Archive for the 'Personal Finance' Category

Who Creates Your Economy?

Monday, July 7th, 2008

Do consumers create the economy, or does the news create the economy we experience? I’ve been thinking about this a lot lately. Why is it that when the economy is sizzling we feel positive and go out and buy what we need even if nothing has changed for us, and when the economy slows we step back and allow fear to grip us?

A few years ago when the housing market was roaring and seemingly unstoppable there were some lone voices touting that it was only a matter of time before the “housing bubble” would burst. But, these voices were few in comparison to the din of positive ones, so buyers continued to buy and sellers continued to sell with ease.

The negative voices started drowning out the positive ones when banks began showing losses in the subprime market (loans to buyers with sub-par credit), which caused buyers to hesitate and stand on the sidelines. As buyers withdrew from the market prices dropped based on oversupply and decreasing demand. As values sank banks began reigning in many of the programs that had enabled a majority of home purchasers to buy, cutting another segment of buyers from the market and compounding the problem.

While this is an over-simplification of what happened, I believe the repetition of the message that the real estate market was in a melt-down reached a saturation point in the consciousness of consumers causing the market to come to a halt. When a vast number of buyers stopped buying – home prices tumbled – affirming the ‘bubble’ theory. So, if we consumers contributed to creating this stalled real estate market can we UN-create it?

In order to release the brakes on the economy, we have to realize that our buying habits affect the economy tremendously. The only way to begin to reverse this economic contraction is by first recognizing what’s working in our lives, no matter how small it may be. This doesn’t mean we don’t acknowledge the difficulties and challenges we or our fellow citizens may be facing, what it does mean is that we take whatever action is necessary, do what we need to do, and then we move on. We don’t allow ourselves to wallow in the negativity. Only when we begin to feel confident about the course of our own lives will the economy begin to perk-up.

Do you have business-clients to work with? Be grateful. Even if it’s being able to pay your bills this month – commend yourself. If you have the money to buy something you’ve been wanting – do it. Don’t allow the fear-based headlines to hypnotize you. Stop replaying the messages of lack and limitation and acknowledge what’s going right in your life instead. Do something you enjoy, even for an hour a day that distracts you from constantly dwelling on all this depressing news, and you’ll feel better and possibly even come up with a great new idea that will improve your life. Endless worrying will not solve any problems.

I’ve decided that I do create my own economy. My economy originates from within me. If I allow myself to be consumed by fear I’ll surely make wrong choices based on panic and probably end up creating the fearful circumstances I’m trying to avoid. I know for sure I’ll overlook opportunities. I believe that if I’m calm I’m more apt to come up with solutions. So, I’m choosing to focus on what’s working in my life rather than on what the headlines say. What’s the worst thing that can happen? I deal with my problems while remaining calm? You have to deal with them anyway.

I’d like to hear from readers who’ve overcome difficulties when they chose to focus on what was working rather than what wasn’t. We all need to be inspired. Share you story.

Independence Day: Choose the Thoughts You Will Entertain

Friday, July 4th, 2008

I started thinking about this day and what it means, in light of the current economic and emotional climate, early this morning. Our founding fathers, member of the 2nd Continental Congress, announced their intention to adopt the Declaration of Independence on this day in 1776. They declared their right to form a new country, to govern themselves and to CHOOSE a new way of thinking that elevated Liberty and the pursuit of Happiness in the consciousness of their citizenry.

This day we celebrate is in commemoration of our collective spirits standing together and saying, “We will partake of our unalienable right to live our lives with Liberty and in the pursuit of Happiness.” It is NOT a day where we are to shrink with fear about our futures.

The U.S. has been through some pretty tough times in the last 232 years, starting with the fight for our independence, the Civil War, WWI, the Great Depression, WWII, other recessions, etc., and now our current travails. The reason I point this out is that we’ve survived and even thrived after all these shocks to our collective systems, and we will again survive and rise from this low-point again too. That’s just who we are.

I wonder what the signers of The Declaration would say to us if they were living in these times?

I think they would tell us to un-plug from the collective fear that’s paralyzing our national psyches and start focusing instead on what we want to accomplish – not on the fear driven headlines. Many of the signers of the Declaration of Independence faced terrible circumstances for their stand on the Declaration. Some were killed by the British, or had family members killed, many went broke and lost everything they owned but they felt the outcome was worth their sacrifice and so they pressed on despite the odds. And that’s what we have to do now. Press on and focus on the good that exists right now in our lives – now matter how small it appears.

I’m going to begin my celebration of this day by focusing intently on what I know is the Truth about the USA. We are a great and resilient people and I see us prevailing and prospering thanks to each of us exercising our Independence from the collective negativity we’ve allowed to take hold of us. Opportunities still exist. It’s up to us to begin noticing them. Not unlike when we buy a new car and start noticing that car everywhere afterward, we must practice focusing on seeing opportunities. Whatever we choose to focus on expands.

I choose to focus on limitless opportunity for all. What about you?

All is Well And I Have Enough

Wednesday, July 2nd, 2008

Yesterday Steve made the following comment about the post, Is Advertising Making Us Poor?

We recently watched “Finding Nemo” on network TV. I was floored. It was nearly impossible to watch with all the commercial breaks. We decided to time it as I was sure the breaks were longer than the movie bits. Sure enough, eight minutes of Nemo, and 13 minutes of advertising. Unbelievable. No wonder kids have ADD, and want everything they see.

“The things we own, end up owning us.”
-Tyler Durden, Fight Club.

Angela writes:

Isn’t amazing what we’ve learned to put up with? I say - Turn off the TV!

First we’re bombarded with advertising to buy, buy, buy, and then we’re barraged by headlines saying that the economy is tanking. I think we need a national media black-out day where everyone just lives their lives and listens to their heart instead of media. Whatever we focus on expands.

Let’s all start thinking - All is well and I have enough!

Would our world change if we all collectively changed our thinking? My gut says YES.

Let’s get a dialogue going on this topic. What do you think?

More Depressing News About the Housing Market

Monday, June 23rd, 2008

U.S. Housing Rebound to be Prolonged: Harvard Study

By Lynn Adler

NEW YORK (Reuters) - Record foreclosures and limited access to credit will make it harder than usual to rebound from this U.S. housing market slump, the worst at least since World War Two, according to a Harvard University study on Monday.


This isn’t the news anyone in the real estate industry wants to hear, but I can’t say I’m surprised. My gut feeling is that we will not see a real thriving RE market for another 5 years, or so. That said, I think it’s time we Americans re-evaluate our continual striving to trade-up and take on more debt. Maybe this go-round with a depressed housing market/economy will allow us to ease-up on ourselves and be happy with what we’ve got?

Would you rather have a really big house, or really big life?

Any opinions on this? Please share.

To read the entire Washington Post article paste this link into your browser:


Want Advice About Buying Your First Home? Start Saving!

Sunday, June 22nd, 2008

Many people are still very unrealistic about what it takes to get financing these days. Despite the unrelenting headlines some people still don’t get that there’s a credit crunch going on that’s not about to end anytime soon.

A friend of mine had the following experience while working with a young couple in their early 30s looking to buy their first home. Both had excellent jobs with strong income. Between them they were bringing in over six figures a year, and their rent was a meager $1400.00. When she heard that she was elated. She thought these two were going to be a shoe-in for a loan. The trouble came when she asked about a down-payment. They hadn’t saved any money at all and wanted 100% financing.

They’d both been working for at least 8 years making oodles of money but they hadn’t saved anything, aside from their 401Ks which, thankfully, they wouldn’t touch. They were also leasing expensive foreign cars and had huge credit card debts that were never paid off because they just kept buying more and more stuff every month

When she told them they were going to have to start saving money, you would have thought she’d thrown holy water on Linda Blair’s character from The Exorcist.

“You only need to save up about 3% to qualify for an FHA loan,” she said as gently as possible. They still didn’t like it one bit. After their heads stopped spinning around they said they’d go home and talk about it, but she confided that she was pretty sure she wouldn’t be hearing from them again. She said she didn’t think either one was willing to give up a latte, let alone their $1000.00 per month shopping habit to save for a house. It’s a shame too, because with their income they could have afforded a really nice house.