More people are looking for a job or a second income than at any time in recent memory.  Unemployment is at it’s highest in recent memory and projected to keep climbing even after the economy starts growing again.  An ideal situation is one where you can earn while you learn in your own business, especially since it is extremely hard to find a job, any job, today.

Everyone is well aware that the economy is in it’s worst shape in many years.  The fact is that this recession is more damaging to more groups of people than any since the Great Depression.  Previous recessions meant job losses, the same as we are seeing today, and that affects current workers directly.  But now we have a financial and mortgage crisis compounding the effects and directly affecting other groups as never before.

There are a huge number of people who have already retired and were not in the workforce when the recession hit.  So they didn’t lose their jobs.  But they did lose the value of their retirement savings.  In some cases, actually many cases, they lost so much that they are no longer ’solvent’ in retirement.

This group of people often lost their home value as well as the value of their retirement, especially if any significant portion was invested in the stock market.  With 40% or even 60% losses in the stock markets, the power of retirement savings to fund retirement has dropped so low that many will run out of money significantly earlier than they predicted.   And they can’t borrow against thier house; it’s value dropped at the same time.

Many people are out of work because they lost their job and many more people are suddenly needing a source of income to close the gap in their retirement savings.  And unemployment keeps on rising and is projected to rise well into next year.

One source of income, and one that many people are turning to today, is self employment.  A home based business as a second career is becoming very common for people trying to safeguard or rebuild their retirement savings.

Traditional employers are not hiring.  However, you will always hire yourself, and a home based business is a critical second source of income even for those lucky enough to find a job.  If you are a business owner, your success is your job security and you are the one in charge of your own success!

As I said before, an ideal situation is your own business that allows you to Earn while you Learn.  It is important to start earning as quickly as possible, not only to turn a profit, but also to fund your business startup.  Renegade Professional is a learning tool, teaching click by click methods for attracting customers online.  The techniques work for nearly any business, so it is an investment in yourself and your primary business.  It is also one of the few business opportunity that show you how to earn while you learn, generating revenue while you are mastering the skills it teaches.

Another resource is Smart Marketing Plans, a blog for anyone seeking a home based business as a second career.

Finally, here is a site listing many businesses and popular categories available for people seeking to become their own boss.  There are literally hundreds or thousands of businesses that people can start and operate themselves.  Many of these can be run from home and many have low startup costs.  Investigate all companies and opportunities carefully to make sure it is an ethical company that fits your needs.

In addition there are many ‘business in a box’ type offerings that appeal to people with desire, but no previous business experience.  These opportunities often provide a significant amount of support to help ensure a successful startup because the pay is typically in commissions and therefore a fast startup is critical.

Financial health is dependent on healthy earnings, so finding or creating a second stream of income is becoming more important to many families.

Stock market rallies and everyone can be happy about that!  Right?

Well, that is actually a two-part question.  Absolutely everyone is happy about the stock market gains of the last couple of weeks.  This rally puts us back to the levels we saw at the end of 2008 when the economy was in free fall.

Gaining back nearly all the losses in the first 4 months of the year is GREAT!  It’s fantastic!  It’s the new reality…

Well wait, that’s a little too much.  It’s great, in lowercase.  OK

The reality is that there are glimmers of hope, even good news on top of good news.  But what passes as good news these days is really ‘bad news that’s not as bad as before’.  So let’s not get carried away.  How about cautiously optimistic.

So who wants back in the market?   Long term money does.  So if you’ve got some of that, charge right in.  Most Americans are not in that position, so the Smart Money is looking for safe investments and is still very guarded.

If not the stock market, then where?   The big move is into guaranteed investments, like fixed annuities.   Why fixed annuities?  They are guaranteed against loss.   The primary concern now that so many people have lost so much money in the stock market.

The other enticing feature of some fixed annuities is they are indexed to the stock market, usually the S&P 500, but it could be other indicators.   And why is that a good thing?   It’s a good thing because it means they participate in the market gains.

There are many other benefits of fixed annuities, but protection against loss and returns significantly above CDs and Savings accounts have got many people looking at them to stabilize their retirement accounts.

Check with your Financial Advisor or get more information about Smart Money For Life.

It has been a very long time since my last post, but I am back now and ready to pick up where I left off.

I won’t bore you with the details, but I have been very busy building Smart Money For Life, my financial services business.  We’ve got new products and programs that we are very excited about.  They are all designed to give people the tools they need in today’s economy.

As we have been working with clients, we’ve been noticing more and more people that are trying to balance family and personal goals with financial realities.  An increasing number are taking on second jobs or starting a business or both.  Our response has been to reach out to anyone starting a second career as a business owner and offering business support.

To meet this need, we just launched Second Wind Coaching, which is our marketing training and coaching business.  Our primary focus is working with people starting a second career as a business owner in a traditional, network marketing, or MLM business.   So many people need the financial benefits from a business but have unrealistic expectations about immediate success.  It’s true for any business, but especially for MLMs, and they need to know the truth about the network marketing industry in order to get started the right way.

It’s great to be back!  I love inspiring people to achieve financial success and live with an abundance mentality!

The right kind of mortgage modification can be a true opportunity for families today.

Not all mortgage modifications are the same and the success rates have not been as high as economists had hoped.  In fact, a high percentage of modified mortgages are going into ‘re-default’.  The most likely group are those that did not have a change in monthly payment.  Modifications that resulted in a lower monthly payment were more than twice as likely to succeed.

Let’s back up.   What is mortgage modification?

Mortgage modification simply refers to the process of changing the terms of an existing mortgage.  The good things about it are that the mortgage company and the actual loan itself stay the same, it is not a refinance.  I guess the bad news is that sometimes the ‘modified’ loan is different from the original, but still not enough different to create an opportunity for the borrower.

Can I call my mortgage company and ask to renegotiate my loan?  YES.
It might be an upleasant and/or unrewarding experience, but yes you can.

Why mortgage modification and not refinancing?  Typically a lender will only consider a modification if the borrower can’t qualify for a refinance loan.  Mortgage modification is typically a last resort before foreclosure.

Compared to foreclosure, any modification looks good on the surface - at least it keeps the family in the house for a while longer.  In reality, if the final result is still foreclosure, even delayed foreclosure, the plan may not have been sound from the beginning.

The most successful mortgage modifications are those that are coupled with credit repair, debt reduction, and sound financial planning.  There are many thousands of success stories - people who have used the modification process to save their house and create a new beginning for themselves.

Professional Mortgage Modification produces the best results and is most likely to give a mortgage with a lower payment, one critical component when a family is truly trying to succeed and get back on their feet financially.   Put that together with Debt Reduction and Credit Repair and the odds of success improve dramatically because now there is a complete and balanced plan for financial success!

I guess it is official, we’re in a Recession.  It is official because the economists have declared it so.  Apparently the recession started in December 2007, so we’ve been in a recession for about 1 year now.

The good news is that it has felt like a recession for about a year.  It seem like I’ve personally been in a recession for about a year.  The economic news seemed like a recession for about a year.  So my radar is working.  In fact, most people’s radar is working.

The bad news is that the economy will likely get worse before it gets better.

The realistic perspective is even slightly closer to home.  If it feels like a recession, act like it; if the economic news is personally bad, we should behave as if we get it.  The larger economy, in most cases, won’t overwhelm my own personal economy in a positive or negative way.

What I mean is that we don’t need an economist to tell us that the US economy is in recession to decide to reign in our spending.  If I spend more money than I earn, even in a good economy, I will eventually fall into a personal recession and then….you guessed it, depression.

Ride out the recession with financial discipline.  Spend less than earnings, increase income, reduce debt, reduce lazy assets and develop a short and long-term plan.  For people that have already done this type of planning and belt tightening, then ’stick to the plan’ is the order of the day.

For everyone else, the people most likely to ride out the recession financially intact are those that get started right now on a simple plan to turn things around.  That is why I started Smart Money For Life, to help people help themselves to financial health.

It is possible to thrive, even in a down economy.  And it’s not just about being frugal - there are many opportunities to actually increase income and earnings. For the forward thinkers, it is not enough to ‘ride out the recession’, it’s much more intelligent to decide to not participate in the recession at all!

Look for opportunities, start that second career as a business owner, turn your hobby into a business - think outside the box!  People are flocking to network marketing opportunities, spurred by the recession pressures, but also attracted to the many benefits of network marketing.  Robert Kiyosaki talks about the eight hidden values of a network marketing business, not counting making money.

If we employ personal financial discipline, educated planning, and look for positive opportunities, we won’t need an economist to tell us when the economy is out of recession.  In fact, there are many millionaires made in every single recession.  Recessions are a huge redistribution of wealth; a great deal of wealth changes hands, it doesn’t just disappear.  Most people will know the recession is over because they feel like they can loosen their belt; the rest will have created opportunities to end their personal participation in the recession long before belt loosening is popular!

Thanks to all who have written and kept us in your prayers this past week while Melana had surgery.  The positive thoughts and energy must have worked!

No surgery is “minor” in my opinion, but her’s was at least in the ‘routine’ category.  That is always good news going in.   And the Doctor was upbeat with his post surgery report; another ‘routine’ report and ‘as good as can be expected’.   I’m OK with that.

One night in the hospital - shouldn’t be too bad.  Still in the routine range.  And just when it seems safe to relax….then things suddenly change!

Apparently the time it takes to ‘get the meds right’ can be somewhat enlightening.  Suddenly and terrifyingly enlightening, depending on your perspective.   During the routine getting the meds right step in the recovery process we found out about a previously unknown reaction to one of the meds.

During the next two or three hours, while we tried to keep Melana awake enough so that we could communicate the importance of regular breathing, I had some time to think.

Health is more valuable than money!  No kidding.  It’s easy to say, easy to get agreement on, even has kind of a nice ring to it.  But in reality it’s when I felt the truth of it that I really understood.   I had even heard people relate their feelings at their moment of truth and I still didn’t get it.

Really, we probably aren’t capable of intellectualizing that type of thing until we’ve felt it.  It must be true for a whole range of experiences.  And it must be especially true for experiences that involve those that are most dear to us.

Health, especially of those that are most dear, is more valuable than just about anything.  We have our health, and I am more grateful than ever.

For future reference, if you think you are having a ‘moment of truth’, here is a test:

Are You Frantically Trying to Making Deals with God?

You know…’I promise I’ll do this’ … or ‘I’ll never do that’ if you just get us through this ordeal?
One right after another?
What, on the off-chance your Higher Power was on break when you submitted your first deal?

Pretty scary.

Health is valuable…most people put out some pretty sweet deals to their Higher Power, that’s how we know it’s valuable.

You should always be aware of your credit score and consistently work to keep it high.   If you have a 750 or 800 score, you should check on it at least once a year just to make sure there are not any problems.

If you don’t have a 750 or higher credit score, you should probably be working on it more diligently.  You can get a free credit report from each agency once per year if you request is yourself.  So, why not see what is on it?

If you are under 650 on your credit score, you’ll need even more work.

Under 550?   Stop reading and get some help to Raise Your Credit Score!

I had a client respond recently that his credit score was under 600, but “it’s OK, I’ll work on it when I’m ready to get a loan”.

Don’t do that!  Your credit score is either high when you need it or it’s TOO LATE!  Work on it while you have the time, before you need it.  Don’t wait until you need it, when you are applying for a loan!

Here is an article about Credit Score Improvement and the do it yourself or do it for me question:

Can I Improve My Credit Score Myself?

You owe it to yourself to work on your credit score, or at least KNOW that it is good.
Don’t set yourself up for surprises when you really need it … like the guy that found out his score was too low when he was applying for a job and couldn’t get the required security clearance because of his credit score.

Wow!  Not getting a loan is plenty bad enough.  Not getting a job is even more painful.

With all the grim economic news swirling around, it is easy to get mired in the darkness of it all.

So let’s take a break and focus on 2 indicators that are dropping.  One has been falling consistently for 60 straight days!  Another one fell by 75% practically overnight!   Sounds Bad!

Good News!

The first one is the price of gasoline.  That number has been dropping steadily for 60 straight days.  The national average is almost down to $2 per gallon.  Reports today are putting the price at $2.09 per gallon.  Now then, we should all be able to agree that gasoline prices near the $2 mark is a good thing.  At least a silver lining….almost everyone gets to keep a little more of their money …this week.

Hurray!

However, we should save some of our pent up excitement for this next bit of news.  OK, it’s not really an economic indicator, but it is an indicator.   I consider it an indicator of good vs. evil, kind of a running ratio of good forces over evil forces.

Some of you know what I’m talking about — SPAM!   Yes, that’s right, SPAM, as in unsolicited and unwelcome email about cheap watches, fake diplomas, software, and all the other sordid topics that find their way into our junk mail filters.

In one day, with the closure of a single hosting service, the incidence of spam email dropped an estimated 75%  !   Correct….75%

That happened last Thursday, or actually it was probably Wednesday and we heard about it on Thursday.  At any rate, I am going to consider the spam indicator at very nearly important as the price of gasoline.  You know what I mean, and many people agree with me!

OK, not really as important as the price of gasoline…at least not the direct connection to the overall economy sense.  But still, important.

I definitely saw an immediate decrease in the level of spam, and it is holding; I still have significantly less spam.  In fact, it’s so low, I’m not sure where to buy my next fake designer watch!

Double Hurray!!!

One final thought -
if a single hosting company funneled 75% of the spam to US online users, and
if that was a known fact (as was reported in the media), and
if the problem was fixed practically overnight when two reputable (as reported in the media) companies cut off access to the internet for the offending gorilla of the spam world…

What in the world took so long?!?!

I wonder…

A quick post to answer recent questions for more information about Equity Indexed Universal Life:

How long is the term for Equity Indexed Universal Life?

Typical term is to age 100.  The concept is of a ‘universal’ life insurance product, meaning that it addresses multiple factors and extends for the life of the insured.

I’ve heard that some life insurance policies have cash value.  Does this type have cash value?

Yes.  In fact, the cash value is the main reason we recommend it for our clients.  True, there is a pure life insurance component that pays in at the time of death, like term life pays, but there is also a cash value.  Balancing the cash value and the life value through the term of the policy is important in maintaining the full benefits, including tax benefits associated with Equity Indexed Universal Life.

You don’t really expect me to believe that if the stock market goes down by 30%, like it just did, that I won’t lose any value in my Equity Indexed Universal Life policy, do you?

Yes.

Probably a little too short on that last answer.  Let me explain.

Equity Indexed means that the investment is indexed to a market index or group of stock, funds, etc.  An example would be the S&P 500 which is a collection of specific stocks.  The index moves up or down based on the actual, specific moves in the underlying stocks.   Your EIUL is held in a separate account by the Insurance company, which pays based on the movement of the index.

The important point is that the insurance company pays….based on the index…. and it is not the value of the individual stocks that deliver earnings or dividends directly to the holder of the EIUL.   Therefore, the guarantee of the insurance company is part of the EIUL policy itself and governs the annual valuation.

Since the policy is Indexed, it tracks up and down with an index.  Since it has a ceiling and floor built into the valuation, the value can never go below the floor which is usually 0% or +1%.

So, the value can never go below 0% gain and can never lose principal value.  The index resets annually, so each year the worst it can do is gain 0%.

Good Questions - keep ‘em coming!

See related posts on this blog:
A Safe Place For Your Money
Eliminate Stock Market Losses

Sounds like a good idea, wouldn’t you agree?  It especially seems like a good idea to people who just lost 20% or 30% or 40% of their stock portfolio!

There are options available to invest that allow you to participate in the returns of the stock market AND are guaranteed against loss.  Correct, guaranteed against loss of principal.  The vehicle of choice is Equity Indexed Universal Life (EIUL).

That means that those owned stocks in mid-2008 directly, or invested in a mutual fund which owned stocks, likely lost a big chunk of value - let’s call it 30%.   On the other hand, those that held Equity Indexed Universal Life policies did NOT lose any value.  They didn’t have significant gains, because the entire market dropped like a rock, but they didn’t suffer any losses.

The point is that there are ways to protect against the damaging swings in the market that have the potential to have devastating, or even fatal, impacts on investments.  Many people are rethinking their investment strategy and trying to build in additional safeguards.

I compared a variety of investment options in this blog recently, including EIULs:  A Safe Place For Your Money.
EIULs compared favorably to more than a dozen other well-known investment vehicles on all major considerations for sound investing.

(Note:  in A Safe Place For Your Money, the investment pyramid starts with one at the top, then goes left to right on each row moving down toward the bottom.  I got several notes saying the visuals were a little confusing at first.  I took them from a presentation that we give on the topic and had to pick just one image.   You’ll be able to figure it out).

There is much written about safe investing, and every investor should be well informed.  Diversify, understand your investment horizon, have a written plan and clear goals, etc.  I always encourage ongoing education.

And consider the safety as well as tax impacts of your investment decisions.   Yes, that does mean that you should do some long-term calculations and see what the end game looks like.  Using assumptions isn’t going to give you the answer, first of all, and secondly, it doesn’t help you sleep at night.

Equity Indexed Universal Life is tied to a specific market Index, like the S&P 500 or NASDAQ or others, so the investments value goes up with that index.   Just like direct investments and mutuals, so far.

However, EIULs have a floor, usually 0% or 1%, that protects the account from loss.  So the Indexes all just went down in the last two months, way down….way, way down.  But EIUL holders either had a gain of 1% or they had 0% gain.

The stock markets have been the investment of choice for long term holdings because over long stretches they give the best returns.  The volatility has always been the downside.   EIULs temper the downside and allow participation in the upside.  The best of both worlds.

Eliminate Stock Market Losses….and still participate in the high returns of the equity markets!

Think about it for  your financial plan.