Readers of this blog will surely not be satisfied with $1M at retirement. They’ll likely want to have 10 times that amount, maybe more. That may be a difficult number for most people to confront but then again, most people haven’t done the math to see how much they need. If you aren’t sure about how to calculate how much you need, leave a comment and we can go through the numbers together.
Don’t be fooled by the book that says $1M is enough, it isn’t by a long shot.

So What if $1 Million Isn’t What It Used to Be?

SOMEWHERE along the line, having $1 million — like the ability to diagram sentences, do math in your head, and the dollar itself — became devalued.

Today, when magazines routinely compile lists of the world’s billionaires, and trillion-dollar federal budgets are commonplace, a mere $1 million seems quaint. Still, it is a nice round number to aim for as you plan for retirement, and is the focus of two new books.

Indeed, writing that you need at least a seven-figure nest egg (more…)

Throughout the history of this blog, I have posted about the tremendous shortfall that people have in their retirement funding. Around 90% of the baby boomers do not have enough saved for their retirement; most are woefully short. Can you imagine trying to live for 30 years with $25,000 in savings, no pension and a slim Social Security check that isn’t entirely safe? (Yes, the Social Security check is a promise from the government that can be lowered if the solvency of the system is in question). Oh, it’s even worse in many cases because although they may have $25,000 in savings, they are also carrying huge debt loads for their plasma TV’s, boats, cars, vacations, etc.
I like the direction BofA is taking with their research detailed in this article. More and more financial institutions will be looking to help people save more because doing so aligns with the bank’s interest of having more money to manage. The latte example is chump change; how about computing the savings of delaying buying that new car for 2 years? Or that sofa? Now you start to talk about real money.
Decisions, decisions
Just how do we spend money? How might technology alter banking? With Bank of America’s help, MIT is trying to find out
By Ross Kerber, Globe Staff | April 14, 2008

Which would you rather have: a $2 cup of coffee today, or $8.64 more in retirement savings 30 years from now?

It’s the sort of question Dan Ariely can ponder for hours. (more…)

The value of your 401(k) is dependent on the tax rates when you withdraw money from it. Some think this will place restrictions on politicians in the future who want to raise taxes as all those owners of 401(k)’s will see the value drop with higher tax rates. Others are sure tax rates will have to go up because of the serious shortfalls in Social Security and Medicare. What this means is dependent on the individual but if you have a large 401(k) balance and that’s your primary retirement ticket, then you’ll probably want your representative to advocate for low marginal tax rates so the value of your 401(k) is there for you when you need it.
http://www.nytimes.com/2006/11/09/business/09scene.html

The press is filled with bad economic news.  If you’re nervous, this article might help.  Or you can call your financial advisor.  Hopefully you’ve been wise enough to choose an advisor who has gone through several of these cycles so they can be helpful to you and not in panic themselves.
Resist the Urge to Panic

Umbrella Insurance

(New York Times article)

This type of insurance is often overlooked but shouldn’t be. My insurance agent put it this way. If you are in an accident and become involved in a lawsuit, the purpose of umbrella insurance is to have a big insurance company on your side fighting your case because it is their millions on the line (not yours).

This article on MSN Money illustrates a situation that we all should get used to reading about as there will be millions upon millions of boomers who will have some variation of this happen to them.  The article still doesn’t really talk about what it means to be too old with too little money.  They kind of talk around the problem but they don’t get real about what sacrifices and compromises this man must make in his life.  He will suffer first then suffer some more and then when he needs critical health care, he won’t be able to get it.  Can you spot the mistakes that he made?  Are you working to avoid them for yourself?

We sighted Boomer 411 a new baby boomer web portal in a previous posting. They really have a unique approach to aggragating relevent content for the baby boomers. Their goal that is posted on thier home page is, “…to help people access Trusted and Relevant content related to baby boomers quickly.”

There are 2 new major events surroundiung Boomer 411. First, they have launched the portal. Financial Ambition has been assisting Boomer 411 to tag stories that are relevant real estate and finance information for baby boomers. You can check out many of our tags under the real estate and financial portions of the portal.

Second, I was interviewed for Boomer 411. The interview is being released in 2 parts. This is the first part of the interview. More to come as they post it.

Why do we talk about earning in the top 5%, knowing how much you need to have for your loooooooooong unemployment (often called retirement) and saving as much as you can while you are young and using compound interest to your benefit?  Read the disturbing article below for some grounding for our position.

The Change No One Will Talk About

200 is the number of financial institutions that have gone out of business since the “credit crunch” of early August. Many, many more have gone out of business but they are too small to make this list. Losses at the major financial institutions are expected to top $100B. Although this seems like a lot of money, it’s a drop in the bucket compared to the US GDP of over $13 trillion in 2007. See Source.

The problem as I see it is the real cost in financial losses and suffering for American families who will lose their homes to foreclosure. No government program or loan alteration plan is going to save most of these people, they will have to suffer the consequences of the loans they took. Yes, I believe many were steered into loans they could not afford and who is responsible for this is a hotly debated topic. The reality is that the borrower is going to suffer the negative consequences in the vast majority of these situations. The plans I am hearing about will delay the inevitable for many and may save a few from losing their homes but the consequences will eventually come to most. They took on loans they did not understand and could not ultimately afford.

The lesson is that you need to understand what you are signing when dealing with financial institutions. Get yourself educated and find good, competent, trustworthy help. One axiom I have heard is that the more complicated the program is, the more dangerous it is to your financial health. This certainly turned out to be true for Option ARM’s.

Dear Readers,

I didn’t comment on this when it came out in August as I was on vacation when it was published and I just never circled back to it.  The author of this article is a journalist.  Remember this.  He’s writing to sell newspapers, not educate you.  His job is to entertain you.

There is an assumption here that those that already have a few million are working to keep up with their neighbors but this is not how I see it.  For example, if Celeste were to retire today with $5M capital at work, current accepted financial thinking is that she could safely withdraw 4% of her money to live on.  This is a $200,000 gross income annually to support her current lifestyle.  I am very sure that this is not enough.  So Celeste is probably not hustling to work to keep up with her neighbors, she and her husband need more capital at work to produce a higher income so she can sustain her standard of living through a long period of unemployment (commonly called retirement).  It isn’t politically correct to say that $5M isn’t enough but that doesn’t make me wrong.

http://www.nytimes.com/2007/08/05/technology/05rich.html

The fees you pay matter over the long run so you may want to take a look at what is happening with your 401(k).  If the fees are too high, send an email to your human resources department and make a complaint.  It may help if they hear from enough employees.

Better Savings Plans

 November 27, 2007

That ‘Top One Percent’

By Thomas Sowell
People who are in the top one percent in income receive far more than one percent of the attention in the media. Even aside from miscellaneous celebrity bimbos, the top one percent attract all sorts of hand-wringing and finger-pointing.

A recent column by Anna Quindlen in Newsweek (or is that Newsweak?) laments that “the share of the nation’s income going to the top 1 percent is at its highest level since 1928.”

Who are those top one percent? For those who would like to join them, the question is: How can you do that?

But that’s only good for one year, you may say. What if they don’t have another house to sell next year?

Well, they won’t be in the top one percent again next year, will they? But that’s not unusual.

Americans in the top one percent, like Americans in most income brackets, are not there permanently, despite being talked about and written about as if they are an enduring “class” — especially by those who have overdosed on the magic formula of “race, class and gender,” which has replaced thought in many intellectual circles.

At the highest income levels, people are especially likely to be transient at that level. Recent data from the Internal Revenue Service show that more than half the people who were in the top one percent in 1996 were no longer there in 2005.

Among the top one-hundredth of one percent, three-quarters of them were no longer there at the end of the decade.

These are not permanent classes but mostly people at current income levels reached by spikes in income that don’t last.

These income spikes can occur for all sorts of reasons. In addition to selling homes in inflated housing markets like San Francisco, people can get sudden increases in income from inheritances, or from a gamble that pays off, whether in the stock market, the real estate market, or Las Vegas.

Some people’s income in a particular year may be several times what it has ever been before or will ever be again.

Among corporate CEOs, those who cash in stock options that they have accumulated over the years get a big spike in income the year that they cash them in. This lets critics quote inflated incomes of the top-paid CEOs for that year. Some of these incomes are almost as large as those of big-time entertainers — who are never accused of “greed,” by the way.

Just as there may be spikes in income in a given year, so there are troughs in income, which can be just as misleading in the hands of those who are ready to grab a statistic and run with it.

Many people who are genuinely affluent, or even rich, can have business losses or an off year in their profession, so that their income in a given year may be very low, or even negative, without their being poor in any meaningful sense.

This may help explain such things as hundreds of thousands of people with incomes below $20,000 a year living in homes that cost $300,000 and up. Many low-income people also have swimming pools or other luxuries that they could not afford if their incomes were permanently at their current level.

There is no reason for people to give up such luxuries because of a bad year, when they have been making a lot more money in previous years and can expect to be making a lot more money in future years.

Most Americans in the top fifth, the bottom fifth, or any of the fifths in between, do not stay there for a whole decade, much less for life. And most certainly do not remain permanently in the top one percent or the top one-hundredth of one percent.

Most income statistics do not follow given individuals from year to year, the way Internal Revenue statistics do. But those other statistics can create the misleading illusion that they do by comparing income brackets from year to year, even though people are moving in and out of those brackets all the time.

That especially includes the top one percent, who have become the focus of so much angst and so much rhetoric.

In the real estate industry, there has been much talk and interest in the Baby Boomers that are now coming to retirement age. The Baby Boomers are approximately 78 million people that were born from 1946 to 1964. To put the Baby Boomers in perspective one only needs to look at the basic statistics that illustrate the immense size and power of this demographic. For instance, approximately 7,918 people in the US turned 60 each day in 2006.

The Bureau of the Census estimates that there will be twice as many persons age 65 or older in 2030 as there are today: 69 million (20 percent of the population) versus 34 million (13 percent of the population). Likewise, the Bureau’s population projection, from its middle series, shows 18 million persons age 85 or older in 2050 (4 1/2 percent of the U.S. population); now, there are less than 4 million persons in that age group (1 1/2 percent of the U.S. population).
- “Retirement Prospects of Baby Boomers - Statistical Data Included“. Family Economics and Nutrition Review. Wntr 1999. FindArticles.com. 26 Nov. 2007.

This is an introduction to an exciting new offer for Baby Boomers and those of us interested in the Baby Boomers. Boomer 411 is coming soon! It is a new search portal that is dedicated to the best thinking, reflections, discovery, solutions, innovation and pioneers in fields related to Baby Boomers. Financial Ambition is a trustee of the new search site (we are providing and tagging financial and real estate related content for Boomer 411). Currently, you can go the Boomer 411 blog and learn more. Enjoy the blog and much more to come as the search site will be live soon!

The first line of this is curious as anyone who is studying the finances of the baby boomers would not be surprised that the reverse mortgage market is hot.  The vast majority of boomers simply have not saved enough to pay for their retirement so they will be looking anywhere and everywhere for help to continue to pay for even their most basic needs.  Their home equity is one of those obvious places.  Also, lenders have seen a dramatic drop in their loan volume so they have every incentive to offer products to the baby boomers who need to use home equity.  This is no surprise at all if you know how to look at it. 

Reverse Mortgages: The Choices Expand By KELLY GREENE and VALERIE BAUERLEIN November 13, 2007; Page D1 It may sound hard to believe, but one part of the mortgage market is hot: reverse mortgages. And that’s giving older homeowners more options to tap the equity in their homes — but also opening the door to more confusion and mistakes. Only a year ago, homeowners interested in reverse mortgages had little to choose from beyond the plain-vanilla, government-backed products that have long dominated the market. Such mortgages essentially allow homeowners at least 62 years old to sell a large chunk of their home equity back to a bank or other lender in exchange for a lump sum, monthly payments or a line of credit. Now, nearly a dozen large banks and mortgage lenders have launched reverse-mortgage products with lower fees and larger payouts. One lender has reduced the minimum age requirement to 60; others are making loans on second homes and vacation rentals. “Jumbo” reverse mortgages — for houses valued at as much as $10 million — are becoming more common. With a reverse mortgage, instead of the borrower making payments to the lender, the lender makes a payment or payments to the borrower. The borrower keeps control of the house and doesn’t have to pay back the money as long as he or she lives there. When the homeowner dies or moves out, the loan is typically paid off by selling the house, and any money left over goes to the homeowner or the homeowner’s estate. The product is evolving from meeting basic needs to fulfilling the desires of a new generation of retirees, from funding a vacation getaway or a recreational vehicle to renting a Paris pied-a-terre. The new options, though, mean more potential for confusion among consumers — and a bigger chance that they could miss out on getting the best loan for their situation. And as home prices fall around the country, some homeowners stand to be disappointed. “We’re seeing people apply for a reverse mortgage and find out their home is worth 5% less than they thought,” says Jeff Taylor, vice president of Wells Fargo & Co.’s senior product group in Greensboro, N.C. With so many competing offers to choose from, homeowners could easily wind up paying more in fees and interest rates than they should. Fees are typically steep — more than 5% of the home’s value — and most borrowing limits are capped based on where the homeowner lives. Fees are paid upfront or financed, while interest rates affect how much of your equity the lender ultimately takes. Reverse mortgage lenders traditionally have charged variable interest rates; now, fixed rates are available, but they may cost you more, says Barbara Stucki, director of the National Council on Aging’s home-equity initiative. Because of all the choices, homeowners need to be “a lot more strategic” in how they shop for a reverse mortgage, Ms. Stucki says, factoring in how they want to take the payments and how much money they want to take upfront. The boom in reverse mortgages helped Ronald Prast, a 74-year-old Phoenix retiree. When he first applied two years ago, he was told by a loan officer that he wasn’t a good candidate; government rules would have allowed him to cash out only a small portion of the value of his half-million-dollar home. But last November, when Bank of America Corp. introduced a reverse mortgage that allows homeowners to borrow as much as 65% of a property’s value, up to $10 million, Mr. Prast and his wife, Carolann, quickly signed up. The couple’s house, for which they paid $105,000 in 1981, was appraised at $540,000, Mr. Prast says. They used an initial draw of $208,000 to pay off their outstanding mortgage, home-equity loan, one year’s property tax and the loan fees, freeing up an extra $21,000 a year formerly used to make mortgage payments for travel and indulgences like paying for a granddaughter’s semester in Australia. They also have a credit line worth $75,000 that they are setting aside for medical expenses. “We were comfortably well off, and we wanted to release some of the funds we had tied up in our home,” Mrs. Prast says. Taking out a reverse mortgage to travel or spoil grandchildren is a far cry from just a few years ago, when such products generally were considered loans of last resort for seniors to avoid foreclosure or simply cover living costs, such as prescription drugs or hospital bills. In the past, the reverse-mortgage market has been constrained by having one main buyer, Fannie Mae. But a half-dozen investment banks, including units of Lehman Brothers Holdings Inc. and Bank of America, have started buying reverse mortgages in the past few years, with plans eventually to package and sell them. On Thursday, Ginnie Mae, the federal agency charged with making real-estate investment more attractive to institutional investors, said it’s rolling out a standardized government bond issue backed by reverse mortgages — a key step in creating a secondary market that could help lower borrowers’ costs and increase the loans’ availability. The result: The reverse-mortgage business is booming. Though reverse mortgages represent less than 1% of the overall U.S. home-loan market, valued at about $10 trillion, the number of federally backed reverse mortgages surged 41% in the year ended Sept. 30, according to the Department of Housing and Urban Development. Bank of America plans to expand its Arizona test of reverse-mortgage products nationwide within six months, says Colin McCormick, the bank’s top reverse-mortgage executive. In April, BofA announced it was buying the reverse-mortgage business of Seattle Mortgage Co., the third-largest reverse-mortgage lender by number of loans. The new products — and new bells and whistles — mean that homeowners considering a reverse mortgage are facing more homework than ever before. There are two questions they should ask first: What index does the loan use? It could affect your cost. Financial Freedom, the Irvine, Calif., reverse-mortgage unit of IndyMac Bancorp Inc., launched a product last month that bases its interest rate on the one-month London interbank offered rate, or Libor, index. Reverse mortgages traditionally have used the CMT index, which is based on Treasury bonds. Using the Libor index should lower interest rates “over the long run” for reverse-mortgage users, says Michelle Minier, Financial Freedom’s chief executive. But the borrower may have to give up “a small measure of cash, from 2% to 5%,” to get the lower rate, she adds. Still, consumers should investigate products that use the CMT index. Different products tack on varying amounts of extra interest to whichever index they use. One product might add 0.65 percentage point; another might add 2.00. What are the fees? Fees typically run up to 7% on government-backed loans — in which the Federal Housing Administration insures lenders’ and borrowers’ risk — but are as low as 2% on proprietary loans. If you’re seeking a lump-sum payout for a reverse mortgage on a high-value home, some lenders are willing to eliminate or reduce the upfront costs. And if you borrow less, you can often lower your fees, too. But you may pay higher interest rates in exchange for lower fees, says David Certner, legislative-policy director at AARP, the Washington-based advocacy group. For a 62-year-old Atlanta couple with a $500,000 house, for example, Financial Freedom’s proprietary product would provide up to $148,289, with a 7.79% interest rate. The homeowners would pay fees worth 1.4% of their home value, or $7,000. The same couple could get only $140,596 through a FHA-backed Home-Equity Conversion Mortgage, or HECM, from Financial Freedom. In contrast, the interest charged is only 4.93%. But they would pay a higher fee — 5.2%, or $13,262 — based on the federal lending limit for their county, which is $252,890. If a couple uses the money as a line of credit, though, the balances earn different rates of interest depending on the loan. For instance, the credit line for Financial Freedom’s proprietary loan would increase by 5% a year, compared with 6% for its HECM product. But those rates, being variable, are subject to change. Write to Kelly Greene at kelly.greene@wsj.com1 and Valerie Bauerlein at valerie.bauerlein@wsj.com2

The bad financial news isn’t over on a national scale. On an individual basis, we advise clients to clean up their credit card debt. Credit card debt is a wealth killer as it saps real money from a borrower and it does so quietly when one only pays the minimum each month. At an interest rate of 18%, a credit card balance will double in 4 years.

U.S. Credit Card Debt Seen As Next Nightmare
2007-11-07 06:44am
Americans now owe nearly as much on their credit cards as the estimated $1 trillion subprime loan debt that has sapped the housing industry and put a squeeze on the U.S. economy.

Newsmax.com reported Wednesday now owe a record $915 billion on their credit cards alone. Worse, defaults and delinquencies in the credit card industry are beginning to mount.

Credit card companies wrote off 4.58 percent in payments between January and May, almost a third more than in the same period in 2006, according to Moody’s Investors Service.

As a result of that action lenders like Citigroup, Bank of America, American Express and others already in trouble from the subprime mortgage collapse are being further weakened.

The U.S. economy itself is in danger as well, since it depends on consumer credit spending. Seventy-two percent of the U.S. economy rides on consumption alone.

With oil and gas prices up and the U.S. dollar falling, some analysts see economic disaster looming on the horizon, Newsmax.com reported.

Thanks Manuel for a photo of this cow moving against the herd.

I just looked at the San Jose Mercury News’s real estate blog, Square Feet. It appears they, like many news outlets, are having an identity crisis with the current condition of the real estate economy. Below are 2 postings that were posted on the Square Feet blog, by the same writer. They were posted on consecutive days, the 18th and 19th of October 2007.

Take a look at this story they posted on October 18th entitled Bay Area Home Sales at a Two-Decade Low In September.

… And in Santa Clara County, again for all types of homes (new and resale, houses and condos), the rock-bottom month was Feb. 1991, when 997 homes sold. For sales of just resale houses, the lowest month was Feb. 95, with 684 houses changing hands. Let’s bear in mind, though, that there were a lot fewer homes to sell in the Bay Area back in the early 1990s, so it’s possible that last month’s numbers are in fact scraping near record-low territory.

They make it appear as if the Bay area real estate economy is tanking. Yet, before you make that assessment read the posting, Silicon Valley Luxury Market Soldiers On which was posted on the 19th of October.

A report out this week from Alain Pinel Realtors showed that 227 homes sold for $2.5 million or more in the third quarter in seven of the Bay Area counties, compared to 195 of those high-ticket homes that sold last year during the same period. That’s an increase of 16 percent. The counties in the survey were San Francisco, San Mateo, Santa Clara, Santa Cruz, Monterey, Alameda and Contra Costa.

Reading the October 18th article could cause arrhythmia, while reading the October 19th article may make you bullish beyond belief. So, how can these 2 articles be written just 2 days apart and paint such a different picture of our real estate economy? This answer is complicated. First, the media is often behind the real estate curve. Second, it is my opinion that the media is not a good place to get tips and tactics for you next real estate sale or purchase strategy.

So, my interpretation of the disjointed news above, is that our markets have been made more volatile by a lack of liquidity and the negative press this crisis has created. This means that we will see many ups and downs in the months to come. Don’t fret over the downs and jump for joy over the ups. There is much opportunity in change, if you are able to take advantage of the situation.

Get good representation from a successful Realtor in your area who can help asses your ability to act. Then look at the facts when deciding to make your next transaction. Rates are still low compared to historical averages. In general listed homes are having less buyer activity and are more willing to negotiate. This is a fantastic buyers market for those that are qualified buyers with good down payments. Get a qualified mortgage adviser that can help you navigate the complicated mortgage markets.

It is my interpretation that the robust high end real estate surge that the above October 19th article refers to, as smart action by top 1% income earners to enter a market where they get both a good rate and a great price. Having both these opportunities at once is rare and will not last for ever. These movers in the market are truly buying against the herd.

 
Thanks PBO31 for this photo of the Oakland Tribune at night.

It looks like the public still has real estate on their minds. A recent study done by Guidant Financial Group polled 1,000 self directed IRA holders and uncovered that 65% of them are considering real estate as a part of their retirement strategy. See more on this story at Business Journal.

Often in hot and cool markets I find that people tend to lose track of the fundamental reasons behind why real estate is a great investment. First, it gives you income through rents. Second, it appreciates in value over time. Third, it shelters income with tax benefits. Real estate is the only investment that gives you all three of these benefits.

Thus, it is not surprising that self directed investors look to real estate for their retirement returns. Just take a look at the Bay Area’s average residential real estate returns over the last 28 years. You can see that residential Bay Area real estate has a higher average appreciation return than the S&P 500. When you add in the cash flow and tax advantages of investment property it is obvious that this is a valuable investment instrument. What I do find surprising is that many of the real estate investors I meet have inadequate or weak strategies for acquiring, assessing and liquidating their investments in the Bay Area.

I often keep track of new tech innovations by reading Robert Scoble’s Scobleizer blog. Robert used to work for Microsoft’s channel 9 web site and he now works as the Vice President of Media Development at Podtech.net. He has written a fantastic book called Naked Conversations, which chronicles blogging as a transparent tool for companies to reach their customers. It is an interesting read for those of you that are interested in blogging.

In his current position Robert travels the world uncovering exciting new innovations. The video below is an interview Robert made with Arron Patzer who created a new financial web tool called mint.com that was unveiled at the TechCrunch 40 conference on September 17th in San Francisco. The video shows how this online application could rival Quicken. I always recommend that my clients keep track of their finances as a powerful way for them to keep tabs on their financial goals. This looks like a new low cost way to do it. The video makes it look interesting, but I have yet try it myself. Let me know if you have tried it and what you think!

By Curt Van Emon

The opportunity to move against the herd is in front of us right now.

Common sense tells us to buy when rates are low.  Sounds reasonable, right?  But let’s take that thought further and see where it leads.

If we accept that common sense tells us to buy when rates are low, then:
Common sense tells us to buy when there are the most competitors because common sense by definition means that most everyone will arrive at the same conclusion.
Common sense tells us that if we are to get the house we want, then we must outbid every competitor who is bidding on that house.

Remembering the principles of supply and demand, we know that this will drive the price higher.   This must sound familiar to those who have been in the Bay Area real estate market over the past few years and who have routinely witnessed 10 to 15 offers on homes for sale. 

Now that rates are higher relative to the last five years, common sense is that maybe buying right now is not such a great idea.  If common sense is telling you to not buy now because rates are higher, then:  
Common sense is telling you not to buy when there are fewer competitors and less pressure for a house price to be bid up
Common sense tells you to sit on the sidelines when it is a “buyer’s” market

It seems that common sense leads one into taking actions that have them compete with the most bidders and to sit on the sidelines when there are fewer bidders.

Might it be better to buy when rates are high and there are fewer competitors?  We always hear that it is more effective to not follow the herd and we see an excellent example of this in today’s higher interest rate market.

The borrower always has the option to refinance if rates drop. This gives buyers the opportunity to buy a house where there are fewer competitors and then to lower the costs later if rates decline.

Some buyers cannot afford or qualify for loans at the higher rate.  This is good news for those buyers who can afford and can qualify.  This is what it means to have fewer competitors.  Some will choose to not buy because of higher rates and others will be forced out of the opportunity by the market mechanisms at work.

Talk with your Realtor® to get specific grounding about what is happening with properties in the area where you’d like to buy.  Are the days on market increasing?  Are there multiple offers or are properties selling to one offer? 

Come talk with us at Opes. We’ll work with your situation with our proprietary Future Value Tool™ which creates a personalized financial forecast for each of our clients.   With the results, we can help you assess what you can responsibly afford that still enables you to fund your retirement, college expenses and lifestyle expenses. 

Perhaps going against common sense will enrich you in ways you never expected.       
If there was ever an opportunity to move against the herd, it is in front of us right now.

 
Thanks d_b_Solis for the Photo

This is a powerful essay mostly for providing us the opportunity to notice if we are in conversation with our spouse or not about such an important issue.  If you are not married, then get into conversation with someone such as a financial planner, your folks, a good friend, etc.  Design and action will come through engaging in conversations with others about your specific situation and concerns.

‘Can We Talk?’

The 10 most important questions you and your spouse should ask each other about retirement — and probably haven’t

By GLENN RUFFENACH
September 22, 2007; Page R1, Wall Street Journal

Presumably, most wives and husbands take time to discuss the big issues in their lives: whether to have children, which career paths to follow, and who gets to control the TV remote. Presumably, most wives and husbands take time to discuss the big issues in their lives: whether to have children, which career paths to follow, and who gets to control the TV remote.

So why aren’t spouses talking about retirement?

A study published earlier this year by Fidelity Investments in Boston underscored what many financial planners already know: Wives and husbands aren’t taking time to discuss and plan for later life. In Fidelity’s survey of 502 couples — in which spouses were questioned individually — 41% disagreed when asked whether at least one partner would work in retirement, and 35% differed when asked about each other’s expected retirement age. In all, only 38% said they worked together on financial planning for later life.

“It’s hard for couples to talk about this,” says Aaron Skloff, a chartered financial analyst who runs his own planning firm in Berkeley Heights, N.J. “People think about their needs in chronological order. They’ll say, ‘We want this vacation home now,’ or ‘We want this private school for our children now. Retirement? That’s something that’s going to happen in our 60s. We can put off planning for that because it’s so far away.’ ”We asked financial advisers and couples across the country to identify the most important questions that spouses should ask each other about retirement — ideally, at least five years before leaving the office. In many cases, their suggestions focused on lifestyles first, and finances second. Here are the most-suggested conversation starters, along with some advice and observations from those interviewed. (more…)