The financial experts always say you should have six months worth of salary set aside as a buffer but putting that kind of nest egg together is sometimes easier said than done. So look at the problem with a different perspective. Create a budget of all your “necessary” monthly expenditures; and by necessary I don’t mean that subscription to HBO or the two dinners a week you eat at your favorite nightspot. I mean really take your personal budget down to the bone and then figure your monthly expenses. My grandfather used to ask me, “Do you want it or do you need it?” That’s the kind of gauge you have to use in this kind of situation. I think you’ll be surprised at just how little you can actually live on each month when you compare it to what you’re spending today just by eliminating all the extras you spend every month.

If you have credit cards with a balance, you should call the bank and see if they will give you a better deal on the interest rate. This has become a very competitive business and if you ask them to lower your rate, they just might do so. One thing is certain – if you don’t ask them they will never lower your rate.

Make sure you have all your documents available and ready should you need them. This should be part of your normal routine but most of us don’t get things in order until someone actually asks us to present a copy of something. Then we madly start looking through what we thought was an organized system only to find the document we are looking for isn’t there. So, get your paperwork together; things like bank statements, past year(s) tax returns, passports, and insurance documents. You might even consider putting these important documents in a fireproof box that can be grabbed and taken with you in case of emergencies. And consider putting a stash of cash in the box too…just in case.

In anticipation of the worst, you might also consider creating a secondary source of income, whether it’s starting your own home-based business or working part time for someone else. If you have extra income coming in prior to an emergency situation, you’ll be better prepared when or if something does actually happen. Maybe you have a talent or a hobby that you can use to create an extra income source. What about a course you can take to learn a new skill? There are a number of things you can do to generate extra cash flow; start investigating them before you need to.

Finally, one of the greatest things you can do for yourself is to keep moving forward, with a smile on your face and your head held high. Get comfortable in developing your networking skills because in today’s world, this is a requirement. Don’t fall into the “out of sight, out of mind” syndrome but rather maintain a solid image and a well-defined approach when engaging people within your area of expertise. Whenever possible make connections with others who may be able to help you. Go out and keep shaking hands, make phone calls, send emails…never allow yourself to fall by the wayside. Just go where the people are and use all types of media to meet them. This can go a long way in helping you to maintain a solid footing during the rough times and just might assist you in locating that next big career move.

The bottom line – in order to make sure you move through this unpredictable economy successfully you must be well prepared. Arrange your life so that when (or if) something unexpected should happen, you’ll be ready for it while you smoothly “sail through” to your next big opportunity.

But there are a few things that you can do to help the situation while the years ahead try to mend the financial damage that we’ve experienced recently. The first thing, and probably the most important, is not to ignore your current situation. Listen, I know that many of you have not been checking out your banking or investment statements lately because you just don’t want to see that bottom line figure. The fact remains, unless you know what that figure is, you won’t know where you’ll need to start the repair or how aggressive you’ll have to be to fix the problem. So, stop hiding and take a look. You might not like what you see but at least you’ll know where you stand and that will be the beginning of “fixing what has been broken.”

If you haven’t done so already, find an accountant. There have been so many changes to the tax laws in the past year and even the professionals are overly challenged when trying to keep up with the latest tax modifications. Many of you have started your own businesses this past year and if you try to mix that with your personal taxes, well, you could be in for an ordeal that might lead to errors in your final tax figures. So, let someone who knows how to handle the situation do it for you. Sure, it’s going to cost you a few dollars but in the end you’ll be more at ease and content that you did it the right way and, believe me, that will be well worth a few extra dollars.

In the computer age, you can automate many of your financial responsibilities that in the past you would normally worry about. Things like automatic bill pay through your bank’s website or payroll deductions to your 401(k) plan or savings accounts can do much to take some of the pressure off. You can also have your utility companies or a personal credit card simply debit your account on a monthly basis and you won’t ever have to worry about late fees. But even better than that, since you won’t have to actually sit down and pay the bills, you’ll have a lot of extra time to do the things you really want to do.

As we approach 2010, use some of your extra time to sit down and write your goals for the New Year. What did you want to accomplish this year that you didn’t? What would you like to achieve next year? Maybe it’s that vacation you’ve always wanted to take to Paris or finally finishing your education; whatever your goals are, just make sure you write them down and post them someplace. Ask yourself where you see yourself in five years. Then, prioritize those goals to figure out a way to make them happen. Once you’ve set your personal goals, make sure you stay focused and remain on course to complete them successfully. Constantly review and update your list of goals and modify them to reflect any life changes, experiences or priorities. If you want to make something happen you must set and manage your goals. Make that a priority this year.

If you are dedicated to creating a booming year ahead, you must make sure that you look at everything with a new point of view. If you’ve been doing things in a certain manner that hasn’t really been working out for you, the only way to change the outcome is by changing how you deal with the problem. Make something happen in the coming year by producing a positive environment that will allow you to realize the success you are striving to achieve.

There are numerous methods of determining the best methods of handling our money that didn’t exist a decade ago.  Most of us have personal computers at home that can be used to assist your financial development.  There are many software programs that can help guide you by showing where your money is currently going.  These programs can help you determine the best methods of using your cash to enhance your investments.  Determine how much is coming in, how much is going out and establish where the money is going.  It’s really that easy.  Once you know those facts, you can make your adjustments.

One question that you really should ask yourself is whether the investment methods you use are actually working for you to build financial wealth.  If there have been problems, changes in the market trends, an alteration in your personal lifestyle (a new baby, a recent move, a new job, you’ve just married, just divorced) then make the necessary changes to make sure your money is working to fit your life’s changes and goals.  Interest rates are down today and it may be time to consider refinancing your home but only you know whether that’s something you should do or not.  Plus, make sure you build at least three to six months worth of living expenses, if you don’t already have that amount put away safely. 

Other areas of interest to your personal financial life include your insurance coverage.  If your agent hasn’t called you recently, pick up the phone and dial your agent’s office and request that you take an inventory of your coverage (home, life, auto) and adjust where needed.  For goodness sake, examine your credit report at least once a year.  It might be a good idea to actually contact the credit agencies twice a year, especially if you are about to make a major purchase.  

Just as you need to develop and then redevelop your short and long term goals throughout the year, so it goes with the state of your financial well-being.  This should not be an unpleasant chore but rather something enjoyable.  Remember, by conducting these occasional checkups, you are insuring that positive financial results are more likely to be attained. 

Anything can happen throughout the year (as this year has shown), which can force you off your fiscal course.  Events that can make a difference in your life occur at a moment’s notice.  Just make sure that when unforeseen events occur, you make the needed corrections that will rebalance your financial life.  Plan to make a quick check every three months or so.  This is all part of goal setting that I believe is so important to leading a balanced and prosperous life.  Stay focused and make sure you perform your personal checkups on a regular basis. 

I usually find that if I’m not certain of where I’m going or how I’m getting there, I will tend to have more concerns than if I actively sit down and plan for the future.  We hear on the financial news programs every day that investors are “worried” about a variety of things that will move the markets lower.  What’s the point?!  Let’s start planning our personal situations and stop creating the anxiety.  The summer months are over and we are now preparing for autumn and the changing colors of the trees, feeling a nip in the air, and the smells of the season from cinnamon to evergreen.  I don’t know about you but I think this is a great time of year.  

Sure, there are some challenges ahead which could complicate our national and personal finances.  The negative scenarios that the U.S. economy is pushing through today along with the ever-increasing cost of energy could certainly cause a drain on our personal finances and put tension on the retail sector as well as pressuring the trade gap.  But there’s not a lot we can do personally to generate solutions for these hot topics.  The one thing we can do to sustain our personal “corner of the world” is to develop a positive and constructive attitude.  It really does help.  When you decide to carve out your personal path using even a small amount of confidence, you can’t help but develop the belief that you can succeed at anything you set out to do, no matter what the odds.  Believe me, I’ve done it. 

Positive thoughts and actions create positive results. If you have the wrong attitude then your trading could also be affected.  Doing anything with the wrong attitude will lead you in a direction that will be a burden rather than a blessing.  Individually, things can be tough to deal with but collectively – as an encouraging population – we can do anything.  As we approach the final quarter of the year, I’m hopeful for the months ahead and I hope you are too.  We’ve proven this factor in the past and I have no doubt that we will bear it out again in the future. Become proactive and cheerful by developing your attainable goals while staying focused on the situation(s) at hand.

The improvement of anything you do in life requires you to get the education you need, whether formal or informal.  If you feel like you need to improve your personal investing skills why not find a trading group in your local area and work with others to perfect your skills or take a formal class.  You’ve heard me say it before – it’s all about education.  If you are learning to play golf, I’m sure you have to practice.  If you are trying to master algebra, you have to study.  The same is true for an effective and profitable financial life.  Never give up! Determine your direction, get educated and you will get results! 

Happy trading!

For instance, while a certain amount of your portfolio will, no doubt, be invested in the equity market, you should also be involved in other areas of opportunity like commodities, options, bonds, real estate, and you should also consider the Forex (foreign exchange) market.  The Forex offers you another method of diversifying your investment strategy to protect your financial future.  I advise you to consider the potential benefits of the Forex and invite you to learn all you can about this unique method of investing.  One way to learn is to get a copy of my best selling book, Forex Made Easy…6 Ways to Trade the Dollar.  I wrote the book to be very investor-friendly and it will help you understand the Forex market and how to trade it.  It’s actually very simple and that’s why I like it so much.  The way I trade the currency markets only involves the U.S. dollar against six other major world currencies. That’s it!  Not 40,000 or more stocks or mutual funds…just six currencies!  I like that kind of simplicity.

Plus, if you are considering investing in the stock markets, you might want to consider issues that offer dividends with yields that exceed the 2.5% mark.  That’s probably much better than yield you can get at your local bank.  Check out companies that are showing brisk growth in such industries like the financial, energy or consumer sectors. Just do your homework and you’ll find something that will fit the mold and desired direction of your portfolio.

Determine what types of investments make you most comfortable and which investments make you uneasy.  If you have trouble sleeping at night because you’re worried about your investments then you shouldn’t be there.  Educate yourself daily through various media sources available to you; books, magazines, the Internet, television and radio.  Go to workshops and perhaps consider taking a class at the local college.  Always practice trading on paper before you invest any of your hard earned dollars in anything you are not familiar with. 

Listen, these are some extremely volatile days.  It seems like the financial markets have tried to maintain some kind of balance but recently this hasn’t been all that successful on a global basis.  Political rhetoric, deep concerns about the world’s economy, the growing federal budget deficit, and the daily fears of terrorism around the world has taken its toll on all of us over the past couple of years but now is the time to rebuild.  You should always keep in mind that no matter what the Dow is doing, no matter how the NASDAQ is trading, there are always investment opportunities that are increasing in value.  Just remember to always practice the one method of cutting the odds of losing your valuable investment dollars.  Assure that your portfolio is as diversified as possible. 

One of the most profitable times in my life was during my dedicated real estate career; I say that because, at the time, that is all I did.  That period also taught me about diversification and the importance of good money management, but that is another story.  Anyway, during this time (the late 90’s) I began to invest in real estate.  The market was a good buyers market so there were lots of opportunities, however interest rates were a little higher and I had pretty bad credit.  As I was growing up through high school and after my graduation, I didn’t maintain my credit as I should have.  Contrary to what people believe, think or say, you can fix your credit. I did but it took many years.  I was able to eliminate all the bad and replace it with all good. Yet again, that’s another story but you can do that to.

As far as this story goes, I identified a great place to make money in the real estate market place, most specifically rentals, and investor rehabs.  The problem was I didn’t have any extra cash and poor credit. So, I set out to accomplish my goal. I had to use private money; in fact I was paying interest as high as 18%, one year notes and five points.  Yikes, you say.  Me too!

The difference was this; if you aren’t putting any money down or little money down then your return is infinite regardless of what you are paying for the use of the money.  I always get the terms of the money first then I look for a deal that fits within those parameters.  That way I can still make money paying whatever the terms are.  That’s what I did.

I bought literally hundreds of properties and then started buying multi-family properties.  As I have written before, you need to move the ball along.  I was able to eventually find better pricing that was still high but not as high.  The point of all this is to show you that credit and using private money is a possibility that you can consider and today’s financial landscape offers a great opportunity to go out and find deals.

Let’s talk about no money down deals and better yet getting money back. First, there are lots of them out there. Maybe not as many no money down deals as in the past but certainly little to no money down deals are still available.  When I first started out I was able to do a lot of deals that actually paid me when I closed.  The key is to find someone that will deal with you.  Do your homework and keep moving the ball forward. 

It seems that the real estate market runs in cycles, about five to ten years.  We just got through a big one where everything was going up.  Homeownership in the U.S. has risen to nearly 70 percent.  Now we are on the down side and we are already near homeownership levels of 1985.  The time for rentals is back.

But what you will see is that most of the apartment buildings that sprung up during the last great rental period have converted to condos, and thus have started to experience foreclosure.  Today we are facing a huge inventory of foreclosed properties, and all of the people that lived in those properties will be looking for places to live.  Why not in your condo or home?

The next great real estate cycle is now at your feet.  When is the best time to get into the real estate rental market?  How about when interest rates are low and prices are even lower?  Ah…..would that be now?  I think so.  Now what we have to do is get creative and we have to find out how to get into the market using leverage or better yet – cash.  I personally have begun a life of living debt free, I simply believe that cash is king and credit will enslave you.  However, with that said, leverage and finance have their place and you may not be able to run out and pay cash for your next rental property.

There is no question that buying bank-owned properties for cash will get you the best deals, but banks are now more motivated than ever before to get real estate they own off their books.  They are motivated by their own business model and oversight by the federal government.  So, these banks are more willing to loan you money now than ever before.  Laugh out loud if you will but it is in their best interest to do so.  You can get creative and work some pretty good deals out with them and they will be the bank.  It is better for them to loan you the money on the house than to have the bank sit on it.

The way this cycle will work is that you can go out buy a house or a condo for dirt cheap prices – I mean 30 cents on the dollar.  Remember that the real estate market will run in cycles (trends, if you will).  On average a typical home in the U.S. will double in value every eight to ten years.  And we saw that prior to the last pull back.  If you bought or buy at the end of the cycle you can get hurt, so we buy our home now when prices are at an all time lows; we rent the home and start using the strategy in which we pay extra principal payments.  With interest rates so low you should be able to have enough extra principal payments that will allow you to pay this home off in eight to ten years. 

You are then sitting on a piece of property that is 100 percent cash flowing, even if the market pulls back again you will still have cash coming in with little overhead which will allow you to make the next cycle.  But this is the best part, let’s say you buy a home for 50 cents on the dollar.  Say a $200 thousand home that in today’s value is $100 thousand. Believe me, you can get them for far less today.  Over the next 10 years you pay it off and the value of the home increases to nearly $400 thousand.  But you own it free and clear; so let’s say you have another correction.  It would have to go a long way down before it really starts to affect you because you own it free and clear.  Even if it went back to 10 year lows you still have equity to pull out. 

On a side note you can always get a mortgage or refinance later and pull cash out to invest tax free later.  Although this is not a debt free type of mentality, there are circumstances when leveraging money will be to your advantage.

With all that said, keep looking for more articles from me on this subject as I am personally doing this.  I love real estate as a way of diversification and now is the time to make your next fortune in real estate.

Happy investing,

James Dicks

Whether or not you are behind on your mortgage, you can ask your lender for a mortgage modification. Remember, if you are not behind on your mortgage you can still ask for a modification.  Rest assured you will be told that there is nothing they can do for you until you are late.  Do not fall into that trap!  I personally know many people that have gotten mortgage modifications after they were told they could not.  The lender told them they would have to be at least 90 days late.  I know for a fact they have never been late and had their balances lowered, the interest and/or payments lowered, forgiven or waived.  But you simply can’t take “no” for a answer

If you are late – same thing; don’t take “no” for an answer!  Just keep asking until you get the answer you are looking for.

Here is the first thing you need to do – whether you are late or not.  Call your lender and specifically ask for the Loss Mitigation department.  Again, don’t take “no” for an answer.  You may have to call multiple times, but you will find someone to answer the phone who actually cares and that can get you going in the direction you need.  What you will find out is that you will receive as many answers to the same questions as the number phone calls you make.

Once you get Loss Mitigation, let them know your situation.  Let them know whether you were laid off, fired, had a pay cut…whatever. You have to let them know your financial situation has changed from when you first purchased your home, including the fact that your home is probably worth 30 percent or less than when you initially bought it.  In fact you might even consider giving the keys back to the lender and just buy the house next door for 50 percent less.

I can tell you that the banks – all of them – need to cut deals to sell their real-estate owned and/or non-performing assets.  In fact, many of the banks are encouraged or even rewarded by the government for getting rid of their non-performing assets.  That translates into working deals out with you.

If the bank reworks your loan and makes it current, then the bank will be able to move that loan off their non-performing assets list.  They are very motivated to do this.  The longer the property takes to foreclose, the longer it takes the bank to free up the money they have tied up on the non-performing asset, thus they want to cut deals and modify loans more than ever before.  So don’t be the one reading this saying I already did what you are saying and was told “no.” If you are saying this, you will lose.  The banks are changing their minds daily.

After you have started the process with your lender, you can go to “Hope Now” online.  They may tell you that you cannot file with them, again don’t take “no” for an answer; insist that they do.  Hey, even if you get denied – so what.  I know people that have been denied numerous times by their bank and by the “Hope Now” program only to actually get approved many “no’s” later. And that goes for people that have never been late before.

Okay, this is especially for you former Countywide people out there.  I have heard that Bank of America is so far behind that they are suspending actions of foreclosures on their Countrywide loans until they get caught up.  Furthermore, I specifically know someone who has a loan with Countywide that is currently going through the modification program.  They were about 90 days late as of February and called Bank of America to request a mortgage modification; they also filed with “Hope Now.”  Here is what has happened so far.   Nothing!  I mean nothing!  Well, except they haven’t made a payment and their loan is current.  What the bank did was tack the past due payments of the loan to the backend and then made the loan current.  They then said that until they get caught up to review the modification request no payments would be due and that the loan would stay current. So each month they get a statement from the bank giving them the loan balance and showing that they are current with nothing owed.  It has been months since the modification request. If you have an old Countrywide loan, start making your calls now requesting a mortgage modification.

I hope this helps you and don’t forget you must have faith above all things.  Don’t give up or as my uncle says, “don’t take yourself out of the game, it always gets better and as long as you move the ball along, things will change.”

All my best –

James Dicks

Today our “American Dream” is at risk in every neighborhood from coast-to-coast.  It’s not just a newspaper headline anymore, it’s actually happening to us.  I have seen many communities lose their sense of identity as families watch other families they have known for years suffer foreclosure on their homes.  Vacant homes are not what we ever imagined the “American Dream” to be; it’s not how we thought this story would end.  We, as Americans, have always worked hard to obtain this “dream” but now the unemployment rate has hit 9.4 percent and so many qualified and dedicated individuals are out of work.  The “dream” seems to be slipping away from us and there’s not a thing we can do about it. 

We, the people of a “former” America used to graduate from school, go to work for a company for 40 years, retire and live the rest of their days on a corporate pension in a paid off house.  That just isn’t the case anymore.  The one thing that many elderly American’s will be bringing with them into retirement is their mortgage.  This will place a real burden on their fixed income. 

But wait just a minute….it just came to mind that the American Dream was never about greed, fortune or lofty positions.  It was always about a promise that tomorrow could be better; a thought that we could leave an even better life for our children and our grandchildren.  That’s the problem.  Hey, we need to remember that we can lose our homes and just get another one.  That’s not even an issue.  The one thing we can’t lose is our values and our sense of family and community.  That cannot happen or the dream is dead.  We are Americans; we can always turn the situation around. 

We just celebrated the 65th anniversary of D-Day.  Those were tough times.  Following a decade of depression, we were suddenly forced into a World War that took millions of our precious lives.  Those left behind willingly took jobs in aircraft manufacturing plants, grew their own gardens in the backyard in order to eat, and dealt with a rationing system that forced them to do without more than not.  Maybe it’s time for all of us, as an American population, to get tough.  You have to admit, we’ve gotten soft.  I’d rather my family not experience hard times for one moment but these are challenging times and we all need to get strong.  All I’m saying is we need to start to adapt, improvise and overcome.  That’s what I learned as a young recruit in the U.S. Marine Corps and now these attributes are making it around full circle into my personal life. 

No matter who is in control of the U.S. government, our population is in a constant state of complaint.  So, I think it’s time to shift the focus from the government to our personal lives.  Let’s all start to take more responsibility for what is happening in our lives.  If you look closely, I think you’ll find more good things happening than bad things.  Try it.  Write down three good things that happened to you today.  Stop the constant complaining and consider what is going right in life.  It will be better for you, your family, your neighborhood and your country.  We can all do this – allow history to repeat itself and allow the “tried and true” American spirit to bring us to new heights from this day forward.