We’ve Decided to RAISE our Borrowers’ Interest Rates

Posted by Glenn Leach on March 30th, 2009 filed in Understand Your Credit
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“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 on March 28th, 2009 filed in Mortgages and Real Estate
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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 on January 30th, 2009 filed in Build Your Wealth
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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.

The Long-Term Bucket

Posted by Glenn Leach on January 28th, 2009 filed in Build Your Wealth
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“How do I fill up my Long-Term Bucket when I can’t even afford to pay my current bills? Shouldn’t I just wait awhile until I’m in better shape?”

I know that’s what you’re thinking. And it makes so much sense to wait, right? Logically, you should start paying off your bills and start building up your checking and savings accounts. And then when you have a bunch of money saved up, you can start investing in the stock market. Right?

Wrong, Wrong, Wrong…

In order to reach your retirement years in good enough financial shape to actually retire, you’ve got to start building your Long-Term Debt Paying Funds right now! You cannot wait until you are too old to work to start building up this account, and you will simply never start building this account if you wait until you have surplus funds in your Short-Term Bucket.

Short-Term funds are too easy to spend, too easy to access, too easy to for you to just buy something you need vs. trying to figure out a less-costly alternative (the reason you got into so much credit card debt in the first place was because it was too easy to access spending funds by whipping out a piece of plastic, and your Short-Term Bucket will empty just as easily as you go along).

Get Rich Quick?

Your Long-Term Bucket will also benefit from the advantage of “Time”. Having these investment vehicles open for longer periods of time will make them more valuable. If you don’t allow them the time they need to develop for you, then you will run into the frustration of chasing “Get Rich Quick” schemes – which almost always fail. Allow enough time, and you can get rick slowly, steadily, and safely.

We’ll look at some Long-Term Bucket vehicles in the next article – and once you read that article, you’ll begin to believe that this is actually something you can do. I know what your assumption is at this moment when I’m talking about “Long-Term Investment Tools”.

You assume that I’m immediately talking about “Go out and buy 100 shares of Microsoft and hold it for the long term…” But you would be seriously wrong in that assumption.

I Get Where You’re At Right Now!

Again, the type of person who found this website are not the independently wealthy individuals among us looking to me for investment tips or the next hot commodity scheme. The people reading this website info are people struggling with day to day living, too much debt, not enough savings, and worries about the future. I know who you are.

And for me to tell you to go open a brokerage account and start learning about the Price/Value ratios of company stocks, or maybe teach you the tricks of “Puts and Calls” really has no place in your world. That is just NOT what I’m going to be talking about.

Read on. This will be accessible to you and can help you get to the point – someday – where those other “investor” things are important to you. For now, we just need to get you started on a path that will lead to a better tomorrow. That’s my goal – I hope you’ll come along with me and get started building that better tomorrow.

Your Short-Term Bucket

Posted by Glenn Leach on January 26th, 2009 filed in Get Out of Debt
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We’ve talked about dividing up your future financial needs into 3 Buckets: Short-Term, Mid-Range, and Long-Term. Your assignment was to write out a list of expected financial obligations that will occur in the future, and then group these obligations into these 3 Buckets.

The goal for this assignment is to attempt to actually prepare for the future instead of constantly reacting to the present. Wouldn’t it be cool if when that car of yours needs replacing or your daughter needs braces that you actually have money set aside that you can pay cash for it rather than trying to figure out which of your wallet-full of credit cards has enough room on it?

By the way, having this plan in place and getting your Buckets fully filled is called “Financial Security” – and it’s very, very nice when you get there. And you CAN get there, regardless of where you are in your financial life right now.

Let’s Get the Short-Term Bucket Filled, Shall We?

Okay, your short-term Bucket, by definition, consists of any significant expenses coming up in the next year. Things like:

• Replacing a vehicle
• Dental procedures
• House repairs
• Down payment on a house?
• Vacation
• Season Tickets to your favorite sports team
• 6 months of salary (an absolute MUST!)

Put a dollar amount on these items – that’s your Short-Term Bucket list. I don’t care what you put on the list – it’s YOUR list – but we need a dollar amount to shoot for. Because that’s how we’ll know when the Bucket is full.

Maybe you currently have absolutely zero money in savings right now. That’s actually NOT unusual at all, so don’t beat yourself up. Well, okay, beat yourself up a little, but then get over it.

If you find you need some help getting started, check out some of these articles on this website: “Get $500 In The Bank Now!”, “How To Get $500 In The Bank – FAST!”, “Need Cash? Try an “Income Blitz””. These articles will link with other similar articles, and you can learn how to jumpstart your savings plan.

Getting Specific

Your savings vehicle for your Short-Term Bucket is going to consist of:

• Cash under the mattress (Hey, some people LIKE having cash around – and that’s okay. If you have it, it’s part of your Short-Term Bucket.)
• Savings & Checking Account
• Vacation Savings Account
• Money Market Account
• Short-Term Certificates of Deposit

These vehicles are readily available to you – easily accessible for those short-term needs – and NOT susceptible to market ups and downs. And this is where you get the money to pay for those Short-Term items on your list.

Time For Tough Love

You put a lot of “needs” on your short-term list, and the amount of money you have filling this Bucket isn’t going to cover all of them. Right? Like, maybe you “need” a new car, or you promised your kids a Wally World vacation this summer, and if you don’t renew your season tickets this year you’re going to lose your seats – forever!

Awww… Choices. Aren’t they fun? Are you going to keep spending money you don’t have? Or are you going to reach for “Financial Security”? That’s what you’re facing right now. If your Short-Term Bucket doesn’t supply your every Short-Term “Need”, you’ve got to cut down on what you think a “Need” is.

For example, you don’t NEED a NEW car – nobody does. What you NEED is transportation. You can find a cheap used car, you can ride mass transit, you can borrow Mom’s old Crown Victoria for awhile. The NEED is to be able to get back and forth – the DESIRE is to maintain some sort of “status” with the friends and co-workers. You simply may not be able to afford your DESIRES right now.

Fill the Short-Term Bucket, but do it without neglecting your other two Buckets. (See “How Do You Fill the 3 Buckets?”)