Tuesday, November 20, 2007

Keep your nest egg growing

Keep Your Nest Egg Growing and Safe
by Michael Sexton

Does retirement planning scare you?

If so, you’re not alone. As soon as the subject comes up, most people start to sweat. They worry that they haven’t saved enough. Or they blame themselves for waiting too long before thinking about their retirement years.

Put the blame game aside. The good news is, you can change that kind of thinking in a day. You can do it now if you confront the issue of retirement head-on, and take some small steps to get started.

Do the Simple Stuff First

There are lots of complicated things you can do to plan for retirement. You can read reams and reams of complex investors’ information on the Internet. You can meet with an investment advisor and take home a briefcase stuffed with information about stocks, funds and bonds. You can call your friends and relatives and listen to their advice about what you are doing wrong.

But why start by putting more obstacles in your way? To get a quicker start, take a simple look at the things you already have in place. If you work for a company and have a 401(k), for example, set your contributions to the highest possible level - especially if your employer matches the dollars that you put in. If you forgot to increase your 401(k) contribution after your last raise, do it now. Also monitor your Social Security account so you always know how much income you’ll get when you retire.

Keeping your eye on the basics will add more money to your retirement accounts than you can imagine. Best of all, you are doing that by controlling retirement accounts that you already have - not ones that it will take you months to research, set up and fund.

Start Saving and Investing Today, Not Tomorrow

Thanks to the magic of compounding, even late starts can make a difference of tens of thousands of dollars -maybe hundreds of thousands - and a better-funded retirement.

Starting today gives you a psychological edge too. It builds your confidence and momentum.

A good investment advisor can help. To find the right one, get referrals from four or five friends and meet with the advisors they recommend. To keep your selection simple, go with the advisor who takes the most time with you, who shows interest in your objectives and situation - and who shows no frustration about answering all your investment questions.

If one of them makes you feel dumb for asking basic questions - well, that is a dumb advisor.

Get Realistic about Spending

The point of accruing wealth is to live an interesting and rewarding life. Everyone at Trump University is in agreement with that idea.

But there is a difference between living well and throwing money away. And part of the problem is that some of the acquisitions you make today can cost you a lot of money tomorrow. (And for many of us, “tomorrow” translates into “retirement.”)

For example, the residences you buy today will become more expensive to own in the years ahead. You have to think about that. Property taxes, on luxury residences especially, could well increase four or five times in the next 15-20 years. So the point is, ask your financial planner to help you decide when you are reaching the point of being overextended in your real estate holdings. Remember that the expenses you can carry today are not necessarily the expenses you can handle tomorrow, because some of them will grow.

Also get in the habit of buying only things that you know you will use and enjoy. When a new gadget appears that you want, wait for the price to fall before you buy it. It makes financial sense to treat money with respect. And if you have children, you’ll teach them the value of what a dollar can buy.

Talk to Your Investment Advisor about Risks

Investment advisors, you have noticed, like to talk about potential earnings - and rarely like to tell you what can go wrong.

The simplest way to learn about risk is to keep aksing about it. Some good questions to ask are:

“Is my return on this investment guaranteed by any government agency or some other entity?”
“How much money can I lose if this investment fails?”
“Do you have your own money in this investment account or vehicle?” (If the answer is no, find out why!)
Remember, you might not hear about risk unless you ask about it.

Get Smart about Your Insurance Coverage

Don’t spend such a fortune on insurance that you become insurance poor. But do buy enough to make sure that your residence, possessions and autos are covered - and that their full replacement value will be yours in the event of catastrophic loss.

Also review your liability coverage. If a guest becomes injured in your yard or home, for example, will you run the risk of losing everything?

The bottom line . . .

When you retire, you want your nest egg to have grown. But you also need it to be safe and sound, because a lot of money that is at risk does not represent security.

Just remember that it is not beyond you to reach those goals. The key is to get started today.

Nick Woodard
Keller Williams Realty

Tuesday, November 6, 2007

Foreclosure Training

Investing in Foreclosures? The Fundamentals Still Apply
by Michael Sexton

When you’re buying foreclosed properties, you can throw away all the classic wisdom about real estate investing, right? It’s a whole new world with new rules.

No, wrong. The fundamental rules apply, only moreso. Let’s take a closer look.

Rule One: Foreclosure or not, location is still of prime importance. You still need to look for properties in locales that promise growth and appreciation. So always consider the trends in municipalities where you might buy investment property. A new commuter line, a new hospital or a new school can dramatically increase property values. Even though you will find more foreclosures in dying communities, stay away from them. Location is still king.

Rule Two: There must be a way to increase the value of what you are buying. If there is no potential for growth, why invest? Remember, not all foreclosures are the same. As with all properties, some are standouts and some are duds.

Rule Three: Cash flow is still king. Even if you are applying a prudent“buy and hold” strategy, how will you generate income from your holding? Remember that the “on paper” value of the properties you own is fine, but that negative cash flow can drain the lifeblood from your investments and sink you.

Rule Four: Comparable values are still the yardstick for success. Comps are the yardstick you must use to evaluate the potential of your investment. So do the math. When buying a house to renovate and sell, deduct the cost of your renovations from its fair market value. That’s how much you should pay, not one cent more - whether the property is a foreclosure or not.

Rule Five: You still need expert advice and counsel. Buying a foreclosure does not entitle you to get sloppy and make decisions on the fly. You need a good attorney, a capable home inspector and all the other pros who can help you minimize risks and avoid mistakes.

Rule Six: Take your time. Even with “foreclosure fever” in the air, the first foreclosed property you see is probably not one you should buy. Yes, there might be a limited period of time left to take advantage of the current foreclosure boom. But that doesn’t mean that you should rush to snap up the first property you consider and make unwise mistakes. You need wisdom on your side.

Nick Woodard
Keller Williams Realty

Sunday, November 4, 2007

Real Estate Picking back up?

Is the real estate market picking back up in Middle Tennessee? The answer, yes and no. I have been keeping a very close eye on what is going on around me lately. The real answer to the question is, "what area are you talking about?" Because 3 miles can make the difference in a Hot market and a Cool Market. In the neighborhood that I purchased my home in Antioch Tennessee, 3 months ago the new sales agents were selling about 4-5 units per week, a combined 185 units for the previous year. As of 2 months ago, they are selling about 1 every two weeks. But just down the road in a new neighborhood that Kathryn and I just put a contract on a home, I have brought 5 different buyers that are purchasing a home this week. So you see, when someone asks you " is the market slowing down?" the real answer is "yes and no" it just depends on where you want to be. In a market like we are currently in, it is all about finding opportunities.

The government is keeping loans at a very reasonable rate. Jobs are continuing to come available. People are moving. What seems to be the problem? Media. Media. Media. The media is putting a false sense of dispair on buyers and sellers. Yes there are states and cities in this country that are having a terrible reversal of the market. But here in Nashville, we are sitting pretty. There is absolutely no reason to be nervous about buying a home in the Nashville market at the current state. Things look bright for our future here in God's Country.

If you need help with a real estate transaction in Middle Tennessee, give me a call. I would consider it a blessing to be able to help. God Bless

Nick Woodard
Keller Williams Realty