How we feel about our own finances has an effect on the market as a whole. Well now you may be saying that you feel less optimistic because the markets have been going in the toilet lately. It’s sort of like the chicken and egg scenario. Didn’t this all start with the demise of the sub prime mortgage market. If you remember that all started when people were unable to keep up with their mortgage payments and started to lose their homes. It sort of has a snow ball effect don’t you think.
The real difference between a rut and a grave is the depth! So stop digging and put down your shovel. There are solutions and there is a better way.
1) Stop looking at your feet and start looking at where you want to go. Begin with the end in mind, and with that I mean that you should have a clear vision of where you want to go.
2)Take action now. Don’t get caught up in analysis of paralysis. Just do something, and learn from what you do until you find out what works.
3) Expect to succeed. Hoping and praying will kill you. Expect to achieve your end result. If your boat overturns in the middle of the lake, you don’t hope to make it to the shore, you find the closest point and swim your butt off and get there. Be persistent and find a way.
If your current financial crisis finds you buried up to your eyeballs in bills, there is a better way. Contact my office today so we can show you how to systematically eliminate all your debts so you can build true wealth.
Cheers,
Pat
“Where does it all go?”You’re looking at your T4 from last year or maybe your most recent pay stub. Sure many people wish that those numbers after the dollar sign were a litter higher but it’s the vanishing act that alarms your the most. Tax time is especially sobering: you can see how much money you made…. but your credit card is still maxed out and you don’t have much to show for a year’s income.
If you are looking for the holes in your wallet start by making a list of your debts. Are your credit cards teetering at the top of their limits? Do you make regular use of your overdraft protection at the bank? Do you have escalating tax liabilities? What about any department store cards? Do you know what interest rate you are paying on them? Have you added it up? Many Canadians are startled to see how much they are actually paying to service their debt.
Industry Canada, which monitors consumer data, reports interest rates for department store credit cards as high as 28%! Even competitive rate credit cares will often run at 18% or more. This is also at at time when mortgage rates are dropping.
Why do banks and department stores charge such high rates? These are unsecured debts, meaning that if you default on the debt the lender has no easy recourse to recover the money. Not surprisingly they charge a higher interest rate, and sometimes a MUCH higher interest rate, to compensate for the higher risk that an unsecured debt represents. A house is considered a reliable security, so mortgages often offer the best rates anywhere.
Consider this then. If you have equity in your home, you can take advantage of attractive mortgage rates to save a bundle on interest charges. Compare current mortgage rates with the rates charged on your other debts. Seek some professional advice on whether it might pay to do some restructuring and roll your other debt, such as your credit card debt and tax liabilities into your mortgage. You can consolidate your debt into fewer payments and save some money on interest and improve your cash flow at the same time.
You have a few options: A secured line of credit could provide you with funds up to 75% of the value of your home, minus any mortgage debt on the home. You can look forward to a substantial reduction in the interest rate and all you need to pay each month is interest, ( this is both good and bad). You can do the math on this comparison yourself, or talk to a mortgage professional like us. If you are carrying credit card debt you will be shocked at what you can save with a secured line of credit.
You could also consider increasing your existing mortgage. If your mortgage is coming up for renewal, this the perfect time to reorganize and consolidate your debts at today’s excellent rates. Even if you are in the last year or two of your mortgage, it may make sense to restructure your finances and roll in your other debt at a much lower rate.
Your best option will be clear to you once you have discussed your situation with a mortgage professional. So feel free to contact my office today to see how we may be able to help you.
Cheers,
Pat
You’re about to learn some closely guarded information you’ll never hear from bankers, brokers, insurance agents, or credit card companies. Many love to keep you in the dark about debt, credit, and investing so they can keep getting richer at your expense.
If you don’t do something about it, more than half your lifetime earnings will eventually end up in the bulging pockets of others. Think I’m kidding? Read on.
Banks and lenders are robbing you blind, as the real interest rate of your home mortgage may be as high as 200%! Let’s use this example. Average home costs 225K, assuming you have good credit and you get an interest rate of 5.7%. Now this is where it gets interesting, you have options to spread out your loan to 25, 30 or 35 years.
At 25 years, you will be paying 194,906.41 in interest alone before it is paid off. At the end of the 25 years you have paid 419,906.41 for that 225K house. At 30 years, you will be paying 241,714.81 in interest alone before it is paid off. At the end of the 30 years you have paid 466,714.84 for that 225K house, now almost double. At 35 years, you pay 290,772.51 in interest or that 225K house has cost you now 515,772.51! In case you have not got it so far, the bank always pays them selves first! In fact it will take you almost 15 years of payments ( on a 25 year mortgage) to break even on a principal and interest payment balance. There is also no guarantee that your real estate will appreciate at the same interest rate the bank is charging you!
Credit card companies lure you with the “prestige” of their credit cards. Meanwhile, you’ll end up paying them two, three, even five times what you actually spend on products and services! Would you pay $17,500 for something worth $3,500? Well, that’s exactly what you’re doing when you charge $3,500 on a credit card!
There are over 50 Million credit cards in circulation in Canada, or over 2 per adult. Over 22 million of those cards carry a monthly balance. Canadians owe over 50 BILLION in credit card debt! Our national mortgage debt tops 500 Billion. Here is a scary fact, for every dollar of disposable income that we have, we owe $1.25 to debt. We are not making any real progress.
Who’s winning this game, give you one guess and it ain’t us!
Most people believe that the stock market is a better investment than paying off their debt. However the truth is, when you pay off your debt you can get a Guaranteed Return of up to 20% a year. Try getting that in the stock market! Especially with the recent volitity that we have seen in the past week or so, investing in stocks can be a risky proposition.
Let Craigburn Capital show you how to steer clear of the traps and put you on the path to financial freedom. You’ll learn how to get rid of all your debts in as little as 5-7 years and possibly retire a debt-free millionaire. It’s easier than you think. Contact us today so we can show you how.
Cheers,
Pat
JONATHAN STEMPEL
Reuters
July 27, 2008 at 9:00 AM EDT
NEW YORK — Even as Washington Mutual Inc. lost billions of dollars from risky mortgages, the largest U.S. savings and loan could rely on its credit card business to turn a profit. No longer.
The thrift’s $175-million (U.S.) second-quarter loss from its card unit stemmed from higher delinquencies and an inability to sell some card debt to investors because of illiquid markets. It was Washington Mutual’s first card loss since it entered the business in 2005 when it bought Providian Financial Corp.
Washington Mutual is not alone. American Express Co., Bank of America Corp., Capital One Financial Corp., Citigroup Inc. and JPMorgan Chase & Co. face pressure as falling home prices, $4-a-gallon gas and rising food costs leave more cardholders struggling to pay their bills and force even wealthy customers to spend less.
To read the rest of the article from the source where I found it click here. Otherwise here is my take, This is a sure sign that people are robbing Peter to pay Paul. Here is the easy solution “Stop living on your credit cards”! It is the highest cost to borrowing that we have available to us, well that is if you don’t include you local loan shark! There is a better way. My company has helped many people who where drowning in debt to reduce their overall expenses and showed them the road to becoming totally debt free. Put that plastic on ice and call our office to see if we can help.
Cheers,
Pat
