Monday, May 07, 2012

Missed Fortune 101

Missed Fortune 101 is full of strategies that if people would have followed them they would have been able to save a massive of amount of money.

The John Paul Getty quote comes to mind:
If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.
Think about that for a minute. Opportunity passed by, knocked on peoples door, and few answered, still fewer listened.

What can we learn from this?

Thursday, January 24, 2008

Deal Reached on Economic Stimulus Package
Most Workers Would Receive at Least $300 Tax Rebate

House leaders and the administration reached agreement today on a roughly $145 billion economic stimulus package that would quickly send payments to poor and middle-class workers while offering businesses one-time incentives to invest in new equipment and write off tax losses.

In formally announcing the deal this afternoon, House Speaker Nancy Pelosi (D-Calif.), House Minority Leader John A. Boehner (R-Ohio) and Treasury Secretary Henry M. Paulson Jr. hailed it as a bipartisan effort that would help stimulate the economy by spurring consumer demand and creating new jobs.

Under the stimulus plan, as many as 117 million people would get rebate checks. Individual income tax filers would receive up to $600, working couples would get up to $1,200, and those with children would get an additional $300 per child.

"First and foremost, the stimulus package will put money in the hands of hardworking Americans," Pelosi told a Capitol Hill news conference. "This is a middle-class initiative to strengthen the middle class and to those who aspire to be in the middle class. It will be in the form of tax rebates and a child tax credit."

She added: "We also have included immediate relief for homeowners who are at the risk of losing their homes because of the subprime [mortgage] crisis."

"This agreement is a big win for the American people," Boehner said.

Paulson said later that "if all works well," he expects the rebates to begin flowing in May. He said the aim is to start sending the checks within 60 days of enactment of the stimulus package, with most recipients receiving their checks in less than 10 weeks.

President Bush welcomed the deal, telling a news conference that it demonstrates "the kind of cooperation that some believed was not possible in Washington." He said he was pleased the package meets guidelines he set out last week.

"This package has the right set of policies and is the right size," he said. "The incentives in this package will lead to higher consumer spending and increased business investment this year."

Bush said he was "pleased that this agreement does not include any tax increases, as well as unnecessary spending projects that would have little immediate impact on our economy." He urged the House and Senate to "take the swift, decisive action our economy urgently needs" and pass the stimulus package quickly.

In the compromise deal -- reached during an arduous, late-night negotiation -- Democrats acceded to Republican demands by jettisoning plans to extend unemployment benefits and food stamps for now, but they concluded that they could revisit the issue if the economy continues to slide.

Republicans agreed to offer rebates as large as $1,000, even to working families that earn too little to pay income tax, an idea they had roundly rejected in past stimulus plans.

When all the numbers are tallied, this will be the most progressive economic package we have seen in years," said a senior House Democrat.

Boehner authored provisions that would allow faster tax write-offs for corporate investment and immediate tax deductions for small-business investments in plants and equipment. Businesses also would be able to take tax deductions this year on operating losses from as long as five years ago.

In the news conference with Pelosi, Boehner said lawmakers from both parties "had an endless list of items that they wanted to include" in the stimulus package but that he and Pelosi opted to keep it fairly narrow. "And the beauty of this package is that it is simple, it is clean, it is neat, and it will get the money back out into the American economy as quickly as possible," he said.

However, Senate Majority Leader Harry M. Reid (D-Nev.) indicated in a statement that senators were likely to seek changes in the legislation originating in the House. He said the Senate Finance Committee would start considering stimulus provisions next week.

Reid said he was "proud that Democratic negotiators were able to secure tax relief for millions of Americans who would have been completely left out of the president's proposal." But he added: "I expect that the committee and other senators will work to improve the House package by adding funds for other initiatives that can boost the economy immediately, such as unemployment benefits, nutrition assistance, state relief and infrastructure investment." He said he looks forward to quick House passage "so that the Senate can debate these provisions soon and meet my goal of sending the president a package by the President's Day recess."

Under the deal, nearly everyone earning a paycheck would receive at least $300 from the Internal Revenue Service. Workers who earned at least $3,000 last year -- but not enough to pay income taxes -- would be eligible for $300.

Overall, 117 million families would receive a rebate check, including 35 million with incomes too low to have qualified under the earlier Bush proposal. Those 35 million families would receive rebates totaling $28 billion.

Full rebates would be sent to single taxpayers who earned up to $75,000 and couples with incomes of as much as $150,000. The value of the payments would decline after that and phase out entirely at incomes of roughly $87,000 for individuals and $174,000 for joint filers.

Pelosi dropped some key demands to keep the tilt of the package toward the middle class and to include the working poor. In addition to the unemployment and food stamp benefit extensions, she set aside proposed funding increases for low-income heating assistance and aid to state and local governments in the form of either Medicaid assistance or infrastructure funding.

Those concessions prompted some protest from House Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.), who huddled with Pelosi deep into the night hashing over the details.

House Democrats assured members the package still must go through the Senate, where Democrats could add additional provisions. With unemployment still at a relatively low 5 percent, the demand for unemployment insurance extensions has not reached a politically fevered pitch. But it still may, they said.

"The Senate will want to speak as well. We want to ensure that Congress does its utmost for the American economy and for the American people," Senate Finance Committee Chairman Max Baucus (D-Mont.) said this morning. He announced that his committee would draft its own stimulus bill next week.

Baucus said he would like to increase the size of tax payments for the working poor, ensuring that virtually every family would receive similar payments. He said he also believes that unemployment benefit extensions dropped by Pelosi and Boehner should be put back in the measure.

Sen. Ron Wyden (D-Ore.), another Finance Committee member, promised to lead a bipartisan push to secure funds for infrastructure projects, such as road resurfacing, that he said could begin pumping money into the economy months before the government could issue checks.

To address the underlying economic issue of the housing slump, administration officials agreed to expand the Federal Housing Administration's ability to insure higher-priced mortgages and to help homeowners threatened by foreclosure renegotiate their loans without sharp increases in their payments.

The package would temporarily increase the size of jumbo mortgages that can be bought by government-sponsored Fannie Mae and Freddie Mac, from $417,000 to as much as $625,500 in high-cost housing markets.


Wednesday, January 23, 2008

Missed Fortune 101 is about managing your equity in your house. If more people had separated their equity from their house, they would be in a much better position than most people face.

With that in mind, here is feed with current real estate information.

Tuesday, December 11, 2007

Theses are some of the strategies discussed in Missed Fortune 101 by Douglas Andrew.

This is an excellent post I ran across recently on the benefits of keeping your equity separate from home for investment purposes. The original post can be found here, but I've placed it here as a courtesy to my readers.

By Michelle S. Garcia, Mortgage Consultant
Indymac Bank

There is a great debate within the inner-mortgage circles these days. Should we, as loan professionals, encourage clients to borrow as much money as possible? Or would consumers benefit more if we helped them to understand the advantages of 15-year amortization schedules and pre-paying principal? Let’s examine the pros and cons of both strategies.

Leveraging Your Property. In order to understand why you’d want to borrow as much as possible for your home purchase, you must first grasp the concept that equity has a zero rate of return. Here’s an example:

If Consumer “A” buys a home for $300,000, and puts 20% down, then they have $60,000 in equity. Over the next 5 years, the property appreciates $100,000 in value. Consumer “A” now has $160,000 in equity.

Consumer “B” buys a home for $300,000, and puts no money down. At the end of 5 years, that same home is now worth $400,000. Consumer “B” has $100,000 in equity, which is the same appreciation as Consumer “A”, a net $100,000.

As you can see, your down payment has nothing to do with your rate of return. What becomes important is how you choose to manage the $60,000 you didn’t use as a down payment. If you use it for frivolous activities, such as buying toys or going to Las Vegas, it would be more prudent for you to use that money as a down payment. Especially since this will enable you to obtain a lower interest rate.

However, if you were to invest the $60,000 in a vehicle that can out-earn the cost of that debt, then this could be a formula for success. This is why some lending professionals suggest putting as little down as you possibly can, maximizing your tax write-off, and investing the rest. This principle has been applied for many years in the life insurance game. The old saying goes, “Buy term and invest the rest.” The key component is taking the money you would have used as a down payment and creating an asset accumulation account. This account should earn a significant enough rate of return to enable you to pay your mortgage off entirely and achieve the ultimate goal of being debt-free.

Paying Your Home Down Rapidly. There are very few times over the course of my career that I have seen a client with zero debt and no financial difficulties. Choosing to pay off all of your debt can reduce stress and help you to gain freedom of cash flow for investment opportunities. A 15-year mortgage or a bi-weekly payment strategy provides structure. It can also put you on track to have your mortgage paid off within a set time frame. Simply put, it contains built-in discipline. It’s important, however, to understand that regardless of how rapidly you pay your home off, you’re not getting any greater rate of return on your investment than if you paid it off slowly. Conclusion. So how does one determine which scenario is best? The choice depends entirely upon the individual. Savvy consumers who are disciplined, and are comfortable taking chances from an investment perspective, would do well with the first scenario. Over the course of time, it’s been proven that your rate of return over the long-haul will be far greater than the rate you’d pay for a mortgage in today’s rate environment. It’s important to seek the advice of a skilled investment advisor to ensure success with this strategy.

Saturday, December 08, 2007

Scott Burns has an interesting article that shows you other investment alternatives to those posed in Missed Fortune 101 here.

One thing he does not mention is how much better off people wolud be if they had seperated their home equity from their house. Anyone who has read the book, and lived any amount of years knows that the real estate market is cyclical and right about now would be a great time to have some extra money to invest in real estate.

Friday, August 31, 2007

The strategies discussed in Missed Fortune 101 are controversial sometimes and here are a few blog post that are interesting. I'll add some more to my mixer.

Sunday, August 12, 2007

Missed Fortune 101 reveals that many people are misguided in their retirement planning. Plenty of people use short term investment vehicles for long term goals and vice versa.
Similarly, often people focus on their problems instead of solutions.
For instance many people focus on the amount of debt they have instead of focusing on ways to increase what they already make. There's an excellent article you should check out at


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