It’s finally here!

May 10, 2010 1 Comment


Here it is. I’ve attached a picture.  See it does exist.

Create weelth, get rich,debt free

It’s called Control Your Cash: Making Money Make Sense, and it’s a 326-page primer on how to avoid being poor.

It explains how to get your bank accounts and credit cards to work for you, not the other way around. Teaches you the right way to buy a car (with the salesman cursing your name as you drive away.) Shares the secrets of where and how to invest, and what all those symbols, charts and graphs mean. How to turn expenses into income, quit living paycheck-to-paycheck, realize whom the tax system is stacked against (it’s most of us) and use that to your advantage.

Read this book, and I swear it’ll pay for itself multiple times over. Heck, the tax chapter alone will do that. Because earning money is nice but building wealth is better

Here, I’ll even give you a free chapter:
That’s 10% of the book, right there.

Did I mention it’s available on Amazon? It’s also available on my companion site, ControlYourCash.com.
If you’ve got a Kindle, you could have downloaded it and started reading by now.

The book tour starts this summer. Consider this to be the series of intimate club shows before the stadium dates begin.

Filed Under: Control your Cash, Entrepreneur, Homeowner, Investor Tagged With: , , ,

Are you in control?

March 24, 2010 Leave a Comment

“They used to call me valued customer, now they are sending me hate mail.”

 

Becky Bloomwood Confessions of a Shopaholic

Every year, 1½ million Americans file for bankruptcy.

Imagine a widow with infant triplets who renews her health insurance policy the minute her old policy expires. She can’t get an internet connection, and she doesn’t want to risk being uninsured, so she gets up from the chair, only to trip over the power cord and fall headfirst onto a hardwood floor. She breaks 8 teeth and dislodges her lower vertebrae, requiring tens of thousands of dollars of dental work, surgery and rehab. She works as a model, so now she can’t draw a paycheck for the year. Two years ago, her husband died when he happened to be driving along a faultline as an 8.0 earthquake hit, so his life insurance didn’t pay out because it was an Act of God. The triplets’ grandparents all live in the Czech Republic, and the woman lives on a ranch in southern Oregon, miles from any neighbor who could help her get back on her feet. So she declares bankruptcy.

How many of last year’s bankruptcy claimants have similar stories, and how many bought too much junk on credit and never bothered to budget?

This might not sound kind, but most people in bad financial straits are there because they chose to be. Not in the sense that they said “I can’t wait to be broke,” but in that when they were buying cars with 8.9% financing and spending $100 a week on cigarettes, they didn’t think about where it would inevitably lead.

No one wants to die in a car accident, but if you drive through enough stop signs while talking on the phone, you can’t be surprised if it happens. (Of course you can’t be surprised, the part of your brain that senses surprise[1] is now on the asphalt next to your cerebrum and your hippocampus.)

Personal responsibility is neither quaint nor outmoded. When enough people fail to exercise it, it leads to macroeconomic calamity. Of all the financial disasters of the last few years – the subprime mortgage crisis, the monster budget deficit, the stock market losing half its value, centuries-old investment banks going out of business – every last one happened because people who could have taken responsibility for their money chose to do something else instead.

 

“People tell you life is short. Life is long. Especially if you make the wrong decisions.”

-Chris Rock

Come check out Control Your Cash for one reason: your relationship with money is almost certainly dysfunctional. You don’t know what you don’t know, probably because nobody ever taught you.

Join, read, comment, share ideas. You can stop letting money act on you – and actually take charge of it.

[1] The amygdala, if you care.

 

Filed Under: Control your Cash, Homeowner, Investor Tagged With: , , , , , ,

Stupid for profit

December 16, 2009 1 Comment

 

**UPDATE #2**

Is this a good idea?

**UPDATE #1**

Economist Brad DeLong did the math calculating that the author and his wife saved spent $90,000 in equity, unpaid rent and tax benefits.  A comment in this same post reveals that a $30,000 advance was paid for the book which I’m sure the author immediately sent to his mortgage company.

Boy meets girl.
Boy marries girl.
Boy and girl buy a house they can’t afford.
Boy writes a book about the evil mortgage company that made him buy a house he couldn’t afford.

I’m leaving out a few pesky details (two divorces, two bankruptcies, four kids, the inability to either control their spending or tell the truth), but so did he.  The author doesn’t let the truth stand in the way of a good story or an advance that will pay his delinquent mortgage payments.

Seriously, DON’T buy this book.  Rewarding the author’s stupidity is like giving your money to a failing auto company. (Well, you’re doing the latter whether you want to or not. With the former, at least you have a choice.)

Instead, let’s learn from this reprehensible person’s mistakes:

#1: He got married. Twice.
If you charge your wedding expenses, you’ll be in the hole from day one of your marriage. Even if you don’t, you can still screw yourself over financially.

Divorce, long–term health problems and job loss are the top 3 underlying reasons cited in bankruptcy cases.  The author feel in love with a woman who: 1) he wasn’t married to; and 2) didn’t work , which led to alimony & child support payments.  This didn’t leave much money for the second wife, who was unwilling to forgo a dream house, Starbucks habit and name-brand clothes.

#2: He didn’t talk about money with the second wife.
He knew his wife had declared bankruptcy during her previous marriage, because her ex-husband (allegedly) failed to file (or pay) taxes.  Did the author read the bankruptcy filing?  If he did, did he have absolutely no questions about it?  Here’s one he could have asked: why were so many consumer loans included in the bankruptcy if it was only to clear tax liens?

Forget about which table to sit your ex-felon uncle at or whether to serve fish or chicken; the conversation you and your betrothed need to have is the one about money.  Who has what, who owes whom and what goals you’re going to pursue.
If one partner is profligate and the other a spendthrift, that’s a far bigger discrepancy than any black/white or Christian/Jew marriage.  If your fiancé has current money problems, think with your brain instead of your heart and don’t marry him/her.  If the thought of such irresponsibility hasn’t turned you off, you can still date the person. Just don’t set a wedding date until the debts are paid off and the credit cleaned up.  If you’re a man, she’ll either get it together or find another sucker.  Either way, you’re now free to build a future with someone responsible.

Mistake #3: He didn’t pay attention to his fiancée’s spending and saving habits.
He either didn’t know or didn’t care that his wife was carrying debt that she either couldn’t pay or didn’t feel like paying.

I have a friend who peeks at the signed check at the end of a first dinner date. She swears she can tell everything about a man by how much he tips. Our relationship with money is often wrapped up in our self-worth, which can lead to overspending or stinginess.  People with money issues often lie, too: about how much they spend, what they owe on their credit cards and what they buy.

Mistake #4:  He treated his wife like a child.
Other than to request or demand things, she wasn’t involved in the financial decisions.  He made the money and paid the bills.  His wife isn’t even on the loan documents for the house, which might mean she’s not on the title either.  When money got tight, he didn’t tell her she had to stop spending. When he finally let her in on the stress he was feeling, she didn’t care – probably because he’d always taken care of things and she expected him to continue.

Do you want an equal partner?  Why would you think about marrying someone who isn’t willing and able to handle his or her own finances?  Your partner to be should be self-sufficient in every way, but especially financially.  A marriage should be between equals who create something greater than the sum of its parts.  If you’re a dependent partner, you’re setting yourself up for disaster. Not only do half of marriages end in divorce, the average woman’s net worth declines 27%* after one.

Mistake #5, the most annoying one of all: He presented himself as a victim.

The primary determinants of everything you are and everything you have are your daily actions. Until you claim responsibility for creating your own destiny, you’ll always feel victimized.  Own your life, and demand that the people you love own theirs.

*National Marriage Project, Rutgers University 2001

Filed Under: Homeowner, Investor Tagged With: , , , , ,

Finally, someone did the math

May 23, 2009 Leave a Comment

I’ve suspected this all along but didn’t have the information or the math skills to prove my theory.

Barclays Capital’s latest Securitized Products Weekly includes a six-page research article titled Re-default rates for modified loans that’s probably as dry a read as it sounds.  Thankfully, we have Ira Artman to give us the Reader’s Digest version:

Here’s the good part:

“The Administration’s “plan” – such as it is – will only reduce the default rate “to 70-75% from 80-85% pre-modification.”

“In other words, the average cost per averted default exceeds the average size of recently originated loans. How does this make any sense?

Wouldn’t the money and effort be better spent if it were devoted to income tax cuts, tax credits and more broad-based stimulative macro-policies? Isn’t this the sort of national discussion we should be conducting?”

Substantive discussions on issues of importance?  Critically thinking through issues instead of just throwing money at our problems?

Nah…it can’t be that easy can it?

Filed Under: Homeowner Tagged With: , , , ,

How to stay out of foreclosure

June 5, 2008 Leave a Comment

We’re suffering an epidemic of foreclosure, or so the media and certain members of Congress would like us to believe. The overwhelming majority of Americans AREN’T losing our properties; we’re making our payments.

But apparently this is a situation beyond everyone’s control. The economy made me lose my house. Rather than be accountable, why not blame the economy (or the President, or lenders) for your own ignorance, immaturity and bad money management? After all, when it’s not your fault there’s no reason to feel shame.

To those who “walked away” from their homes:

1) What did you do with the money you saved by not making a mortgage payment for 6 months to 1 year? You knew you’d need a new place to live when the inevitable happened, right?
2) Who’ll pay for the loss on your property? Do you care? Dutiful taxpayers end up bailing out our neighbors. This is the reward for being responsible.

If the taxpayers are forced to bail out the homeowners who walked away, they should at least face some consequences. Liks being denied government-backed financing for a few years.

How do you prevent foreclosure?

-Buy a house you can afford* . Put at least 20% down and stick to a conventional (in the generic sense) loan. (e.g. 30-year fixed, 15-year fixed, 5/1 ARM)
-If you’re honest enough to admit you don’t manage your money well, have your taxes and insurance payments impounded by the mortgage company.
-Eliminate consumer debt. Ideally, you did this before you bought the house. Okay, you can have a car payment as long as it’s no more than ½ your mortgage payment.

-Have a reserve savings account with at least 6 months of expenses in a safe, liquid investment. (CD, money market, etc)
-If you’re old or have a dangerous job, get disability insurance.
-Pay on time and in full. Duh.

If you’re already behind, do this NOW:

-Contact your lender and work out a payment plan.
-Sell everything that isn’t nailed down and put the money toward your past due balance.
-Cut everything out of your budget except food, mortgage & utilities. (Notice there’s no car in there. If you have a car payment and can’t pay your mortgage, one of them has to go. And it’s not the house.)
1) Get a second job. Again, the money goes to your past due balance.
2) Talk to a property manager about renting the property**
3) If you have credit card debt (which, of course, you do), ask the card issuer to cancel your account and work out a payment plan that begins once you’re current on your mortgage.

It’s almost universal – people who struggle to pay their obligations spend frivolously. Vacations, dinners out and fancy cars are common among people who are days away from losing their homes.

It’s time to take responsibility instead of looking to the taxpayers to save you from yourself.

*I’m assuming you worked with a REALTOR to buy a home for the best available price.

**If you’re in default/foreclosure and plan to rent your house, you must disclose the potential foreclosure to the tenant. Use a property manager and have the rent payments handled by an escrow company that will pay them directly to the lender.

Filed Under: Homeowner Tagged With: , ,
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