The Family Guide to Finances

Download our FREE Mortgage Guide.  You will find valuable information about the application process, your credit, interest rates, loan programs, and more!  Compliments of the Family Guide To Finances.

The Federal Debt Plan currently being discussed on Capitol Hill will most certainly have an impact on your financial future.  The question is, how much will you be affected?  Most of us will feel the pain in the form of higher interest rates.  Interest rates have been historically low for the last couple of years making it easier (and cheaper) for many Americans to purchase homes, autos, and other consumer goods. This benefited the overall economy by stimulating sales cycles and preventing stagnation.  Like most economic conditions however, this trend cannot last forever. We can also expect to see thousands of people loosing their jobs as Federal spending cuts draw back on special projects.

On the eve of the ratification of the Federal Debt Plan, citizens are once again on the edge of economic uncertainty.  There has perhaps never been a more important time to get your financial house in order in preparation of this impending uncertainty.  I have made my book “The 101 All-Time Best Quotes About Finding Financial Success” available for just $.99 on Amazon.com and Barnes & Noble.  This could be the best investment you’ve ever made.  The timeless lessons in this book will help you put your financial future back on track!

Our passion and mission at The Family Guide To Finances is to educate younger generations in order to empower them to take responsibility for their own financial management.  Our schools, and in many cases our parents, do not do an adequate  job of educating our youth about fiscal conservation, saving money, the importance of liquidity, leverage, credit management etc.  Unfortunately for our youth, the fundamental principals of financial literacy have taken a back seat to other (and perhaps less important) issues.  The result has been that we are a society up to our eyeballs in debt and illequipped to manage our own finances.

Obamacare imposes Sales Tax on Real Estate-Set to Begin 2013!

Will you ever sell your home or investment properties? Then beware of the impending Sales Tax on YOUR Property!

Did you know that if you sell your house after December 31st 2012 you will pay a 3.8% sales tax on it?

That’s $7,600 tax on a $200,000 home, $15,200 tax on a $400,000 home!

When did this happen? It’s in the health care bill ‘Obamacare’.  Just thought you should know.

SALES TAX TO GO INTO EFFECT 2013.  Why 2013?  Because that is after the Nov. 2012 election.  So, this is “change you can believe in”?

http://www.gop.gov/obamacare-flatlines-obamacare-taxes-home

This bill is set to screw the retiring generation who often downsize their

homes. Does this stuff make your November and 2012 vote more important?  Oh, you weren’t aware that this was in the OBAMACARE bill?..  Guess what, you aren’t alone. There are more than a few members of Congress that aren’t aware of it either …..   click on the link above to verify …….

2011 Global Nominee

The 101 All-Time Best Quotes About Finding Financial Success was recently nominated for The Global E-Book Awards in the category of  Finance/Investment/Wealth Non-Fiction.  Finalist for the Global E-Book Awards will be announced on July 20th 2011.  We will keep you posted here on the progress of the awards process or you can check the awards site Here.

If you value the Mortgage Interest Deduction (MID)…Take Action Now! Let Lawmakers know that  you do not agree with the proposed dissolution of the Mortgage Interest Deduction. This is one of the last significant tax deductions left for most Americans.  It only takes a couple of minutes to let your voice be heard!

Protect Housing Action Center

JUST RELEASED! The 101 All-Time Best Quotes About Finding Financial Success by Randall Filbert

Buy Here

Learn from the Experts! Change your mindset and attitude! You too can become financially secure! The experts in this book practice what they preach and have benefited from their own wisdom and now you can too!
The 101 All-Time Best Quotes About Finding Financial Success is the quintessential “must have” pocket guide to remind yourself that, you too, can find financial success. This Book is full of fiscal wisdom from the mouths of geniuses who have managed to succinctly capture complex financial theories and ideas and condense them into modest expressions that have withstood the tests of time.

We provide advice on Financial Planning, Budgeting, Money Management, Cash Flow Analysis, Building Credit, Credit Repair,Credit Scores, Debt Reduction, Saving for Retirement, Investing, TaxPlanning, College Funding, Teaching Kids About Money, and Estate Planning.

There might finally be some good news this year about the nation’s dismal housing market. Or, at least, the bad news could stop.

Either way, it will be welcome relief for current homeowners as well as for potential real-estate investors. Reasons to be optimistic have been sadly lacking since the housing bubble burst in 2006.

For sure, last week we learned the widely watched S&P/Case-Shiller home-price index fell 1% in December, its fifth straight decline. The index tracks 20 major markets.

But that figure belies real reasons to be optimistic, according to some experts. If they are right, it might make sense to jump into real estate. The trick is avoiding getting burned again, and it doesn’t necessarily mean owning a home.

First, let’s recap the economic signs a bottom is close.

Houses Are a Good Deal

Housing is the most affordable it has been in decades, according to analysts at Moody’s Analytics. They don’t just look at house prices. They also look at incomes.

Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years. Prices usually average close to two years’ pay, although that varies nationally.

At the peak, midway through the last decade, a home in Los Angeles cost the equivalent of 4.5 years’ pay. The average price has since fallen to just over two years’ income now. That’s well below its pre-bubble average of 2.6 years. This means average Los Angeles homes are cheaper in “real terms” than they were typically during the period 1989 through 2003.

The opposite is true around the Washington beltway, where it will take 26 months of pay to buy a home, versus the historical norm of 22 months.

In the end, it will be affordability that will drive people to buy homes.

“Pricing is down so much in some markets that when you analyze renting versus owning it makes much more sense to own,” says Michael Larson, a real estate analyst at Weiss Research in Jupiter, Fla.

It is definitely bullish. But what about timing?

“Housing prices will probably bottom in 2011,” says Scott Simon, a managing director at money-management firm Pimco in Newport Beach, Calif. He foresaw the housing crash, helping his firm dodge losses that plagued Wall Street.

Is this the end of the housing crisis?

Mr. Simon says prices might dip another 5%. Still, in the scheme of things, that’s small. Consider this: In some markets, home prices have fallen by half or more since 2006.

For instance, in once-hot Miami you can snap up an average house for under $166,000, according to recent data from the National Association of Realtors. That’s down from $371,000 in 2006. Another 5% drop would take it to $158,000.

Investors Stepping Up

Here’s another sign the market is nearing a bottom: Investors have started to buy up houses and condos, in some instances paying entirely in cash. That’s a far cry from the heady bubble days when borrowed money seemed the key to riches. The bubble-era speculators who got burned tended to buy at the peak and borrowed heavily to do so. When the crash came, they quickly saw their wealth erased.

Take Miami again. Last year, more than half of all transactions were made entirely in cash, according to a recent report in The Wall Street Journal. That compares with 13% of deals in the last quarter of 2006, the height of the bubble. Similarly, in Phoenix 42% of sales in 2010 went to all-cash buyers, up threefold since 2008.

It’s a sign that these investors are betting on a rebound. Investors buying at current prices are looking for deals, or so-called bottom fishing. They typically like to pay entirely in cash (or with a relatively small loan) to speed up transactions. That can be vital for an investor wishing to lock in a deal fast.

If this is a turn in the market, then it might make sense to go out and buy a home. But, warns Pimco’s Mr. Simon, “buy in areas you really know.”

Plan to Stay Put

Buy and hold. While the good news is that the worst of the housing crash might be over, the bad news is that the fast gains of the glory days of 2005 and 2006 won’t be back any time soon. So to cover the costs of buying and selling, and what could be a prolonged recovery, plan to own for more than 10 years, explains Jack Ablin, chief investment officer at Chicago-based Harris Bank.

Also remember that borrowing money to buy a house can still be risky. If you pay for a $100,000 property with $20,000 cash and borrow the rest, a dip in the value of $20,000 would leave you with zero equity. On top of that, you’d have to pay to maintain and repair the property, something not necessary when renting.

Home Buying Without a House

There are other ways to benefit from a real-estate rebound than directly buying a house. Such investment is include stocks, mutual funds or exchange-traded funds. Unlike homes, which typically cost tens of thousands of dollars, these financial investments can be made in smaller amounts and typically are easy to sell.

Weiss Research’s Mr. Larson says although new homes are oversupplied, home builders might benefit from a rebound as the situation rights itself.

Rather than pick individual stocks, he says, it probably makes sense for small investors to pick broader investments that hold many different stocks. In particular, he points to the SPDR S&P Homebuilders ETF (XHB), which tracks a basket of home-builder stocks.

Mr. Larson also highlights specialized mutual funds such as the Fidelity Select Construction & Housing fund (FSHOX), which tracks home builders as well as home-improvement retailers like Home Depot and Lowes that would also likely benefit from a housing recovery.

From the WSJ 2-27-2011 —Simon Constable

Savvy Investors understand the fundamental investing principle of “ Buy Low,Sell High”. This advice holds true no matter what the investment is. Here is a graph showing the cycle of investments. It shows the points of maximum risk and maximum opportunity when purchasing. Conventional Investing wisdom dictates that we buy low (point of maximum opportunity) and sell high (point of maximum risk).

Investment Market Cycles

The challenge investors face is to determine when the market has bottomed out. For most of us, hind site is the only purveyor of this wisdom. Odds are however, in your favor when the market cycle has reached a position along the Point of Maximum Financial Opportunity (the Low).  You are most likely to profit by purchasing investments at this point and selling them at or near the Point of Maximum Financial Risk (the high).

We provide advice on Financial Planning, Budgeting, Money Management, Cash Flow Analysis, Building Credit, Credit Repair, Credit Scores, Debt Reduction, Saving for Retirement, Investing, Tax Planning, College Funding, Teaching Kids About Money, and Estate Planning.

Estimate your 2010 tax refund. This application makes it easy to find out how much you’re going to get back from Uncle Sam this year or how much you’ll owe.

Powered by TurboTax Free IRS Efile

www.FamilyGuideToFinances.com