Table of Contents
1. Trust Your House?
2. My Banker Just Laughed
3. The Rules For Money Have Changed
4. Travel
5. New Year
6. What Do You Want?
TRUST YOUR HOUSE?
I hear a lot of comments about placing your residence in a trust to protect it from a
malpractice claim. There are some problems concerning this that I felt you might
want to know about. You could lose the tax deduction on your mortgage interest and
possibly the deduction of your real estate taxes as well. You could also lose the
$500,000 exemption from capital gains when you sell the house. You may have heard
all the benefits of putting your house in a trust. I thought it was important that
you hear the other side of this as well.
MY BANKER JUST LAUGHED
I went into my bank and said to my banker that I want to borrow $2,000,000, but I do
not want the money right now. I told him that I wanted them to hold the money until
I was age 65. At that time I want them to give me $62,000 per year until I am age
100. I will agree to pay them interest on the $2,000,000, starting right now, but I
will not pay anymore than $100 per week. I also want to have the option after 10
years to get all of my interest back.
Once they start paying me $62,000 per year at age 65, I want them to make sure that I
do not have to pay any taxes on that money and I also want them to make sure that the
money is protected against creditors and any lawsuits.
If I die after I give them my first payment of $100, I want them to give my family no
less than $400,000, and no one has to pay off my loan of $2,000,000. If I die at age
65, I want them to give my family at least $650,000. Even if I die at age 100 after
I have received over $2,000,000, I want them to give my family another $1,000,000.
I want this all in writing and I want to be the only person who can change this
agreement. My banker just looked at me and started to laugh!
I then told my banker that I set up these arrangements for my clients every day. How
about it? Will your banker do that for you? I can!
THE RULES FOR MONEY HAVE CHANGED
Since we are starting a brand new year, I thought it might be a good idea to remind
everyone that the rules for money have changed and you need to be aware of those
changes. i hope this helps.
BANKS
Have you noticed the warning that is printed on your checkbook? "WARNING; THE RULES
FOR MONEY HAVE CHANGED". You say you can't seem to find it? Well it's there even
if you can't see it. You might want to put that warning on your checkbook and every
other book or folder that has to do with your finances. The rules have changed and
not in your favor. Here are a few of the changes that you need to commit to memory.
BANKS ARE NOT A SAFE PLACE TO KEEP YOUR MONEY
By the way, this is not a new change. It has always been that way but you were not
aware of it. Banks are falling faster than the autumn leaves, and that fallout will
continue. You say your bank has the FDIC on all accounts? That may be so but what
is going to happen when the number of banks that have failed keeps growing? The FDIC
is about as secure as our dollar. Need I say more?
YOU WILL PAY MORE IN FEES THAN THEY PAY YOU IN INTEREST
You have heard the saying, "the house always win?" Well that applies both to casinos
and banks! Banks love your money and they also love the interest they earn on your
money and they are also stingy.
IT IS TIME TO DEMAND A BETTER DEAL FROM YOUR BANK
For some reason people have a lot of respect for banks and bankers. You can keep
that respect but you need to have a long talk with your friendly banker to get most
of the fees and charges reduced or totally removed from your accounts. You need to
remind them that there is a bank on every other corner and if they won't reduce them
you are moving all your accounts to a competitor. That should make them move a little
faster.
PARK YOUR EXTRA CASH IN A MONEY MARKET
Keeping all your money in your checking account helps your bank-not you! Move that
cash to a money market account. Do not use the one at your bank. Every mutual fund
family has a money market and pays more than your bank does.
QUIT BUYING YOUR CHECKS FROM YOUR BANK
There are lots of companies that print checks and you can cut the cost for those
little pieces of paper in half.
IT IS TIME TO MOVE TO ON-LINE BANKING
When was the last time you walked into the lobby of your bank? Well why are you
still living in the 19th century? It is time to go online. It is easier, faster,
and cheaper. Become a part of the global economy.
Remember what Miss Piggy said about banks: "You have to wonder about an institution
that puts a chain on a ballpoint pen." Remember what I said at the beginning of
this; "BANKS ARE NOT YOUR FRIEND."
CREDIT CARDS
Here we go again with more changes in the rules of money. These changes have to do
with credit cards. Those pieces of plastic that one day will bury us all! They can
be harmful to your health and your financial health as well. As with any medication,
use sparingly. Here are some more financial rules to keep you safe while handling
these creatures.
YOU NEED TO KNOW THE TERMS AND INTEREST RATE
When was the last time you read the "fine print" on the application form or the back
of your statement you get every month? I am not suggesting that you do that but you
need to understand that they can and will change the rules. They can charge fees and
can also increase your interest rate at will. Do you know what your annual
percentage rate is? Take a look at the lower left-hand corner of your next
statement. It is there. You may see that the rate is much higher that it was when
you took out the card. Surprise, surprise!
When was the last time you called and demanded that they lower your rate? It is time
to do just that.
IT IS TIME TO CULL
Do you even know how many cards you have? It might be a good idea to check a copy of
your credit report and see how many cards are in your name. It may list some that
you thought were no longer around. That hurts you to have all those cards. It is
time to clean house and only keep the ones that give you the best terms and the best
interest rates.
DO YOU KNOW WHAT YOU HAVE?
If you lost your wallet today, do you have a list of all the cards in it? How about
the number of that card and the "800' number to call to cancel that card? How about
the cards in your spouse's wallet, or your kid's? Maybe you need to round everyone
up and lay those cards on your copy machine and take a picture of both sides.
CREDIT CARDS CAN BE GOOD
Yes I actually said that. For any financing, credit cards can be used just like a
line of credit. The terms and the rates will be better if you have called and gotten
that rate down. Check it out-you may be pleasantly surprised.
GOLD IS NOT WORTH MORE
Cards come in all flavors and levels of precious metals but that odes not increase
their worth, only their fees. It may be nice to reach in your wallet and pull out
that card that is either gold, platinum, or even black, but is it really worth what
you are paying for it?
MORTGAGES
Those sacred rules of money are no longer sacred. Here are some changes you need to
be aware of when it comes to mortgages.
MORTGAGES MONEY IS THE CHEAPEST MONEY YOU WILL EVER BUY
If you only remember one of my rules on finances, this is the one to never forget.
It is the cheapest money you will ever buy. Think about that for a moment. You get
a mortgage at 6%. After a tax deduction it will only cost you around 4%. Why would
you want to pay that of so quickly? Why not take that extra money and build some
savings?
A 30 YEAR MORTGAGE IS YOUR BEST BUY
This gets back to the first rule. Yes you save a lot of interest by using a 15 year
versus a 30 year mortgage but if you just took the difference in payments and put it
in the bank; you could pay off that 30 year mortgage at the end of 15 if you wanted
to. You might want to keep that cash in case you ever need it for an emergency.
WHY TIE UP YOUR MONEY IN A HOME?
If you pay off a mortgage and you need to get to your money, how do you do it? You
have to borrow it and whatever the current rate is. That is not a good deal. What
if the value of your home drops? It can and it will and you could see most of your
equity disappear. It is not a good idea to tie up your money in the equity in a
home. It is not safe there.
EQUITY IN A HOME IS NOT SECURE
Unless you have been living in a cave and have not seen any newspapers or television
news reports, you should be well aware of this. It is a fact of life. Don't forget
it.
TRAVEL
January
15-18 Parker Seminar; Las Vegas, Nv
29-2/1 Seminar speaker; San Diego, Ca
February
9 WSCA Seminar speaker; Vancouver, Wa
10 WSCA Seminar speaker; Yakima, Wa
12 WSCA Seminar speaker; Seattle, Wa
(contact the WSCA for details)
March
10 ACA Teleseminar 1:30-2:20pm
(contact the ACA for details)
21 The Family Practice Seminar speaker; Atlanta, Ga.
26-28 OUM Advisory Board Meeting; Nashville, Tn
NEW YEAR
This is the beginning of a new year. Even though it is a new year, we will continue
to see a lot of the financial turmoil that started last year. I think that it will
be with us for quite awhile. That does not mean that you should dig a hole and climb
in and wait for it to go away. You need to make sure that you are staying up to date
on all of your financial dealings and don't assume anything. Like I said earlier,
the rules for money have changed and you need to keep up with those changes. 2009
will probably be a very strange year but it can be a good year for you if you stay
alert. Let's make it a truly "Happy New Year!"
WHAT DO YOU WANT?
Since we are starting a new year, I thought I would ask you what do you want to see
in the HOTLIST for this year? I am open to suggestions. I may not follow them but I
am still open to them! Either e-mail me or give me a call and let me know what you
want.
Thanks!
You should consult with your own personal advisors before acting on any of the ideas
in this newsletter. You might also want to pay close attention to your "gut
feelings" as well!
Keep in touch!
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