Don’t Lose Every Penny ~ By S. Yvon Harper

Over the last several months there has been a lot in the news from market analysts regarding the U.S. Stock Market performance.  To say the least, it’s been a rocky road and it doesn’t appear to be coming to an end with the disclosure of major quarter losses from American companies.

I’ve been noticing some consistent changes in the mutual fund market too.  Over the last few quarters many of my clients have experience significant losses in their mutual fund investment accounts.  Especially, some retirement accounts such as 401k, 403b and the like.

In fact, after checking my own balances I was shocked to learn that one of my mutual fund investment accounts had lost another 36% in only 30 days.  Can you say OUCH!

This discovery prompted me to take some action to mitigate additional investment losses.  I’ll share the specific action in a moment.  However, consider this a special alert for Wealth Contender readers to be on guard if you have either retirement or regular mutual fund investment accounts.

So what action did I take?  I moved my remaining investment funds in to a Guaranteed Cash account that is paying a fixed interest rate.  Doing so will allow me to protect my money from additional losses.  At least until the equity market stabilizes.

What should you be doing?  Your first step should be to check all of your current investment accounts and balances.  Check balances against your last statement to see if you have experienced a loss/increase on your account.

Secondly, contact your licensed investment advisor to review your account’s available investment options.  Discuss with them the Guaranteed Cash option to insulate your funds from current or potential losses while the stock market is stabilizing.

A licensed investment advisor can also assist you with a strategy to re-enter the stock market too.  You can count on the fact that I will be looking to re-enter it as well.

Lastly, remember that while a licensed advisor will offer advice only YOU are the gatekeeper to ensure that you don’t find yourself saying “I lost every penny”.

Keep Contending,   ~Yvon

S. Yvon Harper, CEO
Focus On Finance, LLC

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Home Ownership: Now or Later?

ASK YVON

Dear Yvon: I just sold a home in Sonoma County CA that I was renting out due to a divorce. The house was too expensive to live in alone so the rent covered the Mortgage. Now I have about $135,000 in a CD. I was going to purchase a home but decided to wait as I watched the Interest Rates go up and Inflation concerns. I am renting a great home where my two boys are very happy and it is very affordable. My oldest will be leaving for college, but I won’t have to worry about those expenses. I don’t know if I should keep the money in a CD or wait as long as I need to purchase another home. I feel comfort in having cash in case of major inflation. What is your advice? Thank you ~ Karen

Dear Karen: Congratulations on your recent home sale. Having achieved such a wonderful investment milestone of $135k towards your future is awesome. As you continue to manage your current savings it will be a great source of prevision in the coming years.

Yes, it is wise to avoid the impulse to purchase a home before assessing your needs; even with real estate experts toting today’s market as a buyer’s paradise. Especially, when it appears that you currently have favorable living conditions for your family. Consider what it would cost you to duplicate these conditions through home ownership in your desired area. I’d suggest that you first define your short to long term financial and housing needs. For example, ask yourself questions such as:

• Why I’m looking to buy a home now?
• How much do I want to invest in a home purchase?
• What size home is needed? Who will live in it and how long?
• Do I need a home as a tax shelter?
• What financial needs may arise for funding in the next few years?
• Have I established and am I on target with my retirement saving goals?

By answering these types of questions you will better understand your current comfort level with regards to a home purchase. A good rule of thumb is to spend no more than 28-40% of your available Adjusted Gross Income on housing. To assist you in determining this amount for your financial situation I have included a home ownership financial calculator link here.

“A good rule of thumb is to spend no more than 28-40% of your available adjusted gross income on housing.”

No matter what you decide be sure to payoff all credit card and installment debt. Then dedicate a generous portion of your nest egg to remain intact towards your future financial needs. Keep getting personal with your finances! Best wishes ~ Yvon

Ask Yvon© 2008 is a written by S. Yvon Harper for Focus on Finance, LLC - (513) 383-0427. All rights reserved. Submissions for the ‘Ask Yvon’ column can be done online at www.AskYvon.com. There are no warranties, expressed or implied, as to the accuracy and/or completeness of the information posted in this column or any referenced material. Readers are strongly urged to consult with a qualified legal or financial advisor to analyze their specific financial situation before application of any advice from this column.

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Video THE BARON SOLUTION: Your Guide to Wealth, Power & Success - baron, series, son, solution, stocks - Dailymotion Share Your Videos

Resources are the key to discover what will and will not work in the quest for financial freedom. Sometimes you need to reload your arsenal with tools that help to support your foundation.

This video, the Baron Solution, offers free resources that are reported to be ethical and successful. Thought you might enjoy the resources offered.

Keep contending! ~ Yvon

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Do You Know the State of Your Finances? - S. Yvon Harper

Have you ever listened to a Corporate Leader deliver their annual ‘State of the Business’ address?

The address gives stock holders an update of the year in review of what the company accomplished, current business happenings and what’s on the future horizon. It also provides a global overview of the current pulse of the economy and its impact on business.

When was the last time you reviewed your personal financial pulse? Can’t remember? Maybe never? Well, in this time of uncertain global economic changes it’s a MUST and you can’t afford not to know the condition of your financial status!

In my next few posts I will be expanding upon ways of how to accomplish this by listing:

“5 Ways to Knowing the State of Your Finances”

Always remember that the first business to support is your own. Until then ‘Keep getting personal with your finances’!

~Yvon

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Kick into ‘Price Tolerance’ Mode ~ by S. Yvon Harper

Imagine my amazement to see gas stations proudly advertising Diesel at $4.09 a gallon! Now, whether you’re a driver or just happen to work at a gas station it’s been like a see-saw with the fuel prices of late.

While $4 diesel prices might not seem to personally impact you…be aware that price hikes between diesel and gasoline travel in pairs. What may not impact you today could be looking you in the eyes tomorrow.

And I’m only referring to fuel prices here in the Midwest. Anyone care to share what they are in other regions? Per chance the East or West coasts?

The truth is with the U.S. dollar declining and an economic stimulus package bailout on the horizon we are all at the mercy of the economy. The impact is felt from the gas pump to the burger joint. Can you say ‘recession’?

Let me ask you a question:
How does it make you feel not to have control over the cost you pay from day to day for the commodities you need and want…like gasoline?

Here’s my answer: It’s…ridiculous! It’s…frustrating! It’s…maddening! I’d boycott, if public transportation were available in my area!

Now that I’ve gotten that off my chest…none the better for it…here’s the reality of it all. Some prices we just can’t control…at least not directly. So, what cost savings are still left to be had? Plenty, if you know your price tolerance.

Okay, here’s Yvon’s syndicated definition:

“Price Tolerance is the unwillingness to spend your hard earned money on any product or service that exceeds your self-determined price point”. And I do mean any!

I once walked away from purchasing a pack of gum at a certain retailer, because they were charging $.10 more than I was willing to pay. Lets face it, I’m aware that $.10 may not be your deal breaker, but the fact is you must really began to examine the long term effects.

For example, since I purchase at least 3 packs of gum a week (I like to share) choosing to pay an extra $.10 over the long haul would cost me $15.60 over the course of a year and that’s given the price doesn’t go up!

Now, add this amount to any other inflated costs you pay for consumer goods. You can clearly begin to see the compounded effect. Take a look at the chart below:

Can you see the bigger picture here? Now, let’s flip the script and allow your price tolerance to kick in. You could not only SAVE these amounts, but get INTEREST on them too.

Let me assure you that in these days of an uncertain economy you need to begin storing up cash reserves, anywhere you can find them, for the long haul.

So instead of spending $2.29 for a burger check out the $1 menu at a fast food joint. It could save you an extra $134.16 over the course of a year, even if just done twice a week.

Instituting your own price tolerances will empower you to walk away from unnecessary spending. It will open your judgement to weigh every ‘deal’ before you release your hard earned money. In the end you’ll be the one who is richer for it.

So, tell me how high does your price tolerance go?

~Yvon

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“Keep Some Change” by S. Yvon Harper

Millions of Americans will be enjoying the benefit of having a portion, if not all, of their 2007 federal income tax withholding refunded. Undoubtedly, if you are one of them, endless thoughts on how to spend it may be present. Temptation to spend it on personal gifts, a get away vacation, or make a large purchase for the home can be irresistible.

While all of these can be worthwhile choices a question remains. Are any of them the best choice for your windfall? In reality, this is a rhetorical question that only you can answer.

Add to it that sometime this spring another cash allotment will be given to US taxpayers. For single filers the windfall of ‘free’ money is $600, for married joint filers $1200 with an additional $300 given per dependent. This second windfall is part of the government’s Economic Stimulus Package to boost the economy from the effects of an impending recession.

What’s the catch for this ‘free’ money? Nothing, just spend it. That’s right, the government wants you to spend all of it…buying anything you want.

So you may be thinking “Yvon, what’s wrong with that? After all it is free money.” I’ll agree with you, but only to a point. Take a moment to answer this question. If you were to take a look at your personal state of financial affairs what would be the verdict?

a) You’re solvent with minor debt,
b) You’re insolvent with moderate to large debt, or
c) You’re on the brink of a full financial depression.

Now this might not seem important to you with a fist full of free money, but if you don’t stop and take a moment now your ability to impact the answer can be lost once you spend your windfall. What’s my point?

Be sure to pay yourself and save some of your funds for your own ‘recession’. Don’t worry, you’ll have one sooner or later. With the current state of financial affairs my bet is that it will be sooner. Preparing for your future always starts today! Don’t be fooled by the myth that you need a large amount to get started either.

So while you may still decide to put some of the funds you receive back into the economy don’t forget about the most important economy…yours.

Yvon

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“Thoughts count…actions matter” by S.Yvon Harper

Inevitably its happened to each of us.  You mean to complete a task, but somehow it gets overlooked, forgotten and sometimes even ignored.  Most times damage control is available so no harm done.  Right?  When it comes to ensuring your successful financial goals…maybe not.

In my experience, working with personal finance clients, this is often a fatal mistake.   “Oh, I meant to pay that…I need to call to make arrangements on that doctor’s bill…We’re going on vacation so I’ll pay them next month…” and so on and so on and….okay you get the picture.

Thoughts count when you’re remembering a special thought about a friend, but in the world of finances only actions matter.  Bottom line make sure your financial actions count.

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Keeping Up with…You! by S. Yvon Harper

Have you ever wondered what financially successful people do that’s different from the average Joe? We probably have all heard the dismal statics that tell us most people are one paycheck away from bankruptcy. The mistake that many people make is thinking:

1. It will never happen to me!
2. They must have had a lot of credit card debt.
3. Bankrupt people are lazy…..etc.

Let me challenge you that in many cases that is probably not the case. In fact, you may be surprised to know that medical bills are more likely to topple someone into bankruptcy than a credit card. For some that may be hard to believe. Many times because they choose to believe the ‘hype’ the media spins on debt and credit cards.

At last, let me provide you with real and usable financial information that’s personal ‘for the rest of us’. You know, the ones who are open to hearing new truths about personal finance, struggling with debt, or just trying to start again including recovery from bankruptcy. I’m speaking from experience, because less than 3 years ago I was bankrupt. Noticed I said I was?

Zoom forward to today, still less than 3 years, I’ve recovered from bankruptcy! Making a nice income, owning a newly built home and enjoying the privileges that having credit brings. So you may be wondering: “Why would I tell you that I was once bankrupt?” The answer may surprise you. We’ll get to that in my next post.

In the meantime if you have a personal finance question feel free to send it me. Most times, I’ll send your answer straight away and it may be posted in my monthly column ‘Ask Yvon’ (pronounced ‘Yuh von’…I know it’s my parents fault), which you can find in print and also online at www.thetruthtoledo.com. I’ll also be posting articles, Q&A, and insights here as well.

For now just know that we’re going to travel the road to your financial stability together!

Keep getting personal with your finances-TM

Yvon

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