New York Stock Exchange (photo: flickr.com)

It has often been said that if you want to get good at something find someone who’s already doing it, and do what they do. If you can learn to think like they do, that’s even better. If your area of interest is investing and wealth building, there’s no better person to model after than Warren Buffet.

Warren Buffet is by far the most successful individual investor in the history of investing. So, how do you gain access to the man, his mind, and his method? You can find a number of good books online, but here are some highlights.

Think of investing as your job

Many people approach investing in stocks as a hobby or a scheme. But the key, according to Buffet, is to investing as seriously as if it were your main job. You wouldn’t take dangerous risks with your main source of income, so don’t do it when you invest, either.

Too many investors want to get in, get rich, and get out quickly.  This leads to mistakes and unnecessary gambles. Act as though you are the owner of a business or as though your investing decisions are your main source of income.  This will lead to longer-term and more profitable investments.

Concentrate on the best

With businesses falling off big board left and right, it’s tempting to spread your investments out against the perceived risk, using mutual funds to diversify and protect yourself from the losses of any one company.  According to Buffet, this can be a big mistake. His approach is to focus on the interaction between you and the companies you invest in.

If you have done your homework, you will have a gut feeling for the companies you are comfortable with and those you aren’t. Stick with the companies that are best for you rather than investing your dollars into companies that are your 10th, 20th, or 100th choices. You’ll be better off in the long run.  And by the way, Warren Buffet never invests in mutual funds.

Keep your eye on the prize

This bit of advice might seem contrary to doing your homework, but Buffet suggests never listening to market forecasts. What he’s talking about are generalized forecasts that make sweeping predictions about the overall stock-market.  These generic forecasts tend to be useless. Choose the particular targets that are right for you. When the time and price are right for you, strike no matter what the forecasters are saying.

The bottom line is drawn by you

The pattern for success is easy to follow. Find someone who is doing what you want to do and then learn to act and think like they do. You need to have confidence in yourself to take your investment activities seriously. You have to concentrate on what you think are the right targets for you. Finally, trusting your own hard work and research, you have to strike when you think the time is right. Only you can establish the bottom line for your success. But when in doubt, it’s still okay to ask yourself this question: “What would Warren Buffet do?”

Image from Flickr.

These days, it seems as if you can hardly turn on the TV or radio without hearing news of the current economic recession and its impact on our nation’s retirement savings accounts. And it’s true – many people’s 401K, 403(b) and IRA accounts have lost significant value as a result of declining stock values and the current credit crunch. However, don’t let these numbers scare you away from contributing to these important investment tools. Stock prices are currently at all-time lows – making it a great time to bulk up your retirement portfolio.

Getting Started

For most regular, full-time employees, getting started with a 401K or 403(b) account (the 401K equivalent for public sector workers) is as simple as filling out a few forms. Check with your company’s HR officer to learn more about 401K enrollment requirements, which may include specific enrollment periods or a certain length of employment before you can begin investing. In addition, see if your company matches any portion of your contributions and at what level. If they do, try to contribute as much as necessary to earn the full match – otherwise, you’re throwing away free money!

Basic Allocation Decisions

Most retirement accounts allow you to make your own investment choices from their selected list of stocks, bonds and funds. If you do choose to allocate your 401K funds on your own from this list, you’ll need to make a few basic decisions:

Stocks versus Bonds. One of the biggest decisions you’ll need to make when it comes to allocating your retirement funds is the percentage you invest in stocks versus bonds. Stocks are riskier investment vehicles than bonds, which tend to offer steadier – if smaller – rates of return. Of course, the proper investment ratio for you will change throughout your lifetime. For example, as you get older – and closer to relying on your retirement funds as a source of income – you’ll want to minimize your exposure to risk by investing more heavily in bonds.

Domestic versus International. Another important decision you’ll need to take into account is whether to invest in domestic (US-based) stocks only or to diversify with international funds as well. In general, international stocks and funds are riskier options, although growing economies around the world may offer a higher potential for financial gain. Most investment experts recommend at least a little exposure to growing markets through international stocks; however, you’ll need to take your personal tolerance for risk into consideration.

Take the Easy Way Out with Target Date Funds

Don’t worry if choosing your 401K fund allocations sounds like too much. More and more retirement savings account providers are offering “Target Date” funds, which automatically adjust the proportion of your money in stocks versus bonds as you near your target retirement date. These funds are typically named for their target retirement year – for example, “The Target 2030 Fund” – and are managed by account executives at the 401K provider. If you’re feeling overwhelmed, they’re a great “hands-free” way to ensure your retirement investment plans stay on track.

(Photo: donkelphant.com)

Ask any investor what the last thing Wall Street needs is these days. There will be some variety in the answers you receive, but most anyone will agree that a stock market crash (always a bad thing) would be horrible right now. Particularly since America is barely beginning to claw its way back up out of the recession.

What could cause a stock market crash? There are a number of complicated ways to answer that, but for the purposes of this article, let’s examine something called flash trading, which the SEC is seriously considering banning. Not just because it gives certain high-powered investors a possible advantage, but because the same technology that makes flash trading (also known as high frequency trading) possible could create a feedback loop that grinds the market to a halt. At that point, payday loans and no fax payday loans won’t be enough to put Humpty Dumpty back together again.

We don’t need more shenanigans

Sarah Lynch reports for The Wall Street Journal that the Securities and Exchange Commission is considering stopping the flash trading practice that critics claim “gives an unfair advantage to some traders by giving them an early look at buy and sell orders.”

How does this happen? Well, apparently flash trading gives people with the technology a glimpse at stock trades before they reach exchanges for filing. From a technological standpoint, it is collocation of the servers flash traders use that makes the whole process much faster. They can avoid the data latency that other traders would encounter. In a nutshell, this technology gives flash traders a window in which to act that other traders simply don’t have, and while it’s currently legal, the SEC would perhaps like to change that. For more detailed info on this practice, check out this article at Wall Street and Tech.

Cut it out, right now

SEC Chair Mary Schapiro has decreed that SEC staff “explore an approach that can be quickly implemented to eliminate the inequity that results from flash orders.” The majority of U.S. stock exchanges have said they would not object to curbing the flash trading practice.

“We salute the SEC for moving forward with this ban that will restore integrity to the markets. The agency is absolutely making the right call by stepping up and ending this unfair practice,” Sen. Charles Schumer said. “It is also important to make sure flash orders aren’t just the tip of an iceberg lurking in the dark reaches of the market.”

“The dark reaches?”

Yes, I did say that there’s more to this than just giving some investors an unfair advantage with flash trading. Joe Weisenthal of BusinessInsider.com writes that

Of course, there are a lot of folks who rail against financial innovation and they have what seems like a good reason: it can cause epic blowups. We’re still not convinced that this last crisis was actually caused by innovations, but it’s an acceptable argument, and in the world of HFT (high-frequency trading), we could imagine, possibly, some computer going buck wild and screwing up the whole market, creating some crash-making feedback loop.

That would be a bad. Very bad.

Here’s hoping that the SEC gets this off the boards quickly. If flash trading and other HFT elements present the risk Weisenthal suggests, America hasn’t got time for the pain. Not anymore. We’re recovering. We use payday loans and no fax payday loans on occasion when needed, but we don’t want to have to face the complete collapse we feared would come from our current recession.

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Installment loans are aiding first-time home buyers make the purchase of their dreams. When moving to Phoenix, Arizona, Kostas Kalaitzidis longed for a home. Due to his low-income and the high-cost market, he was unable to buy. Just one year later, he was able to buy a formerly-priced $220,000 house for just $82,000. “I’m very glad I waited,” he says, “people like me are the ones buying now.”

Declining home values

It is estimated that 53% of all home sales are being made by people like Kalaitzidis, according to the National Association of Realtors. The group also says, “While America’s declining home values have wrought havoc on home sellers, owners and lenders, first-time buyers can celebrate the housing market bust, and may even help fix it.” They expect first-time buyers to comprise the bulk of buyers throughout the rest of 2009.

Although salary is a factor, most first-time buyers are making the move as a result of the huge decrease in home prices. For example, Kalaitzidis’ home boasts 2,200 square feet, four bedrooms and 2 ½ baths. At $82,000, it’s a relative steal in the real estate market. In addition, tax credits are plentiful for first-time buyers.

According to James Saccaccio, CEO of RealtyTrac, “The metro areas with the highest level of foreclosure activity paint a picture of concentrated problems in a relatively small number of hard-hit areas. Sales activity appears to be increasing in some of these markets as home prices have fallen to levels that are attractive to first-time homebuyers.”

New buyers are plentiful

Kalaitzidis is not alone. Many first time buyers are seeing homeownership as a potential accomplishment they could not have attained without the struggling market. Albert Ko of Orange County, California first moved to the area in 2007 when the average price of a moderate home was $800,000. He just was approved for $400,000 and most homes in the area have dropped to just about that level. “Two years ago, this would have been out of the question,” Ko confirms.

Though current homeowners are suffering the lost equity, new potential buyers are seeing affordable housing as a huge benefit. With the dream of owning a home as a viable option, they are looking to installment loans, family borrowing and extreme budgeting as methods of reaching their goals. For the first time, many potential borrowers are taking advantage of the recession and downfall of the housing market.

Burns Consulting Group study

According to Burns’ Consulting Group the average home costs 25% of the owner’s pretax income to sustain, down from 44% just three years ago. That means that a household with a $60,000 income is now spending about $15,000 a year for the fixed-rate mortgage, down from $26,400. That’s a substantial savings for a family.

Finally a homeowner

There is a light at the end of the recession. Many people who were formerly unable to even consider purchasing their own home are now enjoying the affordability brought about by the recession. Home values are down and down payments needed to purchase are much smaller. Some potential homeowners are working with lenders for installment loans to help fund their purchases as they move into the most-coveted title of “homeowner.”

It could be that while we were busy squandering wealth on all sorts of luxuries we didn’t need and on defense systems that we will never use and borrowing too much money, we actually unknowingly created a super strong economy with a built-in antivirus?

The last couple of weeks

Look at the stock exchange figures for the past couple of weeks – a recovery is under way. Perhaps I’m being naïve because I don’t really understand what’s going on but my own little portfolio is showing signs of getting out of bed.

A couple of years ago I took a Payday Loan and went on a trip to Canada. There I visited an old friend. His wife was very ill and he would not leave her side. I asked him how he passed the time stuck at home 24/7 and he said that he played the stock market. He led me into his study which consisted of a long desk and a row of computer screens all flashing with activity.

His profitable pastime

He sat in a chair with castors and zoomed up and down along the screens buying and selling shares. I asked where he got his information from and he gave me the name of one of the share advisory services. He said that they were very accurate and that he followed their advice as long as his budget permitted. I guess then that he was playing with hundreds of thousands of dollars. “I’m doing excellently, thanks. These advisors are great and the exchange keeps going up and everything’s fine. Except my poor wife, who dies a little every day.”

I try it.

I came home enthusiastic at the prospect of making some money. I joined his share advisory service, signed up with a broker, opened an account and started trading, following advice that rolled in every day from the service. My total portfolio was $6,000 and I promised myself that I would not put another penny into it. I have to say that it worked well. It wasn’t as dramatic as I had thought but it was a steady climb to $7,000 in the space of 12 months. Not bad, right?

Melt-down

Then came the melt-down. Because I didn’t understand sub-prime mortgages and didn’t heed the warnings and because my share advisory service kept telling me what to buy and what to sell, I sat and watched my $7,000 dwindle day by day until it hit about $2,500. I felt sick, stopped watching it and wrote it off as an expensive lesson. One day I saw that shares in the Ford Auto company were down to just $1.50. I bought a hundred with cash in the account and sold them at $2.50 and made a $100. They dropped again and I repeated the procedure making another $100. Doing this with a couple of cheap shares I got my portfolio up to $3,000.

My annual subscription to the share advisory service ran out and I never renewed it and amazingly enough they didn’t even pester me. I guess they understood that their system doesn’t work on a falling market. I got rid of some of their recommendations and bought according to whispers on the internet.

Recovery?

Last night my portfolio stood at $5,300 and I am excited. This just shows how conditioned we can become to present conditions. I have to continually remind myself that I am losing the money-making war even though I win a daily battle here and there.

Loss of jobs, depleted retirement accounts and the continuing uncertainty of the market and economy has many people scrambling to make their payments and pay their bills each month. More and more people have defaulted on their loans or had to foreclose on their homes because they are not able to make the payments.

Why so many foreclosures?

You may know someone who has had to foreclose on their home or you may have seen an increase in foreclosed properties in the market and may be wondering why all of these properties are being taken back by the lenders. Most experts would say that the most reasonable cause for the increased amount of foreclosures on the market today is because of a large leap in home mortgages and loans a few years ago. There was a big boom in the housing market a few years ago in most areas and this caused many new home buyers and people who had never owned a home to get approved for mortgages and home loans. The problem with this came into play when lenders were approving people for more money than they could afford and the new homeowners were not able to keep up with their payments.

The lower interest rates that were available to new home buyers and in general for the housing market caused a great increase in the interest of lenders to loan huge amounts of money to people who were not necessarily qualified. These people thought that they were getting a great deal on getting into a home and were not fully aware of all of the costs that were going to be incurred after the home was purchased. This caused a lot of people to be forced to turn their homes over to the lenders and created the increase of foreclosed properties on the market.

Staying Ahead of the Downsides of the Market

As consumers, there is little that we can do to change what the stock market brings us each day, or what the government steps in to do to offer stimulus packages and bailouts to bring us relief, but the best thing to do is stay afloat and keep up to date with your debt. Once you begin to fall behind in your payments, it can be very hard to catch back up and that can continue to cause financial hardships for you.

Finding Unsecured Personal Loans a Popular Trend

Unsecured personal loans can be a fast and easy way to ensure you can make your payments. Many people have found that even if they are not able to obtain other forms of loans without having security as collateral, they are able to obtain a payday loan or other short-term loan and relieve some of the financial worries that they have. One common piece of advice that experts offer is when consumers apply for payday loans or other types of unsecured loans, they should always make sure that they know what the fees and charges are associated with obtaining the loan so that they are not overwhelmed when they need to repay the money to the lenders.

Who ever thought of taking a trip to see Iceland? But all of a sudden the Icelandic currency has plunged in value in the wake of some naughty goings on in the banks, and is much cheaper for tourists. Iceland used to be prohibitively expensive to visit but is now playing host to visitors who are flocking in to see the dramatic volcanic scenery.

Currency in Iceland

Look what’s happened to the currency in Iceland: “Last year you got 60 kronur for one dollar, today you get 105 kronur,” says Will Delaney, a 22-year-old Canadian student who, like thousands of others, has taken advantage of the current exchange rate to see Iceland. Last year about half a million people visited the island outnumbering the 320,000 residents.

At that rate of exchange, I could get there without taking a Payday Loan or any other kind of loan.

The banks

The value of the Icelandic currency plummeted by 44 percent in 2008. The drop was not negative for the tourism industry. Before the crisis, Iceland had become a very expensive destination. It is much more affordable now. Delaney says that it is feasible to visit Iceland for just a couple of hundred dollars, something unimaginable a year ago before the crisis hit. “I’m staying for two weeks, both working and travelling. I am into renewable energy. Iceland is a very good model to study with the geothermal power, and I can travel outside Reykjavik to explore the fantastic landscapes.”

The attractions

Iceland boasts breathtaking scenery which includes the Blue Lagoon hot springs, spouting geysers and plunging waterfalls as well as the Thingvellir national park, a UNESCO world heritage site. Then there are the must-sees, the glaciers and volcanoes.

The national carrier, Icelandair, is advertising in newspapers everywhere and there are promotions on the Internet. The tourism sector, which employs around 8,200 people, has pulled out all the stops to avoid collapse after the country’s financial sector crashed late last year.

The bailout and recovery

There are signs now that the country’s economy is beginning to recover thanks to the massive international bailout. The number of US visitors fell by 22 per cent last year, but they have started coming back. The industry is also focusing its efforts on attracting Europeans to Iceland. Britons represent the biggest group of tourists, with around 70,000 visitors in 2008, ahead of Germans with 45,100 and Danes with 41,000.

I’m interested

I’m always on the lookout for places to visit that involve short flights. Once you’ve flown to Australia you’re cured of those long flights with the interminable sitting locked down in a tiny seat and nowhere to go even if you can get out. Now that the Icelandic kronur is low, one can probably get pretty good value. The price of hotel rooms and food is at rock bottom.

In addition, I’m sure there’s a lot to see and one will see sights that one can never see anywhere else in the world. And imagine the look on our friends faces when I tell them where we’re going!

Payday loans may help consumers solve temporary money problems in a volatile market. The current recession is quickly being assessed as a long-term situation that consumers and businesses will have to maneuver through carefully. A quick-fix is not realistic. Though there are a lot of options available, it’s estimated that until mid-2010 consumers won’t see a true stabilization of the market or experience any relief. Americans’ buying patterns and businesses’ income statements are giving a clear picture of the dilemma the economy is in.

What are buying patterns telling America?

According to the Federal Reserve, consumers’ spending makes up two-thirds of the U.S. economic activity. Unfortunately for the country’s financial situation, those consumers are being more frugal than they have in years. Three giants of consumerism, Wal-Mart, Burger King and Capital One Financial, all reported a declining profit in March. While they don’t make up the entire American business world, they are a good cross-section of the economy and their income statements can give an accurate picture of the market.

Burger King reported an 18% drop in shares in March and has noted a great lull in business, according to analysts. Americans are opting to buy in bulk at discount grocery stores and cook at home, rather than splurge on fast-food. They realize that cutting corners means stretching budgets and fast-food is no longer a viable option.

In March, retailers reported a 1.1% decline in sales. Wal-Mart CEO Mike Duke confirms that after payday, most Americans are left with very little discretionary money. The store’s sales will be up at the beginning of the week but when Friday comes, buyers are looking for payday loans and cash advances to make ends meet. A few more tell-tale signs of the economy can be seen with consistent buying patterns. Vitamins and diapers for example, are purchased in bulk at the beginning of the month and trickle down to smaller sales at the end. This is an indication of how people are portioning finances in the recession.

What does credit card activity tell Americans?

According to Capital One, their charge-off rate, which is made up of accounts that the company categorizes as non-recoupable, is steadily increasing for U.S. credit card holders. The same thing is happening with American Express. Their charge off rates have grown from 8.6% in February to 8.8% in March. It’s estimated that the soaring unemployment rate is making it next to impossible for consumers to maintain themselves, much less pay off debt. Economists speculate that mid-2010 is the anticipated timeframe when the economy will begin to recover and consumers will be able to manage their finances again. Until that time, Americans have to be frugal and budget-conscious every time they go to the store and leave only with the necessities.

How can you save yourself?

Payday loans can help to level income throughout the month. Consumers are spending more at the beginning of the month and trying to stretch what is left over at the end. This isn’t always possible when emergencies happen, i.e. cars break down, children get sick and water heaters break. Any number of things can happen to a household and put them in need of extra money until the next payday. One good option to have is the payday loan where the application process is simple. If you are approved, the funds are in your pocket within 48 hours and the money is deducted from your account on the next payday. You can save yourself the worry of how to pay bills by looking into cash advance options.

I grew up in a stock exchange oriented house. The family owned a large furniture business and they floated a company on the exchange. I don’t remember much of those days but there were always uncles and older cousins in deep discussions about the ‘market.’ I think I thought they were into vegetables. One day grandfather patiently explained what it was all about. The part of his talk I remember to this day was when he said “I will never disappoint my shareholders. As soon as the shares drop below their issue price, I buy them to keep the price up.” That made sense to me and opened all sorts of possibilities.

I was in business

I found a friend whose father was a broker and allowed his son to ‘dabble’ and I was in business. Whenever I saw the price dip below the datum level, I would hastily borrow all the money I could lay my hands on – Payday Loans and Personal Loans weren’t in business in those days – and buy shares through my friend. I had to pay him off, of course, but as soon as grandfather moved in to correct things, I made enough money for everyone.

Things change

Then grandfather departed and things changed. But I was hooked on the exchange and started reading the papers and looking for clues and tips. I also started looking at things around me and thinking that they influenced the market. For instance I counted the number of cars passing through an intersection on one light change: if the number exceeded 100, it means that the auto industry was up – buy GM or Ford. If there were many skips and cranes in town it meant the building industry was up and I bought shares in the construction sector.

More pointers

If the stores in the mall were full of women buying clothes, then I bought clothing shares; no shoppers, sell the shares. There is a quite well-known indicator – the ‘lipstick indicator.’ This is a theory that says that even when feeling gloomy or economizing on the big-budget spending, it’s still possible to get a little psychological lift at a modest price by buying a tube of lipstick. It is the net effect of replacing big indulgences with small luxuries is an overall contraction in total spending, i.e. the lipstick indicator is predicting a recession. Lipstick sales reportedly soared following the attack on the World Trade Centre.

Does my system work?

When I am playing on a rising market, it works, as does every other system. On a falling market it fails and I lose. But I have a lot of fun. I’ll stand at an intersection counting the cars like a farmer counting his sheep going through a gate, rush home, get into the broker’s website and give the instruction with a great sense of urgency as though I have been tipped off by the ‘Master of the Market’ himself. An hour later when I see the stock going in the other direction I will curse myself for being stupid and acting like a child.

It’s not all like that. Sometimes I will sit clapping my hands for being a stock market guru able to predict anything, as I watch the stock going exactly where I thought it would go.

All in all it’s a bit of harmless fun, the amounts are small and it’s probably a lot safer that gambling online.

While unsecured personal loans have been around for a while, there are other options investment firms are trying to bring to the economy. Wall Street has plans to save the market, invigorate the economy and quell peoples’ fears of investing. But are they realistically able to reach the novice investor or help his financial situation? A lot of their solutions play on people’s need for security and impulsive nature, rather than truly create ways for everyday people to pay off their soaring bills.

Wall Street and the common man

Chief Investment officer of GenSpring Offices, Andrew Mehalko said, “When people are fearful, Wall Street comes out with products that try to make them feel good by promising safety.” He states that this year ‘principal-protected notes’ are expected to be hot-selling investments. The big promise is that they protect your initial investment and may produce an increase in value. Taking a closer look at these notes however, brings to light their true nature. Sure they will return your investment, but they also have hefty fees that can cut into a large part of the ROI you may have gained. Remember the old rule of thumb when investing: low-risk, means low returns. Though the promised security of principle-protected notes can be attractive, they probably won’t give you the investment value you are looking for. If your purpose was for them to grow your money so you can pay off more bills, you may be sadly disappointed.

Typical reactions to the local news

A lot of casual investors are obsessed with the latest financial news. It’s good to be informed, but focusing on every change in the market can be detrimental. Trying to navigate every up and down the economy brings can be tiring and can cause you to lose money. We have a volatile stock market, a fluctuating bond market and a recession to deal with. Keeping up with all three can prove a harrowing experience for even the most seasoned investor, much less the novice. If you’re trying to respond to immediate changes, you may be left with an investment, less huge deductions in trading expenses. Do yourself a favor and stop watching TV and reading newspapers in an effort to find a way to pay your bills.

How do you pay bills in this economy?

An unsecured personal loan may be the most reasonable way to go. Let’s say that you took a pay decrease at work. Though you’re bringing in less money, your bills are the same. What should you do? Or, let’s say that your car breaks down and you need to find the cash to pay for it immediately? More and more people are looking to personal cash loans, rather than trying to play the market, to meet their financial needs. Although Wall Street is trying everything they can to help consumers, many of their solutions are one-sided and force the investor to use any money they would have earned, on fees. It’s a better option to look for loans that have reasonable interest rates, clear-cut rules and can still adequately pay off your bills.

Will the economy revive?

Although the economy is in a recession, it will revive but not without a lot of restructuring and rethinking investment processes. A lot of people relied on Wall Street for their investments, and this is proving to be a trap in today’s market. Wall Street has its own agenda that isn’t necessarily looking out for individuals who need to pay their bills. To truly meet your financial needs and stay at an advantage, an unsecured personal loan can be a much more reliable solution.

Per the Greater Las Vegas Association of Realtors, home sales in the sin city area increased by 30% in March. Sources indicate a large number of sales were to investors who are buying two to three homes at a time. One investor, Arthur Wong, indicated that the current buyers are looking to hold long-term, unlike the speculators who inflated the market in the first place. February, 2009 home sales in Las Vegas were 80% higher than in 2008. Some landlords are even researching foreclosure rolls to find potential renters to ensure their new investments will produce cash flow, per Camden Property Trust.

Ominous Signs Despite Increased Investor Interest

Despite the increase in sales, prices are declining. The Association of Realtors announced that the median price in March, 2008 was $149,000, down 39% from the year before. The Nevada state legislature recently introduced a measure known as AB I39 which would improve accessibility to low income housing. A similar measure was defeated in 2007 as too costly, but the current measure would be funded from an affordable housing trust fund and not general revenues. In addition to the perceived need for government stimulus or cash advance loans to the housing market, personal bankruptcy filings in Nevada went from 10,632 in 2007 to 18,211 in 2008. This indicates fewer individuals will be able to qualify for home loans. The mixed use CityCenter Las Vegas complex, a $9.1 billion project including both condominium and retail space, is now in jeopardy as Dubai World filed suit against its principal partner in the development, MGM Mirage, last month. MGM recently obtained a $70 million reprieve from creditors which may ease financial strains on the project. However, if completed, the condominium units would add supply to the strained residential market. The potential for further cheap condominium supply weighing on the market is indicated by the sale offering for the mortgage on Vantage Lofts. George Smith Partners recently indicated it is willing to sell the Note at a discount as the developer is in bankruptcy.

Merger Increases Cost Effectiveness

The recently announced acquisition of Centex Homes by Pulte Homes in a stock swap merger may improve the economics of this market somewhat. The cost savings from eliminating redundant back office staff would allow the combined company to be more price competitive in a market where new home sales have declined steadily for four years. It is not clear however, whether resulting lower new home prices and increased investor interest in single family homes will create sufficient demand to stem this decline.

Foreclosures Continue to Loom

One negative factor for the Las Vegas housing market is the potential for large numbers of foreclosed homes to be placed on the market. Distressed residential loans increased to $455 million at December 31, 2008 from $83 million at December 31, 2007. In addition to creating additional supply, the high level of delinquent loans could make banks less willing to lend in the Vegas market, making credit less accessible to potential buyers.

Caution Remains Prudent

Despite the increase in the number of units being sold, the likelihood of significant additional supply of residential housing units and the continuing price declines for these units suggest that the Las Vegas market has not hit bottom. A cautious approach would appear justified for anyone considering purchasing a home in the area at this time.

We all know that money is the root of all evil. In our everyday speech money is unclean:

• It is known as filthy lucre,
• If you have too much of it you are stinking rich
• If you have too little you are dirt poor.

We don’t talk about money openly and we treat it like a vulgar subject. We routinely ask strangers what they do for a living, but would never dream of asking how much they earn. And that even applies to family and close friends.

In the same way I never discuss my Payday Loan activities with anyone else, except my wife.

It’s not always like that

Not all cultures feel the same about money. I have often been asked how much I earn, but never in the U.S. When I tell people that I write about money, it evokes little interest and they don’t pursue the conversation. I wonder if it would be the same if I said I was a sports or travel or food writer.

But now there’s a change

It seems that the recession is bringing the subject of money out into the open and making us love the stuff more than we did before. Most of us now believe that money is now more important than it was prior to the recession. This thinking is also reducing how we value possessions.

Money is a great tool and also a measure of value and a form of exchange. It buys food and clothes for us and our families; it keeps a roof over our head, pays our tax bills and if we’re lucky, buys a few treats as well. It is notoriously hard to earn and unbelievably easy to spend.

A lesson from recession

Along comes a recession and changes our attitudes towards money. It teaches us to look after it, show affection towards it, how to use it wisely, and surprisingly more generously.

Research is also showing that people are keeping up their charitable contributions and helping their family more in these difficult times. It is a fact that charitable donations in the U.S. doubled after the 1930s Great Depression because people had seen the trauma of poverty at first hand.

More money lessons

The credit crunch is teaching us to stay out of debt and to stop wasting and abusing money. More, it is teaching us that saving money is good, and borrowing too much is dangerous.

We will always feel funny about money but until somebody develops an entirely different social structure, or we return to a beads and barter system, we just have to learn to live with money.

We ought to learn to love it, not because it’s money but for what it can do for us, our loved ones, and society, if used properly. After this recession is over, or while we are still in the depths of this recession, we should evolve new money systems and start treating it more seriously. Most of all, we need to learn how to respect it.

By now, we all know that the housing bubble in America has burst. Refinancing isn’t as valuable a move as it once was, so many families look to payday loans for short-term aid. The housing collapse is catastrophic for all the homeowners who have lost tremendous value, but a boon to home buyers looking for a beautiful home and significantly decreased cost.

Paul Vercammen and Ted Rowlands report for CNN that Lake Elsinore, California is turning out to be a great place to buy.

Large, affordable homes

The reporters give the account of the Lepley family, who just moved into a 3,000-square-foot home in January 2009. They purchased the previously owned home for around $250,000. However, the shock comes when you learn that only two years ago, when California’s housing boom was on, the very same house sold for $550,000.

“My heart goes out to everybody that lost their home [and] lost their jobs,” says Derrick Lepley. “I’m real sympathetic toward them. But the reality for us was, if this didn’t happen, we wouldn’t be in this situation. We feel fortunate.”

Many others are taking advantage

A recent private report has shown that housing prices in 20 major cities have fallen to record lows, on average 19 percent lower than the previous year. Since the peak period of Q2 2006, prices have plunged 29.1 percent nationally, according to the S&P Case-Shiller Home Price Index.

Lake Elsinore is in Riverside County, California. The county one of the hardest hit in America’s foreclosure debacle. The scenic community is 70 miles southeast of Los Angeles. Currently, nearly 23,000 homes in Riverside County alone are listed as “bank owned.” One in 80 is now in foreclosure, according to the county assessor’s office.

The other side of happiness

Neighbors to the Lepley family are Frank and Leslie Aceves and their two kids. Their situation is the exact opposite, as they’re fighting to “short sell” their home so that they can avoid foreclosure and repossession. They bought their 3,500-square-foot home for $620,000 only a few years previous. A home across the street of similar size just sold for $267,000.

“We just didn’t think it would happen,” Leslie Aceves said. “We just thought it would stop somewhere.”

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(This concludes my look at what the FASB has done. CLICK HERE if you missed the opening)…

The FASB is also going to allow companies to list impaired assets like mortgage securities in their books as “other comprehensive income.” This improves operating income by allowing companies to report smaller loss amounts on their financials. So long as the company discloses quarterly their justification for listing assets in this category, it will be considered appropriate.

Columbia Business School Accounting Professor Robert Willens sees this new provision upping companies’ earning statements by 20 percent on average. Yet large banks like Citigroup Inc. would sop up much of this revaluation profits because they are carrying much many more toxic assets than smaller banks.

And bankers want even more

Bankers are also lobbying for the FASB and the SEC to receive retroactive compensation for their impaired illiquid assets. House Financial Services Committee Chairman Barney Frank told the American Bankers Association he will present their proposal to the SEC and Congress. However, Willens finds the idea very unusual.

“FASB doesn’t traditionally do that, but Frank’s pressure could make it happen,” he said.

What does this mean to taxpayers?

The prognosis isn’t good. Looking at the responses to the article, “JoeHunt” provides a good yardstick:

Honestly, how can anyone believe this rubbish? Show me a strong, dependable cash flow and I’ll show you a market and investors willing to pay market value for the discounted cash flow. In this market especially, I’d dump my entire portfolio into something with a dependable cash flow. WAKE UP folks, the problem is these future cash flows are “pie in the sky” or the actual dependable cash flow is way under book value, so the assets do not exist at these prices and that’s why there’s an illiquid market, the lapse of mark to market is an utter robbery.

Sounds to me like more short-term tricks to create illusory short-term gains. I agree with JoeHunt. If there is cash flow, why is the asset toxic? Can somebody out there explain this in layman’s terms, or is this I lie like I think it is?

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Banks saddled with toxic assets have cried to the government for relief. They’ve received a cash advance of taxpayer money, and now they’ve been given yet another gift.

Ronald Orol reports for MarketWatch that the Financial Accounting Standards Board (FASB) voted unanimously to “give auditors more flexibility in valuing toxic mortgage assets that may have long-term value.” This is expected to boost bank operating profits for Q1 2009. It also alters mark-to-market rules, where banks and corporations assign a value to assets like mortgages, securities, credit-card debt and student-loan investments. The values assigned are based on the current market price for that asset.

Banks are chomping at the bit for this

The FASB’s decision comes none too soon in the mind of bankers, who have complained that they have assets that can’t be sold because there is no active market for them. Banks and their auditors will now be allowed to use “significant judgment” when valuing toxic asset. What does this mean? If companies have assets with strong cash flows that can be estimated, then those cash flows would be the basis for estimating appropriate value in the corresponding toxic (illiquid) market.

FASB Chairman Robert Herz has said that “auditors will need to make a greater effort to judge whether something is distressed or not. The majority supported what we were doing. There no longer will be the presumption that these assets are being sold in a distressed sale.”

CLICK HERE to see what else the banks are asking for…

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The ad in the title of this article keeps popping up on my screen; so much so that I eventually clicked on it to see what was going on. It’s not difficult to understand, even for me, a non-money man if there was ever one. These people are selling software that I guess you install on your computer and which allows you to start wheeling and dealing in Foreign Exchange, about which you know nothing. I was duly impressed and when I tried to close it, a notice informed me that a live person was waiting to speak to me and I should think twice before exiting. I was even more impressed, but passed on the offer.

Double your money every month

According to this ad, if I invest say $100, this Foreign Exchange Robot, to give it its full name, will play with my money and bring me back $200 at the and of the month. I will then give him that same $200 and he will return $400 to me. According to my first grade arithmetic, I will have $409,600 after 12 months. That stopped me in mid-keystroke. One more month and I will have a million bucks! I will be a millionaire. Millionaires don’t work do they? No more Payday Loans, no more Cash Advances, life will be just me and my bank account.

Is it okay if I ask a question?

Even if I am only investing $100 in this scheme, I would like to ask some questions. Actually, I only have one question: have you guys got this software up and running on your computers at home? If so, how come you are still working? Or is it that you want everyone in the world to make half a million in the first year? Have you guys set up a marketing operation in Africa or India or China – you’d find a lot of investors there.

I happen to know a currency dealer. The guy is a bleary-eyed shuffling character who falls asleep at a pause in the conversation. I once asked him if he was feeling okay and he replied, “I work all night, every night. I sit in front of my computer without a break – there is currency activity in some country or another 24 hours a day. My health is shot, my nerves are in tatters and I drink a bottle of scotch every night. You didn’t ask but the answer is yes, I make a lot of money.” He then passed out. This new foreign currency trading deal sounds a lot better.

The robot does the work

The software that is being advertised employs a robot. All you have to do, is put up your money – they suggest you start with play-play money in case something goes wrong – hit the start button, fill your glass with scotch, lean back and listen to your personal cash register bells ringing as the money pours in.

Here I come!

The bottom end of this long ad reads, “If you want to take advantage of this ONCE IN A LIFETIME Opportunity at the special launch price of USD $149 (you will NEVER be billed again and you will enjoy ALL the benefits of (FAP Turbo) as a lifetime member) I suggest you act fast before we raise the price.”

Anyone want to join me?

Don’t laugh at Warren Buffett because he made one or two errors. He’s still one of the richest men in the world. So he made some dumb investments in 2008. Didn’t you? Do you think he’s lost it? Think again!

Why go after Buffett?

It’s time to leave him alone. People everywhere are criticizing the guy. Much of the criticism relates to the put options Buffett wrote against four major stock indices, betting that in 15-20 years, stock markets will go up.

People have accused Buffett of hypocrisy for using derivatives, which he has called “financial weapons of mass destruction.” The main types of derivatives are forwards, futures, options, and swaps. What’s more, they think it’s a bad bet.

Let’s put it this way. Even a Quick Payday Loan won’t buy me one single Class B share in Mr. Buffett’s company. They are standing at $2,879.00 each as I write this.

Buffett is working

Warren Buffett gets up every morning and goes to work, just like any other person. He runs a company called Berkshire Hathaway. For the past 40 years this company has compounded its book value by 20% annually, with only two years in which book value declined. It has $24 billion in cash. Are you still laughing?

The thing is, Buffett is no slouch. He’s a very thoughtful guy, far more thoughtful than most of his critics. Maybe they’re harassing Buffett simply to get press, but if so, they should reconsider. Those who are inadequately equipped shouldn’t become flashers.

Buffett is one of the world’s most successful investors. He was ranked by Forbes as the richest person in the world during the first half of 2008, with an estimated net worth of $62 billion, plummeting to $37 billion in early 2009, causing him to slide from #1 to #2 in the Forbes Billionaire List behind Bill Gates, after losing $9 billion more than Gates.

In 1999, Buffett was named the top money manager of the twentieth century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton. In 2007, he was listed among Time’s 100 Most Influential People in the world.

How you should treat Warren Buffett

Treat him as I do – with the utmost respect. I have a picture of him on the wall of my study. I follow everything he says. I watch to see what he buys, but unfortunately I cannot buy the same but here and there I managed a small purchase.

Besides being a great investor and the Money Man of all time, Buffett has some great human qualities. He is modest, so modest in fact that he lives in the same house that he lived in before he made his millions. He is also is a notable philanthropist, having pledged to give away 85% of his fortune, whatever it will be at the time.

The bottom line

So Buffett’s timing was poor once or twice in the past year. So was mine and so was all of ours. We were all in unknown territory. If today someone offers you a deal that will make you billions, it would be a bad strategy to hold out, hoping that they’ll come back tomorrow with a deal that will make you trillions. Buffett didn’t hesitate; he took what he could get when he could get it. I just sat here, turned to stone. How about you?

Will we ever learn from our mistakes? Probably not. The stock exchanges went from a high-point in June 2007 to a low in March 2009, dropping about 50 percent in under 20 months.

2006 and 2007 Celebrations

We should have seen it coming, but most of us didn’t. In fact, most investors were too busy rejoicing, celebrating their Market wins in 2006 and 2007 to look around and see if they were about to careen off the cliff. We were taking and repaying Cash Advance Loans at a high rate of knots. All was well with the world.

It’s called overconfidence – the belief that you’re more skilled than you really are. That’s the reason we get ourselves into investment hot water. Overconfidence makes you unwilling to recognize bad news.

Overconfidence comes from early success

It happens to all of us who play on the market at some time. We buy some stocks. They go up. We sell and we’ve made money, all at the cost of a couple of phone calls and some broker’s fees. You then attribute all this to your own skill instead of the dumb luck it’s likely to be.

This spectacular operation of yours, on which you get good mileage at dinner, at lunch and in the locker room at the golf club, turns you into an instant stock genius.

The Accidental Investor

That tendency toward overconfidence gets magnified when it’s combined with our tendency to use past situations to evaluate risks in the here and now. Experiments have shown that when people risk their own money on an investment and succeed, they’re likely to take on even more risk the next time around. Why? They don’t think of that money as theirs. It feels like they’re playing with house money.

House money

Let’s say you put $1,000 into a share that triples; now that it is priced at $3,000, you’ve got $2,000 of “house money.” So long as any of that $2,000 gain is left, you may shrug off any losses as a reduction of the house money, rather than a depletion of your own.

Somehow, losing the house money hurts less than losing your “own”, even though, strictly speaking, all the dollars are the same. This highly dangerous “house-money effect” can egg you on into taking an ever-escalating series of risks until you get wiped out.

It Won’t Happen Overnight

If you want to beat the market, you have to battle your tendencies toward over-confidence and judge risks in relation to recent failures and successes. You can also compare your investment performance to market averages to help keep it contextualized. Finally you must develop an investing strategy to help you assess each risk on its own terms.

It takes years to become good at investing, to learn what information is important versus what is just noise, and to get over risk aversion and away from the idea of house money. Just like master carpenters are not made in a day, neither are master investors. But with patience and a little self-awareness, you can do it.

I bought today

I just couldn’t stand looking at all these bargains any more. I broke down and bought today. Let’s see what happens…

If you believe you might be facing the threat of foreclosure then it’s not too late to save your family’s home. Mortgage holders who are more than 90 days in arrears on the mortgage repayments are able to apply for a loan modification that can help to stop foreclosure proceedings.

This means people suffering under financial hardship who are actively struggling to keep up with repayments may be able to apply for a loan modification that could potentially reduce your monthly payments, extend the term of your loan and even lower your interest rates.

What is Loan Modification?

A loan modification is a permanent change of the terms and conditions on your contractual mortgage agreement between you and your lender. When you originally applied for your mortgage, you agreed to specific terms and conditions that included the repayment amounts, the interest rates and how long the loan would run.

In the interest of helping you catch up your delinquent payments and get you back on track, your lender may be willing to modify your mortgage.

Why Would My Bank Offer Me a Loan Modification?

Regardless of all the negative talk on the news, banks don’t actually like to foreclose on people’s homes. Banks are in business to make a profit on the money they allowed you to borrow. They’re not in business to sell real estate.

This means that they actually make more money by charging you interest for as long as possible rather than paying for the associated legal costs of trying to foreclose on a house that they’ll then need to sell at a loss in order to get a portion of their own money back.

Obviously it’s in their own interests to try and help you to get yourself back on your feet financially so you can continue to keep making your mortgage repayments so they can keep making a profit.

How Can I Apply For A Loan Modification?

Your lender will want to review your application for a loan modification in writing. The bank’s loss mitigator doesn’t want to hear how bad your situation was. All they want to know is that you’re working to improve it and what they can do to help you get back on your feet financially.

It’s important you write down an accurate list of the repayments you’re expected to pay on your mortgage, personal loans, credit cards and any other outstanding bills you may have. Then you’ll need to add up your total household income and add this to your application.

If your income has been significantly reduced recently due to being laid off from work or from an illness, then do make sure you mention this fact in your loan modification application as it is an important aspect of why your repayments are delinquent.

Point out to your bank that if they approve your request to have your loan modified and reduce your monthly repayments then you’ll have a much better chance of keeping up with the lower payments they expect.

How Does a Loan Modification Stop Foreclosure?

When your bank agrees to modify your loan, they have entered into an agreement with you to help you re-establish your financial situation. This means that even though your mortgage may still be delinquent they won’t foreclose on it while you remain diligent within the terms of your new agreement.

Unfortunately if you leave your application for a loan modification too late, you could find that foreclosure proceedings may have already begun. If you know you’re already behind on your payments and you’re struggling to catch up, you should consider the option of loan modification before foreclosure proceedings begin. If you need to stall one more month, a good option might be unsecured personal loans, to keep you in your home and out of foreclosure.

When times are bad, investors have traditionally sought refuge in gold. With bullion dealers reporting a surge in business, it seems that history is repeating itself. Prices are strong and gold is currently selling at around $930 an ounce. In March 2008, the gold price reached above $1000 for the first time.

Will the price of gold go higher?

Now one investment fund manager is saying, “Sometime this year, perhaps this spring, the gold price will rise as high as $1,600.” Could he be right?

Getting started

If you have absolutely no experience in investing in gold, apply for Online Payday Loans and search the internet for some good learning material. Gold is a wide and complicated subject and you should know a lot about it before you jump in and start buying.

The gold rush

One man has converted all his investments into gold. He explains:
“Over thousands of years gold has never reached zero. The price is a risk, but at the end of the day I will still have the same amount of gold. There are people who probably hold bank shares that would have been seen as conservative investments and you could question what they are going to be left with. I can sit at home and track my investment online.”

The gold that the man buys is kept in a vault in the bank. Commission fees are typically less than half of a percent, and insurance against theft is also a nominal amount.

Bunker mentality

Investing in gold does smack of bunker mentality but other investors are now following suit and bullion dealers reporting a sudden upswing in business. A British online gold broker in London, which allows clients to buy and sell certified gold held in vaults in London, Zurich and New York, report that they are currently opening an average of three times as many accounts a day compared to 6 months ago.

It holds its value

The CEO says the appeal of gold is its ability to hold its value over time, and it measures up well against inflation. “There is a story told about a Roman emperor who bought a suit of clothes thousands of years ago with an ounce of gold. Today that same ounce would be worth about $900, and that would again pay for a suit of clothes,” he says.

Gold is a long-term investment that comes into its own when times are bad, like the Great Depression and during the stagflation of the 1970s.

How do you buy gold?

Buying gold is very simple. There are basically four ways of buying gold:

• Gold Coins.
• Gold bars to take home.
• Gold bullion or bars held in escrow.
• Gold in the form of Exchange Traded Funds.
• Gold coins and gold bullion or bars one can purchase from dealers, auction houses or even from other collectors.

This poem by Thomas Hood (1799-1845) says it all:
Gold! Gold! Gold! Gold!
Bright and yellow, hard and cold
Molten, graven, hammered and rolled,
Heavy to get and light to hold,
Hoarded, bartered, bought and sold,
Stolen, borrowed, squandered, doled,