Debt Consolidation – What to Look For, What to Watch Out For

Posted by Glenn Leach filed in Get Out of Debt
Comment now »

With recent market dynamics, the average American has accrued more debt than savings, which is detrimental to long-term financial health. Many options are available that can assist you in achieving your financial goals to free yourself of heavy debt. Debt consolidation has become a growing trend for consumers to conveniently lump all of their monthly payments together into one solution. Many professional debt consolidation experts can help you through the convenience of the Internet.

Debt consolidation is a simple concept – pool all your outstanding debts into one manageable payment plan. This is a very tempting way to gain control of your debts. However, it could also land you into even more trouble down the road. If you do not change your spending habits, new debt will creep up.

Debt Consolidation – Only A Solution if You Change Your Spending Habits

While consolidating your debt online can be a solution, there are several factors that will decide if it really helps you. If you continue to spend above your means, then debt consolidation cannot save you from the deep hole of debt. Discipline and self-control, when it comes to spending, are the biggest factors to long-term financial freedom.

Whereas debt consolidation can be beneficial for your finances, it is more of a bandage for the problem and not an actual cure. Only prudence and good judgment on your part would be a true long-term cure.

Although consolidating your debts can and does help many consumers, you can also be faced with major risks and problems – especially ending right back into the debt hole that you are trying to escape. However, if are truly motivated and disciplined to step out of the red, then debt consolidation can be both your short and long-term solution. Below are several venues of debt consolidation that you could take:

• Home equity loan or line of credit: These types of loans are usually hyped up to get you out of debt quickly and easily through using the equity from your home. These are also called second mortgages, and they add to the full amount that you will owe on your home. Borrowing against your home can be a quick way to consolidate your debts – however, there is also a risk of losing your home if financial trouble hits again.

 

• Zero-percent credit card: Some people do not own a house, or they may not have available equity in their homes; in these situations, many believe that obtaining a zero or low percent credit card is the answer. While it could be an immediate answer, the problem is that this fix is usually just short term. That low introductory rate will not last for long, and in fact, after a few months, the rate will jump to the same high interest you were paying previously. Therefore, this is only a real option for those who have tremendous discipline to pay off their debts in a short period of time.

 

• Debt consolidation plans: If you have a serious debt problem, you most likely receive advertisements for institutional and online debt consolidation plans regularly. Convenience is probably the biggest attraction to these plans because it can turn a dozen monthly loan payments into one single payment a month, usually at a lower interest rate. The trade-off to the ease and convenience is that you have to cancel most or all of your current credit cards, you have to pay a monthly administration fee, and the loan is spread out for a longer period of time. Paying less per month only means paying your debt off slower. In the long run you will likely pay more in overall interest.

 

Managing your debt first takes the realization that you have a problem, and then discipline to pay it off without collecting new debts. There are many techniques and plans out there, and a reputable credit management company will help you with a consolidation plan and schedule. Stick with a plan, remain disciplined, and you will begin to feel the load gradually ease.

Credit Card Debt

Posted by Glenn Leach filed in Get Out of Debt
Comment now »

“You’ve been pre-approved!” You see these all the time. Credit card companies do anything to gain your business – why wouldn’t they? With their huge interest rates, that’s a lot of extra cash they can profit off you, if you carry a balance every month. And with it being so easy to simply put all your purchases on this convenient little piece of plastic, it’s no wonder so many people carry massive credit card debt. But you don’t have to be chained to your credit cards.

Credit Cards, and How They Work

There are certainly many advantages to having a credit card. It is a convenient way to make your purchases without having to carry cash or your checkbook with you. However, when you compare the tremendous negatives of credit cards, the drawbacks quickly outweigh the benefits.

The credit card companies earn their greatest profits from the exorbitant interest rates they charge consumers. When you receive your statement monthly, it outlines the details of all of your activity, including purchases made, any late or outstanding fees, interest payment, and the total amount owed.

The card holder has to pay a minimum amount of the total bill by the specified due date. If you pay the bare minimum, the remaining balance gets charged interest and is carried over to another month.

The danger of credit cards stems from the interest that consumers must pay on their purchases – if the debt is not immediately paid, then the initial interest accrued becomes part of the total amount owed, which is subject to additional interest. It is identical to the technique of compound interest, but this time it is working against your financial health.

Credit Cards and Your Credit Report

When you have credit cards, they will be listed on your credit report as a revolving account. The credit bureaus give a rating on how well you pay your monthly amount due. The ratings range from 1 – 9, with 1 being the very best payment history. They will be listed as “R” for revolving, followed by the rating, such as: R1, R3, R9, etc. Therefore, how you manage your credit card debt and payments is directly reflected on your credit report, which can impact not only your interest rates for mortgages and car loans, but even the type of jobs or leases you can obtain.

Choosing different credit cards for different solutions

Because of competition within the credit card business, providers have developed many incentives to gain market share, such as gift certificates, frequent flyer miles, and cash back. For many credit cards, the more you charge, the more rewards you will receive. Unfortunately, this is how people plunge deeper into credit card debt.

There are several different types of credit cards that fit various needs, depending upon your financial history and spending patterns. In general, cash rebate cards are the most valuable, as you do not have to accrue “points” to gain limited rewards; instead, you can use your 1% or 2% cash back to purchase whatever you would like – or put it into your savings account.

Below are some of the many types of credit cards:

• Low Interest Credit Cards – People with excellent credit qualify for credit cards with reduced interest rates.
• Instant Approval Credit Cards – There is no waiting period required for this type of credit card because it is approved instantly.
• Bad or No Credit Credit Cards – People with bad credit or no credit at all can obtain these types of cards, but the interest tends to be exorbitantly high.
• Rewards Credit Cards – This credit card lets you earn prizes, points, and other rewards when purchases are made.
• Cash Back Credit Cards – Earn rebates for cash back and cash incentives when you use the power of your purchases.
• Student Credit Cards – These cards are specifically designed for college students with little or no credit history.
• Business Credit Cards – These are an effective way to manage business expenses, whether for a small business or large corporation.
• Balance Transfer Credit Cards – This credit card consolidates credit card debt into one low payment.
• Hotel & Airline Credit Cards – Exotic vacations and future business trips earn flying miles and points.
• Prepaid Credit Cards – These offer the convenience and benefits of standard credit cards, but spending is limited to your own prepaid credit limit.

Credit Card Debt Management Tips

There are many trustworthy organizations that can advise you on how to get yourself out of credit card debt. The National Foundation for Credit Counseling would be the first place to search for a customized credit card debt solution. They have highly qualified counselors can create a customized financial plan to help you accomplish your own credit card debt solution.

The following tips are helpful as a credit card debt solution; however, if you do not have the motivation or discipline to reduce your credit card debt, then you may want to contact the NFCC or other debt management programs. Through a personalized credit card debt solution, you can become debt free. There are several easy strategies that you can implement into your daily life to begin reducing your debt:

• Try to “Kill” accounts. Focus the majority of your resources towards one account at a time until you kill it completely. (BUT DO NOT CLOSE THE ACCOUNT ONCE IT’S PAID OFF!!!)
• Paying off credit cards with the highest interest rate first is a good idea, but killing off smaller accounts first may allow you to free up extra cash flow – providing more money to pay down other debts.
• Pay slightly over the minimum due on all revolving accounts to minimize the chances that the card issuer will raise your interest rate.
• Transfer high interest rate credit cards to ones that have lower interest rates – but ONLY if you’re sure you’ll be able to continue making the minimum payments on time.
• Refinance your house and include the balances onto the lower-interest home-equity loan (Be careful with this, or you may lose your home if you can’t pay the loan!)
• Do NOT close any accounts – even those with zero balances. You will NEVER increase a credit score by closing an account. The exception is closing accounts that charge annual fees once you’ve gotten your credit score where you want it.
• Do NOT spend all your money each month on paying down debt. Even though you have debt, don’t neglect building up your savings accounts. The best way to reduce debt is to make sure you don’t have to continue using credit cards to pay monthly expenses, and only when you have a savings cushion is that possible.

After having taken these steps to get out of credit card debt, it is important to evaluate your budget and spending patterns to prevent future debt from accumulating. Having credit is useful, but if it is not handled carefully, you could find yourself having to seek a more drastic solution to your credit card debt.

Credit Repair Services

Posted by Glenn Leach filed in Understand Your Credit
Comment now »

Yes, you can repair your credit report yourself, though it does take time, research and paperwork. Many people choose not to spend their valuable time learning consumer laws and the process of formulating dispute letters, preferring to let a trusted expert take care of it. This is where a legitimate credit repair service can help you. These companies specialize in credit and consumer issues, and know the strategies and nuances in dealing with the credit bureaus.

Once you order your reports from the credit bureaus, you scan and note any items that you wish to dispute. These can either be inaccurate, misleading, untimely or completely erroneous items that contribute to a bad credit rating. Legally, you can dispute any item, as it is up to the credit agency to prove the transaction. In practice, this is bad advice and is rife with abuse. Accurate but bad credit can only be fixed with time and good financial practices that will eventually improve your score. Examples of items to dispute include loans you know you paid on time but are reported as being late, and transactions or creditor queries you did not authorize.

A credit repair service can then dispute these items on your behalf. Legitimate companies will have attorneys and legal professionals on staff who have extensive knowledge of credit laws and practise time-proven strategies to dispute your items.

Unfortunately, the credit repair industry is full of unscrupulous companies who often give you bad and even illegal advice. Beware of scams promising to legally fix any and all of your bad credit, guaranteed. If it seems to good to be true, it is.

A Checklist to Spot The Professional Credit Report Agencies From the Bad

• Do a search online to find reviews and feedback, and check with the Better Business Bureau where they are located.
• You have a three-day period in which to cancel the service, without penalty.
• No fee should be collected before work has been done.
• Review their business history and number of satisfied clients.
• They should know legal issues, current consumer laws, and apply these laws.
• You have a right to fix your credit yourself. The credit repair company must disclose this information.
• Having a privacy policy is pertinent, as well as confidentiality protection.

A Credit Repair Service Versus a Law Firm

Many companies provide credit repair services – however, they may not have the legal muscle, connections or expertise to adequately represent your interests. A law firm specializing in credit repair should have attorneys and paralegals with experience in dealing with bankruptcies, tax liens, collections, judgements, and other scenarios that contribute to bad credit.

Lexington Law

Lexington Law is one such firm with a dedicated team of attorneys and paralegals who specialize in credit repair. Founded in 1991, they have represented over 500,000 people and removed over 2 million items from their clients’ credit reports, 1.2 million of them in 2010 alone. You pay a low flat fee per month (starting at $59.95) for disputing an unlimited number of questionable items on your reports.

Payday Loans – Rip Off or Smart Financial Tool?

Posted by Glenn Leach filed in Get Out of Debt
Comment now »

Running short of cash with bills to pay? Should you consider a Payday loan to get you through a tight spot? If you’ve been reading any of the other financial advice articles on this website, you know that we make it a point to encourage you to make smart financial decisions.

Taking out a short term loan from a Payday lender with an effective annual percentage rate that makes most hand-held calculators produce an “error” message doesn’t sound like a smart financial decision. But is it really that cut-n-dry?

It is easy for someone who has money and is paying the bills on time to judge you and tell you that pay day loans are evil and immoral works, preying on the weak and helpless, because they are so expensive to pay off. But is it really that easy to dismiss this idea as a viable financial option for you? Let’s look at the realities of people living on the edge of financial ruin and see if this isn’t something that could be a positive idea in some cases.

The Negatives Are Obvious

The negatives of payday loans are obvious: They are flat out expensive. You can typically borrow up to a max of $700 and it usually has to be repaid within 7-14 days. Let’s calculate the math here:

• Your fee for this would typically run about $100 in “service charges” and interest
• You borrow $700
• You pay it back in 14 days

So, $700 borrowed with $100 interest for 2 weeks gives you an annual interest rate of around 500%. Kripes! That’s a lot of interest! Some places will let you borrow a little more than this and some places will let you take a little longer to repay it, but don’t kid yourself – that is a lot to pay for a little bit of money.

So why would anyone do it? Shouldn’t there be a law against it? It seems ridiculous to pay that much – at least until you get into a situation where you need to. And what kind of situation is that?

A Smart Financial Tool?

Here are a couple scenarios where getting a payday loan could end up saving you thousands:

• Without this money, your credit card payment will be late. If you are late on your credit card payment, the interest charged on your remaining balance will jump up to the “Default Rate” clause on your card agreement – meaning they’ll jack up your interest rate to a ridiculous level and likely increase your minimum payment calculation as well. You had a nice 9.9% interest rate and were paying $300 a month on your $10,000 balance. One missed payment and suddenly your rate is 24% and the minimum payment is now $800 a month or higher. Paying that $100 Pay Day loan fee to prevent this just saved your butt.
• One 30 day late on any credit card will likely trigger the “Universal Default” clause on many or all of your other credit card accounts. Multiply what happened above by ALL of your credit cards.
• One 30 day late will lower your credit score – which will likely trigger higher auto insurance premiums and prevent you from obtaining future credit at favorable terms.
• Late on a mortgage payment or car payment? If paying a $100 fee can prevent that – it is money well spent.

Are Your Finances On Terminal Life Support?

The problem with using payday loans occurs when you make it a month after month habit. Using these services should be a temporary, once in a great while, bandage. If your finances are on terminal life support, a payday loan isn’t going to help you.

But if getting through the next couple of weeks buys you enough time so a solution can be found (maybe getting a 2nd job will solve your situation, but it’ll take a couple weeks to get your first paycheck, for example), then by all means, save your credit rating! There are a lot of people out there who wish they could spend a mere $100 for a higher credit score or having their credit card rates set back to where they used to be.

Payday Loans – Rip Off? Certainly! Smart Financial Tool? Sometimes… but only when used wisely by people who have an exit strategy in place.

Free Credit Reports

Posted by Glenn Leach filed in Understand Your Credit
Comment now »

How to Order Your Credit Reports

The only authorized website where you can order your credit reports for free is at Annual Credit Report (www.annualcreditreport.com). This site is operated by the three major credit agencies and is the central hub where orders are placed. You can also order them by phone through each of the three credit bureaus.

The Major Credit Bureaus

These are the three main credit bureau agencies operating in the United States:

Founded in 1899, Equifax serves customers in the financial services sector, retail, healthcare, telecommunications, insurance and government industries. They have offices in 13 countries. They provide your financial information to potential creditors, and empower consumers to manage and protect their financial health through monitoring services.

• Toll-free: 1-800-685-1111
  

Experian serves more than 40,000 clients in 60 countries, with offices in 12 countries. They maintain credit information on about 300 million consumers and 15 million businesses. Through a variety of partner companies, Experian assists consumers with viewing and monitoring their credit reports, along with offering a variety of financial and debt-servicing services.

• Toll-free: 1-888-397-3742

TransUnion, with partnerships in 30 countries, provides businesses with an accurate and unbiased picture of their financial capabilities. From its founding in 1968, they have been at the forefront of technology, being the first to offer on-line data systems to speed up reporting times to lenders. They were also the first to offer a department dedicated to consumer fraud.

• Toll-free: 1-877-322-8228

Make sure you order straight from the credit bureaus, as they will format the reports to be consumer-friendly. Credit reports are formatted differently based on who asks for the information – for instance, your credit report ordered by your bank will have specific business jargon applicable only to the banking industry.

Credit Scoring is like a Teeter Totter

Posted by Glenn Leach filed in Understand Your Credit
Comments Off

Back in the days when it was okay and acceptable to have dangerous, limb-breaking, skull-cracking playground equipment on school playgrounds (You know, the kind of toys that were actually fun to play on?), I remember fondly the HUGE Teeter Totters we had next to the Kindergarten Portables at Fern Hill Elementary in Tacoma, WA.

Possibly my perspective is affected by my advancing years and the fact that the memory was placed in my brain using my elementary-school-size brain, but I swear that those 3 side-by-side teeter totters had to be 45-50 feet in length.  I mean, if the kid on the other side tried to yell a challenge or taunt at you, he was so far away that you’d see his lips move long before the sound ever reached you.  Yup, those were some big teeter totters.

Having one person on each side – gently teetering and tottering back and forth?  Nah!  (Well, sometimes the “girls” would do it that way.  But not us “BOYS!”)  It might start with one kid on each side, but the fun began when others started piling on. 

If a big kid had a little kid pinned to the sky, you’d see 2-3 other kids come to the rescue – rushing to add enough weight to the little kid’s side to send that big kid up to the sky himself.  And if they could do it fast enough, and they lifted their legs up so the end of the board smacked into the ground, they could sometimes make the big kid go flying off the end as the impact vibrated through the fulcrum and slammed full force into his unsuspecting bottom.  Oh the fun of that Oh No look in his eyes and the subsequent flat on his back splat! 

And then you’d move to the next stage where each side of the teeter totter was rushed by “teams” of boys.  Having 10-20 kids on each side (and again, maybe it’s possible the memory might have added a few kid’s bodies over the years) became a contest of wills and strategy.  Pretty soon, you’d have the manly boys standing towards the center of the teeter totter, trying to push each other off to reduce the weight of the opposing side in order to give their own side an advantage.

The winning strategy came down to two ideas:  1)  Increase the weight on your side while 2) Reducing the weight on the other side.  That’s how you won – make your side heavier AND make the other side lighter.  All at the same time.  Both strategies going at the same time.

And that’s how credit scoring works! 

Over the years, I’ve helped hundreds and hundred of folks improve their credit scores so they can qualify for a home loan or get a better interest rate.  There are many tips and tricks I share with them (Check out the many articles here for more ideas), but ALL the strategies are filtered through the Teeter Totter Test.

If the strategy helps reduce the weight on the “Bad Side” of the credit teeter totter, it is a good strategy.  If the strategy helps increase the weight on the “Good Side”, it is a good strategy.  But what is hardest to communicate to these clients is that they must absolutely work on BOTH sides of the teeter totter at the same time!  You cannot just reduce the weight on the bad side and hope the score will go up if you have no weight on the good side.  Teeter totters don’t work that way and neither does credit scoring.

You cannot just reduce the weight on the bad side and hope the score will go up

A potential client with lots of bad credit should start right away building good credit accounts.  Don’t wait until you have all the bad credit taken care of.  Open active good accounts gain momentum and points the longer they have been opened.  Waiting to open them until the bad stuff is gone will delay the credit score improvement.

And if you get enough good credit going – just like suddenly adding several kids to one side of a teeter totter – you can create enough momentum to “bump” some of the bad credit off the other side.  It may not actually go away, but it will be so outweighed by the good stuff that its impact will be diminished to the point it doesn’t really hurt all that bad anymore. 

I’ll Start Saving, Just As Soon As…

Posted by Glenn Leach filed in Build Your Wealth
Comments Off

Of course you’ve heard that you need 3-6 months of spending money tucked away in a savings account – just in case.  And “someday”, you’ll start working on that.  Just as soon as you start making more money, and you’ve paid off the car, and paid down those credit cards, and… um… start making more money (did you say that one already?).

The problem with the idea of “just as soon as…” is that it is a sure fire strategy for disaster.  It’s called “procrastination”.  It doesn’t work – never has, never will.   Nobody likes to save.  Savings involves “delayed gratification”, and who wants to wait and hope you can enjoy your money later when you are absolutely certain that if you spend it today on a designer pair of jeans or a leopard-print steering wheel cover that you’ll enjoy it? 

But look around – the economy is becoming scary.  Unemployment is increasing.  Once “Too Big to Fail” companies have failed.  Once proud financial institutions and huge corporations have stocks trading in the pennies and the government is printing money at an alarming rate, telling us the solution to the crisis is to spend more money.

But the real solution is “Saving”.  Reduce spending and SAVE!  Don’t Delay – Start Today!  Great minds in history have warned us against delaying the building of our savings accounts.  Minds like:

• Benjamin Franklin (“Have you somewhat to do tomorrow, do it today.”) or
• Mark Twain (“Never put off until tomorrow what you can do today.”) or maybe
• God Himself (“In the house of the wise are stores of choice food and oil… THAT MEANS SAVINGS… but a foolish man devours all he has… THAT MEANS NO SAVINGS – Proverbs 21:20)

If you think the government is going to “bail you out” if you run in to trouble in the future, think again.  Start taking care of your own future – don’t be that “foolish man” God warns about.

I Don’t Have Enough Money To Even Start Saving…

Absolute nonsense.  You got change in your pocket?  The ashtray of your car?  That coffee cup above the washing machine?  Then you have enough to start saving.  Go open a savings account – even if all you have is two plastic baggies filled with loose change.  That’s the first step – that “journey of a thousand miles begins with a single step” first step.

Then COMMIT to adding to that account on a regular basis.  And by “commit”, I mean “figuring out a way to trick yourself” into doing it.  Because if you leave it up to your own good intentions, you won’t do it.  Here are some ways to “trick yourself”:

·        Make it automatic:  Have your bank automatically transfer a fixed amount every payday from your checking account to your savings account.

·        Make it automatic II:  Request that your payroll department direct deposit a percentage of your paycheck each month into your savings account and the rest into checking.  Many companies have started offering this service to employees – go ask!

·        Make it automatic III:  Contribute to your 401K.  If you’re not already in your company’s plan – start!  Start with 3% of your income – you won’t even miss it!

·        Make it automatic IV:  Go in to your payroll department and reduce your exemptions by 1 on your W-4 withholdings form.  That means your company will start withholding slightly MORE money each month from you.  It’ll go to the IRS, which will increase your tax refund next year.  (I know, EVERY other financial advisor tells you “Don’t let the IRS have your money – they don’t pay you interest on it”.  But if you’re not saving anything now – can you think of a safer place to park your savings each month?  You CAN’T spend it, and you’ll get a lump sum back next year.  Just commit now to how you’ll use this lump sum to save for the future.)

·        Make it automatic V:  Save your change.  Many banks offer a “keep the change” program with your debit card purchases where they round up each purchase to the next dollar and put the rest into your savings account.  Cool!  And put a big jar next to where you empty your pockets when you come home, and put all your change into it – and once a month, add it to your savings.

And some other ideas:

• Make it inconvenient to access:  Just like you might have to put your alarm clock across the room so you actually have to get out of bed to turn it off, if it’s too easy to access your savings – you’ll just end up spending ‘em.  Maybe you need to set up your savings account at a different bank?  I LOVE these new on-line banks, like ING DIRECT.  They pay a great interest rate, they’re safe, and you have to go out of your way to access your money – which isn’t hard to do, it’s just slightly inconvenient so maybe you’ll think twice before you dip in to your account so you can buy those designer jeans.
• Give the account a “goal” name:  Use names like “Emergency Fund”, “Vacation Fund”, “Kid’s Education Fund”, “Christmas Fund”, “New Home Fund”, etc.  Taking money out of your “savings” account is easy.  Taking money out of your “Start My Own Business and Fire My Boss” account to pay for something frivolous might be enough deterrent to keep your spending in check.

Saving a few bucks every day may not seem like much when you first start out, but those few bucks grow as long as you can keep your fingers out of the cookie jar.  And when it begins to become a sizable amount – you’ll actually start sleeping better and feeling better about yourself.  And if you can resist the temptation to blow it on something you don’t need – you may be able to enjoy that thing you’ve heard of, called “Peace of Mind”.

We’ve Decided to RAISE our Borrowers’ Interest Rates

Posted by Glenn Leach filed in Understand Your Credit
Comment now »

“We appreciate your loan business very much, but because the economy has gotten difficult we’ve decided to TRIPLE your interest rate effective immediately. When your next statement comes, the payment and interest rate will be higher, but don’t panic – it’s just our way of staying profitable so we can continue to serve you…”

OKAY, BEFORE YOU CALL ME IN A PANIC – THIS IS NOT TRUE!!!

But are you one of the lucky credit card owners who have received such a notice recently from your credit card company? With so many banks in trouble because of their poor lending practices – many have decided that the best way to generate some extra revenue is to target their credit card borrowers – even their BEST credit card borrowers.

Forget the fact that you’ve been a good client for YEARS and never been late. Forget the fact that they promised you that low interest rate on that balance transfer “for life”. Forget that your credit score is 800 and you’ve never missed a payment in your life! They have decided that YOU are their solution to all the other stupid lending choices they’ve made.

So, you’ll get the letter that says “We’re changing your terms – tripling your interest rate (or more) and increasing your minimum payment calculation too!” If you don’t accept these changes, your account is immediately closed. Faced with this choice, many of you decided to pay the higher interest rate rather than closing your account – because closing your account would hurt your credit score. Ouch! Rock / Hard Place!

Is there hope in sight?

Maybe. If you follow the financial markets at all, you’ve no doubt noticed that many banking stocks have stabilized and are starting to recover. The news coming out lately suggests that the stimulus money pouring in to these financial institutions is having a positive affect on bank balance sheets. Money is starting to flow through credit markets again.

But if you did get hit with those increased credit card rates, please realize that your credit card company is NOT going to send you one of them letters saying, “Whew! Crisis is over! We’re lowering your rate again!” If you accepted the higher rate – they are happy to let you keep it.

Did you Opt-Out?

Over the past few years, fears of identity theft have prompted many of you to use www.OptOutPreScreen.com to eliminate those pre-approved credit card offers from filling your mailbox. IF you’ve done this, and IF you just got whammied by your credit card company, may I suggest that you remove your name from the Opt-Out list?

Credit card business is VERY profitable to banks – so it won’t be long, as the bank balance sheets improve, before they start mass-mailing low-interest balance transfer offers again. If your name is on the Opt-Out list, you won’t be getting these offers – essentially Opting Out of Better Options.

What do you do Now?

If you did put your name on the Opt Out list at some point, it is very easy to “opt out” of the opt out list again.  On the www.OptOutPreScreen.com website, it is simple to “Opt Out” or “Opt In”.  Enter your info, and couple mouse clicks, and you’re back on the marketing lists again.  Soon, your lonely mailbox will start filling with offers again. 

No one likes junk mail, but when good credit card offers start coming out again, you’ll be glad you took this simple step.

Does Your Home Have A Story To Tell?

Posted by Glenn Leach filed in Mortgages and Real Estate
Comment now »

I am often asked by my real estate partners to assist them in marketing their listings. They know I like to write and tell stories and that history is a passion of mine, so when they land a listing for maybe an older home in a community or a home being sold by a long time member of the community, they come to me for help in telling the story.

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!)

Two Long-Term Bucket Vehicles to Start With

Posted by Glenn Leach filed in Build Your Wealth
Comment now »

There are two types of vehicles that you should be able to use right away to fill your Long-Term Bucket.

1) An Automatic 401K, 403B, or IRA account.
2) Your Mortgage Payment.

First, the 401K or 403B account – if available to you – are the best way to get started with your Long-Term Bucket. Begin immediately putting 3% of your income into this account each payday. It’ll come out of your pay without you ever seeing it – or noticing it. See my article on “Easy as 3, 4, 5…” to learn how this is possible. You get to count this payroll deduction as your contribution to your Long-Term Bucket.

If you don’t have access to a 401K or 403B account through work, then setting up an IRA account on your own is the alternative – but it’s more painful because it has to be funded with after-payroll-tax dollars. You will get your paycheck and have to take some of the money and put it into this account, and those months where you’re wondering how to pay for groceries, you’ll be very tempted to skip this contribution, and the skip it the next month, and the next month…

On the flip side of things, I run in to many people – especially men – who max out their 401K contribution each month – 10% – 15% – and then they run up their credit card debt because they don’t leave themselves enough to live on. If you are NOT able to fund your Short-Term and Mid-Range Buckets each month with an equivalent amount to what you are putting into your 401K account, you need to cut back on this contribution and use the extra take home pay to pay bills and fill these other buckets.

Balance, Baby, Balance…

For number 2 above – Your Mortgage Payment. If you have bought a home – good for you. This is the number one wealth builder of all time. If you look at your mortgage statement, you’ll notice that most of your payment each month is going towards interest, and a small portion is actually going towards paying down the debt.

This “small portion” that is paying down the debt is actually a Long-Term Bucket contribution, and you get to count it as that. So there you have it. Two absolutely painless ways for you to begin filling up that Long-Term Bucket, even when you’re just starting out.

But stay in balance. Don’t go overboard on the 401K if you can’t pay your other bills. And don’t pay “extra” towards your mortgage if you’re not filling the Short-Term and Mid-Range Buckets yet.

Ahh… but once you start getting an equal amount going in to the Short and Mid, paying extra towards the mortgage or increasing the 401K amount is a quick and easy way to increase the Long-Term filling. And eventually, you’ll be using that brokerage idea and buying stocks – but more than likely, you’re a ways away from that. And that is fine.

Stay in balance. Stay even and steady. And use increases in “extra money” wisely. And you’ll be fine – regardless of where you are right now.