Archives For February 2010

I started a group on facebook for AllFinancialMatters. You can check it out (and JOIN) here: Fan Page

I just set it up tonight so it’s still a work in progress.

I’m hoping to get 6 million fans by the end of March. Too aggressive?

It’s always nice to get emails like this:

Hello JLP,

I wrote to you well over a year ago (almost two years ago!) asking for advise. I wanted to know if I should pay off the house or sock away for retirement, as I was starting late in life. Dave Ramsey rocked my world and because of the advise I received from your readers I paid off the house in mid January 2010. I am happy to report that I feel very secure because of this. Thank you so much.


Carpe diem

Here is the post she is referring to: What Do You Think of This Reader’s Plan?

It’s nice to know that this blog and its readers helped someone.

The foreclosure monster isn’t going away. We are two years into our rescue plans and people are still facing foreclosure. How many?

Foreclosures may reach as many as 7 million mortgages, and an additional 5 million are at risk of default because borrowers owe more than the property is worth, Laurie Goodman, senior managing director at Amherst Securities Group LP in New York, said in a Feb. 17 interview.

“This is a problem of mammoth proportions,” Goodman said. “You can’t throw 12 million people out of their homes, so you need a successful modification program. My fear is that this isn’t it, but I’m highly confident that the administration will continue to iterate until they succeed.”

You can’t throw 12 million people out of their homes? Why not?

Now the Obama administration is looking at banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program (this is the article from which the above quote was taken). This doesn’t seem like a good idea to me. How long would it take for a homeowner to get screened for such a program? In the meantime, what happens to the loan? What happens to the missed payments?

I would like to see the statistics on how many people, who got help avoiding foreclosure, still ended up in foreclosure. Give us the hard numbers. That’s the only way we can see if these programs are working or not. I’m pretty sure we wouldn’t like what we found out.

I’m curious. Have you been through the foreclosure process? How did it work? Have you been through the government’s programs to help you stay out of foreclosure? How did that work out? Please leave a comment. I’d like to hear your thoughts?

I made a few changes to the look of AFM.

For one, I added a lovely picture of my wife and me, taken on my brother’s birthday last November. Every year my forehead gets bigger and bigger…lol.

Second, I changed up the books section on the right sidebar. I’ll be using this section to alert you of different books I am reading or perusing. Yes, those are affiliate links.

That’s it for now. I’ll be looking for more ways to kind of spruce up the site. Let me know if you have any suggestions on things you’d like to see.

Oh, and if you’re reading via a feed, PLEASE stop by and visit the REAL blog every so often. I understand the importance of RSS feeds, but I hate them.

Thanks for reading.

NOTE: Thanks to reader, JT, for pointing this article out. Very cool topic.

First off, I found this quote from this article hard to believe:

The average American household snaps up about $500 annually in lottery tickets, whose appeal is especially strong among those with lower incomes. Some estimates suggest that more than 80 percent of lottery revenue comes from households making less than $50,000 a year — the very people who have the hardest time saving. In fact, 38 percent of people earning less than $25,000 a year think the lottery is the most practical way they’ll accumulate a few hundred thousand dollars in their lifetimes, according to the Consumer Federation of America.

The average American household spends $500 per year buying lottery tickets! That works out to $41.67 per month. That may not sound like much to some but it sounds like a lot to me—especially when you look at the opportunity cost of $41.67.

Check this out. Using my Excel spreadsheets with S&P 500 Index total returns, I ran a few calculations. Here is how much a person could potentially have if they directed their lottery spending to their retirement plan:

The Cost of Playing the Lottery

Of course this is no different from any other spending we may do on frivolous things. However, the lottery to me is bad because of the odds of winning. A person who plays the lottery is almost destined to lose.

Anyway, believe it or not, that’s not the point of this post. What I wanted to point out was how some credit unions came together and formed a “savings lottery” in order to encourage people to save money. According to the artice, for every $25 a person deposits into their account, they receive one entry into a drawing for $100,000 held a year later. The article also mentions other prizes were given away on a monthly basis.

Personally, I like this idea. It’s promoting a good idea: thrift. We need more thrift in this country.

What do you think? Do you like this idea?

Check out this quote I just read in a Christian Science Monitor article about boomers and retirement:

“Nearly a quarter of those who turn 50 this year say they haven’t even started saving, according to a poll in January.”

I would be curious to know what percentage of that percentage have…

• a new (non economical) car?

• a boat?

• an expensive home (“expensive” meaning higher priced for their particular area of the country)?

• a budget?

• are turning down a company match?

• COULD save money but REFUSE to?

I know, I know,…I’m being judgmental. I don’t mean to be. I just find it hard to believe that that many people haven’t put anything away for retirement.

I suppose a positive way to look at this is that lots of those people are going to be working a long time, which will help stave off the employee crunch we were supposedly going to face when Boomers began retiring in droves and there weren’t enough in the younger generations to take their place.

For those of you just starting out in life, PLEASE HEED MY ADVICE:

Start saving for retirement NOW! Make it a PRIORITY! Before you know it, you’ll be 50-years old. You don’t want to waste all those years of potential compounding of your retirement funds.

I get a weekly email from Harvey Mackay. In light of yesterday’s post with job interview advice from Mackay, I thought I’d share today’s email with you, which is also on the topic of job seeking:

Use your head to open doors

In the State of the Union address, President Obama declared our national economic agenda “begins with jobs.” So does mine. I’m dedicating myself to a 30-day, nationwide tour to launch my newest book Use Your Head to Get Your Foot in the Door: Job Search Secrets No One Else Will Tell You*.

Use Your Head* is loaded with silver bullets. I even enlisted the help of readers of this column. They delivered great tips ranging from networking-your-way-to-work to tapping multi-skills for a totally new career.

People have asked me, “Harvey, what is the most bankable advice Use Your Head has to offer?” A tough call, but here are the 10 tips with the greatest traction after road-testing the advice in this book with hundreds of job seekers:

1. Getting a job is a job. You have to get a routine and stick to it. And it’s a 16 hour-a-day proposition. Get back in shape. Read. Network. Volunteer.

2. Rehearse job interviews in the privacy of your own home using your video recorder. Invite members of your personal ‘kitchen cabinet’ to pose tough questions and to critique your performance.

3. Never lie on your résumé, but always remember a résumé’s purpose is to get you an interview. Use industry accepted terms to describe what you do. If you try to make yourself seem too special, firms won’t know what to make of you.

4. After every interview, use the Mackay 22 to debrief yourself (We forget 50 percent of what we hear in four hours!) on what you learned and make notes including how your résumé played and how you could fine-tune it. Use the Mackay 44 to prepare for your interview. Both forms are available by clicking and signing up for free job secrets tools through

5. On résumés and in interviews, point to specifics in your achievements… the more measurable, the better. If you’re a manager, showcase the people you’ve developed in your career and where they are today.

6. Learn how to use the Invisible Web to know more than you ever thought you could (or should) about your interviewer and the company you are interviewing with.

7. The Internet is forever… and it’s everywhere. Countless people have torpedoed their chances by uploading career-suicide videos and party antics onto social networking sites like Facebook. Used properly, social networking vehicles like LinkedIn, Facebook and Twitter, can help you enhance your network. And networking is how two-thirds of all jobs are found.

8. Respect your references. Recruiters check out these resources more thoroughly than ever before. Make sure your praise singers know in advance that you’re listing them and how appreciative you are of their help. Firms will also contact people who aren’t your fans.

9. The early bird may get the worm, but late birds get the job. You never want to be a warm-up act. Like the Academy Awards, the strongest contenders are those appearing at year-end.

10. Never negotiate your starting salary based on what you need. Base your argument on the marketplace and what you have to offer. Always have hard research handy to prove you know your numbers. But, if all else fails, offer to work for free for a trial period until you prove yourself.

Use Your Head also features thumbnail capsules of the 13 hottest job search books ever written. These are serious times, and job hunters need all the best advice they can get. After all, 17 percent of the workforce is on the street, counting those who have stopped looking.

People are learning that today’s outing on the job market is no one-time stand. It’s just another step in a lifetime job search. Committed? I’m so sold on the advice in Use Your Head, it comes with a money-back guarantee to refund the purchase price if you don’t land a job in six months.

But don’t just take my word for it. Last month, I was humbled by the prestigious Library Journal’s endorsement of the book: “… Highly recommended for job seekers and career changers at all experience levels.”

Once again, some solid advice from Harvey Mackay. If you’re not familiar with his books, you might want to check him out.