUGE opportunity for you to buy a bargain! AND you’re only competing against 7% of the other first time homebuyers out there on those fixer-uppers. Let those other 93% fight over the new construction and perfect condition homes and pay too much for them. You can pretty much name your price on something less than perfect.

The housing market is the same way. For many years, it didn’t really matter what house you bought. Real estate values were going up so fast – you just needed to buy “something”, and if you didn’t like it – so what? Keep it for a little while, flip it for a profit, and buy what you really want later. Real estate was a no-lose investment. Buy it and it’ll be worth more tomorrow…

Real Estate “WAS” a No-Lose Investment

But times have changed, and there’s a “Flight to Quality” going on in real estate now too. Buyers are being much more selective about what they buy – which is the way it should have been all along. And the best “Flight to Quality” buying technique is the old “Buy the ugliest house on the block” strategy.

If you’ve got fix-it-up skills, you can still use real estate to make yourself wealthy. You get the ugly house in a good neighborhood, fix it up to the same quality level as the rest of the homes around you, and you’ve just created extra Quality – extra Value. This was an extremely common home buying and wealth-building strategy for many years in America, but is rarely used these days. So again, if you’ve got the skills, you have a HUGE advantage in real estate right now.

No Fix-Up Skills? No Problem…

Even if you don’t have the skills to do-it-yourself, there are terrific opportunities to pick up fixer-upper distressed properties at bargain prices and using rehab financing and construction loans to pay for contractors to do the work for you. Ask your lender about the FHA 203K Streamline Rehab Purchase loan (Whew! Big name). You can use an FHA loan to buy the home and finance an additional $35,000 in home repairs above the purchase price. Find a home that needs a little love, hire a contractor to make it good as new before you even move in, and you can end up having 10-20% equity in the home right off the bat. Very cool! And a GREAT way to buy a quality home at a bargain price – a great way to build wealth! (Not to mention helping to renew a neighborhood.)

Buy Low, Sell High – Some Things Never Change

So why don’t more people buy their home this way? Stay tuned for the next article titled “Whatever Happened to Buying the Ugliest House on the Block?” (after Christmas.) Just remember, real estate has helped build more fortunes in the country than anything else, and even during a downturn in the overall market – you can still find great bargains and build your wealth, if you buy low and sell high. Just make sure what you are buying low has good potential to be worth more later on.

I also told you, in a kind of snotty way, that getting this $500 in the bank was the first step towards home ownership, and if you weren’t able to do this first step, then you should give up your dream of owning a home.

Well, that was down-right RUDE!

Yes, it was rude – but it was also true. It is easy to preach at you about things you should be doing, but it is quite another to offer practical solutions. And I’m a practical solution kind of guy. Step one was to create the cushion in your checking account. Step two and three are below.

Three steps ANYONE can do that will put $500 in the bank right away. So, again, if you can’t manage to get the $500 in the bank – even after I show you this anyone-can-do-it 3-step plan, well, just keep renting and miss out on the most proven wealth-building vehicle (home ownership) that there ever was and ever will be. (Oops! I got snotty again there!)

Step 2 to $500 in the Bank

Step 2 may seem silly to you, and right off you’ll think, “Oh, that will do me a lot of good – NOT!” but come on, just play along! How many other debt management, wealth-building, how to buy a home articles have you read that haven’t gotten you anywhere? I’m guessing, quite a few. But this step is so stinking easy to do, and it will get you STARTED, that you just need to do it. If you don’t have a pile of cash in the bank right now – then DO THIS!!!

Here’s what you do: Go through all your coat pockets, cups in the laundry room, dresser drawers, car ashtrays, couch cushions, etc., and gather up all your loose change. (Loose change? Are you serious? Hey, just do it – you’ll be shocked how much change you have. And it doesn’t even matter how much you have. 37 cents? $20? Doesn’t matter.)

“I’d like to open a savings account with this $2.54…”

Once you’ve gathered up your coins, head to your bank and get some of them free paper coin rollers. While you’re there, find out about how to open a savings account – any rules you need to know. Then head home and roll the coins up. You’ll use this as the opening deposit in your savings account. (Yes, most banks will let you open a new savings account for as little as $1.00.)

How does this help you? It gets you started. You’ve actually taken an action step. You’ve started to build real momentum. AND you’ve created a “landing pad” for the next wave of deposits you’ll be creating with Step 3.

Step 3 – Remember, ANYONE Can Do This

In Step 3, you’re gonna part with some junk. Find your old record albums, cassettes, video games, VHS movies, books, and get ready to sell them. You can use Ebay or Craigslist or try taking your books to a local used book store and see what you can get. Look for other items that may have some value – old coin collections, jewelry, tools, Boy Scout merit badges. Get these sold! (Come on, do you want a house or an apartment filled with junk?)

Don’t stop with just YOUR junk. Ask your relatives and friends if you can clean out their junk for them – if they know why you’re doing it, they’ll be happy to help you out and provide you with lots of cool stuff.

If you don’t know how to do Ebay, etc. yourself and don’t want to learn (Hey, did you miss that part about “anyone can do this”?) there are plenty of brick-and-mortar business who will sell your stuff on Ebay for you and take 30% of the profit – that’s better than nothing if you just can’t do it yourself for some reason.

Let Your House Seeds Grow

Your goal is a minimum of $500. Don’t stop until you get $500 in that new savings account. Once that $500 is in your savings account – DON’T TOUCH IT! That $500 is your house “seed” money. Plant it and it’ll grow into a home. Pull the seeds out of the ground before they grow, you got nothing but worthless dirt.

What did that take you – a day or two? A week? Did you enjoy doing it? Many people supplement their incomes nicely doing Ebay-like selling. Ebay.com has free tutorials that show you step by step how if you want to learn. This one skill could get you your house faster than you can imagine. Something to consider doing more of, but at least do it this one time – it’ll feel like progress! Do it!!!