President Obama announced last week that he is going to provide $75 Billion to help people to avoid foreclosures. He estimates that 9 million people could be helped by this plan.

Here are some of the details of the plan.

The $75 billion goes to banks and loan servicers payable as bonuses for each homeowner that is helped. The goal is to lower the house payments to about 31% of the homeowners gross monthly income. Over the past few years, many people are spending upwards of 50% of their gross incomes for house payments.

$200 billion more is going to Fannie Mae and Freddie Mac to add to the $200 billion they already got.

Fannie Mae and Freddie Mac already hold about 40% of the nations mortgages. The goal of this money is a guarantee from the US Government (they key here is U.S. that means us) to make money more readily available to homeowners and new buyers.

I don’t know where this money has gone or where it is going but absolutely nothing has happened in the recent months to make money more available to those that want or need to borrow. And that in my mind is the foundation of the problem.

Yes, people are upside down in their homes, meaning they owe more on them than they are worth right now. But, they have been upside down in their new cars for decades. They solved that problem by continuing to pay on them until they had paid down what they owed to a level below the value of the car. We need to encourage people to do the same on their homes.

Have you looked at the value of your house lately.

Most of the loss in the value of your house can be traced to two things.

1. Banks selling the homes they have taken back at really low prices. Yes, losses the banks are taking in what they sell those homes for are creating the new value of your home. Except the banks are being bailed out. We are not.
2. Most people that want to buy a house or refinance theirs can’t get the money.

The sooner we can stabilize the housing market and slow the losses of homes to a trickle, the sooner we can get back to a more normal housing market. One where money is available and the value of real estate goes up. This is a better scenario for everyone.

I have heard a lot of complaining on the radio, on the web and in casual conversation about bailing out people who made bad choices on their mortgages. If you know me at all, you know that I lean heavily towards the values of personal responsibility and consequences for your actions. I don’t like the idea of bailing people out who lied to get a loan or handled their money poorly after they got one.

I have seen the finances of thousands of people and I can tell you that there is a large group of people out there who don’t have a clue how to handle their money. They continue to spend money like a drunken sailor on a 3 day leave right after payday. (I use this analogy with all due respect to the protectors of our liberty in the military. I have on many occasions bought and shared drinks with our military men and women while out and about on a weekend. I remember this one time in Cabo…)

Sorry, I don’t mean to digress, back to the message.

As much as I don’t like the idea of the Us Government moving in to help people that have made bad choices, I do like the fact that there is going to be some help for people that get up and go to work every day. If you are not one of the working people, there is no help in this plan for you. And, I also like the fact that maybe, just maybe this will speed up the process of getting through this whole mess.

As I have said, this plan goes against my core values but based on the circumstances today, I am really Ok with it. I think we all have to accept some kind of plan for everyone’s sake.

If you are struggling with your house payments, I sincerely hope this plan helps you to work it out. I hope and encourage you to keep your house for years to come.

If you have made good choices with your money and the rapid changes in our economy have not affected you. I hope you will understand that whatever we can do to help people to keep their homes is better for all of us.

If everyone keeps their home and handles their money better going forward, there should be far fewer people that will need our help in the future. Our help means our money.

I hope this opinion makes sense to you. Truthfully, it took me some time to come to it myself. Let’s hope this new plan will stem the tide of foreclosures. Let’s hope this plan helps to shorten this downturn housing cycle. And, let’s hope it makes more money available to those who have made good choices.

If hope does not manifest into a solution, we have to put some serious pressure on the powers that come up with these plans.

Housing started this whole thing and housing will get us out. We have to focus on those of us that go to work every day. We are the ones who make the payments.

And, if your neighbor gets a little help from us that you don’t need. I think we would all be better off if we were thankful for both sides of that coin.

If you think that there is no money left to be made in real estate, step aside and let someone else make a big pile of money.  If you want to learn more about what kinds of opportunities are available in this market, you need to listen to this show.

We have Cathy Hartmann Gladwell and Corey Gladwell from Timberland Realty Group here today to talk about how to get in the real estate market while it is all on sale. 

If you think you are being shut out of this market, I encourage you to do a little research on how you can take advantage of what could be a once in a generation opportunity.

If you want to talk to Cathy or Corey directly, you can call them at 425-322-3896. 

 

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People that are thin think differently about food and exercise than people who are not.  Did you know that people with money think differently than people who don’t have money.  It makes sense.  What if you taught people who don’t have much money to think like the people that do?  In my years of working with people on their money issues, I have found that a change in thinking is the first step to creating wealth.

Bestselling Author Paul McCormick joins me in the studio today to talk about his latest book, Secrets of the Millionaire Inside.  Paul has a 7 step formula for becoming a millionaire that he shares with us on the show.  Paul is a great guest.  His life experience and passion for helping people learn the simple steps to becoming wealthy are important to the financial well being of everyone.  I hope you enjoy the show.

You can find out more information about Paul McCormick and his rapid rise to prominence in the financial community by going to his website at www.FormulaForMillionaires.com

 

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Last week I got an opportunity to talk with a group of college students at Edmonds Community College.  I love doing these talks and I have given them at many high schools and several colleges.   

In the high schools, I get to go in and share with young minds the new rules of money that most of them don’t get at home.  Whether you like it or not, our society runs on money and this is a critical part of their education.  I get to contribute in a small way and I believe it has an impact. 

The colleges are even more fun.  The class last week was probably the most fun I have had yet.  The class was made up of people from all age groups.  The class ranged from kids straight out of high school to people on their 50’s coming back for more education.   

The older students have already experienced the “real world”.  They want to know the rules that will help them navigate money, jobs and debt better in order to have an easier life. 

No matter what the age of the class participants, the questions are similar.   I have a basic talk that I start with and we move in the direction of the most need and interest for the particular class.   

The first part is about money.  We talk about income and debt and getting ahead.  I want to open their minds to the fact that their income is only limited by their ambition.  I try to show them that no matter what your passion is, you can make an exceptional living doing it.  If you are willing to think outside of the box and apply yourself, there is no limit to your income.   

I illustrate this by talking about minimum wage jobs.  Then I contrast it with the attributes of people who make large amounts of money.  Here is what I want them to focus on. 

What types of people make minimum wage?Usually the common answer is unskilled people.  No matter whether you are getting your first job or you are straight out of college, you are unskilled to whoever hires you.  You need learn what they do, the way they do it and where that organization places the most importance.  They may stress volume, they may stress accuracy, or they may stress just following the rules and getting through the day.  Whatever it is, they will take what you have and teach you the rest. 

What is their attitude about their work?Do they do the best they can or do they just put in their time and leave?   

There are jobs for people who just put in their time, but those people never rise to the ranks of the highest paid.  Do your best and after you have done your best, crank it up a notch and do it even better the next time. 

What do they do in their off time?Are they working on getting better at what they do.  Do they take the time to learn more about that job or preparing for their next step?  One of the standard media interview lines of professional athletes (who co-indecently are some of the highest paid people in the world) is that they are just trying to get better at what they do.  These people are the best of the best at what they do.  If you were the best of the best in whatever you are passionate about, I guarantee you that you won’t be making minimum wage. 

What kind of people do they hang out with?  This may be the most important question of all.  Do your friends push you to be better?  Or do they hold you back so they don’t have to push themselves.   

Most of us have an easier time seeing the potential on others than we do seeing our own potential.  Do you love your friends enough to push them?  Do they love you enough to push you?  I’m sure the answer to both of those questions is yes.  My message for the class at Edmonds Community College and for you today is to surround yourself with people that will push you to be more than you are today.  Hang out with people who you can help and that will help you to move beyond what you think is possible and make that your new normal.   

The wealthiest people in the world are not the smartest among us.  They are the ones that get the things done that others didn’t think were possible. 

Do you know how you could change the model of your marriage and make it easier and more fun?  Did you know that there are a few simple things you could do to make The Money Thing in your relationship easier?

Our guest today is Dr. John Curtis.  John is the author of a couple of books on relationships and his latest, Marriage, Built to Last is a winner.  My wife and I already practice some of the things he talks about in the book and we are going to put some more of his ideas into place.  We have been going strong for 20 years and with some of these valuable tips, I see another 20 or more. 

This is a lively discussion and one that I believe anyone in a relationship or who wants to be in one should listen to.  Be sure and catch the Turtle Time segment too.  It pertains very well to John’s valuable message.

For more information on John’s work, visit www.marriagebuilttolast.org.

 

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Short sales and loan modifications are the topics of todays discussion.  We have brought in two of the areas best qualified people to discuss the brand new options people have today in dealing with distressed properties.  If you or someone you know are behind on your house payments or feel like you may get behind, your should listen to this show.

Our guests today are Jim St. John and Nolan Vance.  Their group is called Equity Magic and they specialize in helping both sellers who are in trouble and buyers who are looking to buy a property at a reduced price.  Their website is www.equitymagic.net.

In today’s real estate market, you should do what you can to keep your house any way that you can and if you don’t already own one, you should.  Don’t let the negative press about the economy keep you from taking advantage of the new options that are available. 

You can contact Jim St. John at 425-327-4866 or jimstjohn@equitymagic.net.

Nolan Vance can be reached at 425-518-6360 or nolanvance@equitymagic.net

 

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