I haven’t wrote anything on here in a while and I don’t have a good reason. Been busy with the kids, buying and selling houses and coaching football this past year and decided to just let the blog rest. I do miss jotting down things I think about so perhaps I’ll write more in 2015. I’d sure like to get rid of that house in central corridor right about now. Dropped some mail Friday so hopefully the phone rings a lot this week. Me and Junior checked out the NFL Experience in downtown Phoenix today(Superbowl is here in Phoenix this year). He enjoyed the HUGE blow up football and looking inside the new GMC trucks more than anything. Didn’t catch the Pro Bowl but from the highlights it looks like it was entertaining! Stock market is still toying with new highs.. Gas is rediculously cheap. Housing seems okay.. Kind of quiet in Phoenix but very much a seller’s market in Portland. Will be interesting to see how far the stock market can inflate and if they can get loans flowing. Market could inflate if they do those 2 things.. Gold and silver have started to rise in the past month. I wonder if we saw the bottom in the mid teens or what will happen. Still mostly lower lows on a longer term chart..
By: Joshua Gayman
seriously ya’ll this has nothing to do with politics, only finance…
in response to all of the comments posted about how a gallon of gas was $1.81 or whatever when Obama took office: How about a gallon of gas hit $4.00 in 2007 when Bush(a Republican) was in office.
Economics lesson: when currency falls, commodities rise.
Thus, if you want to blame any one party or person for the price of oil rising, blame the central bankers ie: the Fed and the ECB(european central bank). They run BOTH parties anyways!!!
Until we think rationally TOGETHER(ie: both parties thinking of ways to work together to achieve a common goal of a higher quality of life for our nation and future generations), we are going to continue to get run over by the ultra rich and social elite.
Following the trends of the past 2 years, March saw a significant increase in the number of sales that closed compared to the prior month in Phoenix. Last month saw an increase of 22.1% over February. That followed a 12.6% increase in the prior month. The number remains impressively high in light of the continued shrinking inventory.
For buyers and investors in Phoenix, this means that competition for homes continues to be very high. We are seeing more and more situation where there are double-digit offers on a single home.
This means inventory remaining on the market, and continued competition for value-priced properties. We MUST continue to carefully work TOGETHER to understand the market AND to understand how we can compete with the market demand and other buyers right now.
We have been watching a statistic very carefully here in Phoenix to determine if the increase in average sales prices was just a blip or a trend. From all indications, we can now see a trend, and that we hit the bottom of the market in August. Since then, we have seen a 20.8% increase in the average sales price. March saw an 8.97% increase over the month of February. This is the highest price we have seen in Phoenix since June of 2010! The average sales price increased from $172,603 to $188,088.
New Phoenix home sale listings were up 7%, which is generally normal for March. However, it was still the 4th lowest month in the past 36 for new listings to come on the market.
If you have any questions about real estate investing in Phoenix or Arizona, please send me a quick message.
A city in the Cleveland, Ohio area has demolished 1,000 livable houses in the last year and plans to tear down another 20,000. Their thought is that with 20% of the homes in the town vacant, they are not making the neighbor’s values worth less, they’re making them worthless! Here’s my take..
The average person, if they even have a retirement account, have a 401k which is investing in mutual funds. Don’t be average. Take responsibility and have some control 🙂 – Josh
Get a Financial Education and Stop Thinking Like an Employee
Years ago I had a conversation with a young man about 401(k)s. “I have a question for you,” he said. “I’ve read that you say 401(k)s are the worst investments, but I don’t understand why you say that.”
“What is it that you don’t understand?” I asked.
“Well,” said the young man. “Most employers match your contribution. For instance, my employer matches up to four percent of my salary. Isn’t that a hundred percent return? Why is that a bad investment?”
“It’s a bad investment,” I said, “because it’s your money to begin with.”
He looked puzzled and perplexed.
“Listen,” I said, “if it weren’t for 401(k)s, your employer would have to pay you that money as part of your salary. As it is, they still pay it, but only if you give up four percent of your existing salary in to a retirement account where you have no control. And if you don’t, well the employer comes out ahead. It’s your money, but they’re in control.”
Thinking like an employee
The young man still didn’t look convinced, but I could tell he was thinking hard about it. The reason this young man and many others don’t understand my reasoning is that they only think like employees. As an employer, I know that if it weren’t for 401(k)s, I’d have to pay that money to employees in their salary in order to be competitive.
For me, as an employer, a 401(k) is an advantage because I don’t have to pay the money unless an employee opts in, and if they leave my company too early, I don’t have to pay because they aren’t vested.
A recent study confirms what I’m saying and should help those of you who still find this logic confusing or not convincing.
A 401(k) steals your money
A recent study confirms what I’m saying and should help those of you who still find this logic confusing or not convincing. According to Steven Gandel, a study issued by the Center for Retirement Research indicates that, “All else being equal…workers at companies that contributed to their employees’ 401(k) accounts tended to have lower salaries than those at companies that gave no retirement contribution…In fact, for many employees, the salary dip was roughly equal to the size of their employer’s potential contribution.”
Translation, companies that don’t offer 401(k)s must pay a higher salary to compete with companies that do. Those company’s employees simply get their money as part of their salary rather than having to match it and save it in a tax-deferred retirement plan where they have no control and have high fees.
No financial intelligence? Stick with the 401(k)
Control is an important aspect of investing. As I mentioned, with a 401(k), you have no control over your investments as you generally invest in funds and indexes controlled by brokers, who are controlled by bankers, who invest in companies that are controlled by boards — all of which you have no control over.
If you want to be rich, you must have a financial education and control over your money and your investments. This is why I like to invest in my own business, purchase real estate and create products. I have a lot of control over those investments. Generally a good matrix is the more control you have, the higher your potential return. The less control you have, the lower your potential return.
Of course, it takes high financial intelligence to invest in things where you have control because you have to make a lot of important decisions. This is why being forced into a 401(k) probably isn’t a bad thing for most people. This is because most people have little-to-no financial education and wouldn’t know what to do with the extra money other than save it or spend it.
But I expect the average Rich Dad reader to be head and shoulders above the average person in terms of financial intelligence. The reality is that if you’re investing in a 401(k), you’re not making a return on your employer’s match. You’re simply getting what is owed you by your employer.
For some, this might be the first time you’ve ever thought of this. For others, I’m probably preaching to the choir.
Some questions for the Rich Dad community
If you’ve avoided the 401(k) trap, what ways are you using that money to build your wealth outside of a 401(k)?
My answer: Change your facts
One of the most powerful ways to make the tax rules work for you is to change your facts. This concept applies in most developed countries because the tax law is written to favor specific facts.
Do you know someone who is always sharing the write-off of their most recent meal (trip, vehicle, cell phone, gadget, etc.)? Do you wonder if what they are doing is cheating or legal?
With the right set of facts, any of those items can be legal tax deductions.
That’s why when I meet with a new client, I want to know their facts first. Then, I can determine how to change their facts to reduce their tax.
– Do you own a business?
– Do you own investment real estate?
– Are you an employee?
– Are you self-employed?
– How much time do you spend in your business?
– How much time do you spend in your investing?
– What is your role in your business?
– What is your role in your investing?
– What investments do you have?
– What expenses do you pay personally?
– What expenses are paid by your business or investing activity?
What is deductible for one person may not be deductible for another person. This is because one person’s facts can support a particular deduction whereas another person’s may not.
I went over the specific rules with my client that covered what he needed to do in order to meet the requirements to deduct the travel in his business. I also shared with him how he could deduct the travel expenses for his spouse and children.
A few months later, my client tells me about a very profitable deal he now has in the state and he provided me with all of the documentation we discussed to support his deductions.
My client jumped in and changed his facts. It led to increasing his deductions, reducing his taxes and making more money! In order to meet the rules, he had to conduct legitimate business in the state. He did and he was very successful at it.
Should you receive the income personally or should your business receive the income?
Are your investments helping your tax situation or should you explore new investment strategies?
Are your expenses personal or do they meet the rules specific to your situation that make them deductible?
****This post is related to short sales. A short sale is a real estate transaction where a property is sold, but the liens on the property are negotiated so that they are released from the property for a “short” pay off.
Short Sales are not real estate 101. I would say they are a 300 or 400 level class when it comes to real estate. If you would like more information on short selling a property, buying a short sale property, or investing in short sale properties, go to my real estate website and get in contact with me.
I am new to ShortSaleSuperstars. I have used it as a reference a few times and known about the site for over 6 months, but just decided last week that I need to get involved more with internet blogging for my real estate business. Since I specialize in negotiatiing short sales, I thought it important that I join networks online that pertain to short sales. It looks like this is the best there is, so I am diving in 🙂 – I will do my best to comment on as many questions and forum posts as I can, and I would hope that people would reach out to me with their short sale issues. I love helping other agents get their deals approved, at great terms, and with full commissions. Lately, I have been getting 8% on most of my short sales. While most agents would probably tell you that this cannot be done, or isn’t legal, it simply requires some knowledge and information. Anyways, on to the topic of my first post….
While attending a short sale seminar in Las Vegas last week(shoutout to ShortSaleGenius and Trent Chapman), I observed that many agent’s/negotiator’s questions all sounded very similar:
“I have this weird short sale….”
“I know but the bank told me…..”
The solution to almost every single question is the same, ESCALATE! More specifically, get the RIGHT message to the RIGHT person at the bank.
It is always about the numbers. Getting the right message to the right person will mean you are going to very “high-up management.” When you get to this level at any bank, the mind-set of the person who are communicating with is solely about the numbers. They want to know what the value is and what is their net. If you have run the comps and you know that your value is in line, then you simply need to get the message to the right person, and explain to them that they will lose a lot more money if they foreclose on the property instead of accepting your short sale offer.
Remember, it’s not personal, and it’s not emotional. The bank wants as much money as they can, that is the name of the game. Your job as a Realtor/Negotiator is to make sure the numbers get communicated to someone at the bank who has the authority to make the right decision.