My Wealth Journey

Is Bush’s plan really going to make much of a difference? From the numbers I’ve heard, it was less than 100,000 people who his plan will help. 100,000 people is still a lot, but there are over 2 million people who are in trouble. Seems like the plan is more of a gesture than anything.

I’m actually on the fence about this. I hate to see families lose their homes but as someone who put off buying a primary residence in CA, I feel like the people paying 700k for a 1500 sq ft home in southern California should not be bailed out.

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As someone who is waiting for the prices to drop down a bit before entering the marketing in Irvine, I’ve noticed a number of listings in the MLS that have dropped their asking price by over 10% after having their homes on the market for over 3 months. I hope more people realize that they won’t be getting 750k for a 1500 sq ft home anymore.

I don’t find pleasure in people going under, but if those people are too stubborn to pay attention to the market value around, they will just keep on dropping their list price after others instead of being the first to do it and their values will just keep dropping not allowing them to get rid of their homes.

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I received my estimated property taxes for a home I got in April 2006 where the value was about 18k over how much I purchased the home for.  I certainly was disappointed because last year the value was only 60k since it was a new home.

I decided to try to protest the value on my own without using any service since I figured the best outcome would only mean a savings of 400-600 bucks and if I used someone, I’d pay about half my savings away.

All I did was write a very short letter and explained that I purchased my home for 18k less than their appraisal and included the closing statement. Within a week, I got a notice back that they are adjusting the value to the original purchase price of the home! The end result is savings of about 480 bucks this year based on a 2.7% tax rate in about half a hours of work.

The moral of the story, if you built a new home and the appraisal was way over the purchase price, just write a short letter and send them your closing statement. Contesting the value of an older home may be tougher because then you need to send in comps and probably would have to show up in person.

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Wow is all I can say from the new home sales for April. New home sales jumped 16.2 percent last month. After reading a little further in the news article, all of the sales increased came from one region; the northeast which saw home sales jumped 43.1 percent. I know a lot of housing bulls (a.k.a realtors) will jump on this and say the housing market has bottomed already and start promoting the hell out of this number. Sales were down in every other part of the country and median new home prices dropped over 11 percent. Prices are definitely coming down on new homes.

I still plan on waiting this out before buying a home in California to live in. The prices haven’t dropped that much yet as there are still people trying to sell homes at 2005 prices.

Yahoo New Homes Sales News Article

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So a few friends of a friend have got into MLM recently. I don’t know if they fully understood MLM or the business they got into but if you are familiar with quixtar then you’ll know what this is about. Quixtar is your basic MLM scheme. I will be quick to point out that I don’t believe they are legally scamming anyone that I’m aware of, just misleading and doing a good job of convincing its new members to sign up based on promises that are never fulfilled.

What is a friend to do? Do you tell them they are buying into false hopes and dreams of riches? These are the people who fully believe in their ‘new business’. One of them was passing out business cards about their new business. I went to one of the websites and I could not figure out what was being sold, just a bunch of promo and sales pitch to earn money.

People do make money with multiple level marketing. No question about it. If you can convince other people of the same dream you bought into, you would definitely start making money from their fees. You are essentially just passing the bag to the next person and they will continue to pass the bag. This is what makes MLM work.

As you can see, making money with MLM is possible but at the expense of the next person. I truly believe most cases, the people who join MLM programs really believe they are showing you a way to make money. For those wanting to learn a little more about MLM, the forums at Rich Dad have lots of people who know they are part of a MLM and do not mind at all.

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Yahoo stock jumped up to over $33 at the time of this posting over news that Microsoft may buy the company. Is it really a good idea for Microsoft? Yahoo’s stock jumped close to 20% already just over the news that it will be bought out. So the purchase price would probably be close to $40 or so a share. Additionally, Yahoo’s P/E earnings is already higher than Google, even though investors are making a big stink about Panama.

I don’t think its a good idea for Microsoft to buy the company outright, maybe setup some kind of partnership instead. The deal would be great for Yahoo investors.

I do wonder what kind of affect this would have on SEO. MSN’s search engine results are more spammy and are a lot easier to get into which does benefit me. It’d be nice to keep their separate algorithm and to keep their brands different.

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The mortgage subprime fall out has created a smaller pool of buyers and people who can refinance and has hit my former company. I learned that a few weeks ago half of a department (8 people) was let go. Although you can argue most saw the writing on the wall with the subprime mess, this shows the importance of having multiple streams of income.

I know most of these folks have families and some of them don’t have a working spouse because they stay home and take care of the kids. A job cut like that will definitely hurt them.  If they had other streams of income, (which I hope they do), the cut will give them a little bit of time and save them from financial stress of figuring out where to go next.

Since I’m in IT, I would naturally say, make money online. These folks were from non-IT jobs, but that does not mean they can’t start making money online. A simple blog about a topic they are knowledgeable would be a start for them. They would at the least be able to eventually sell text links and put up affiliate links (even if its just for friends and family).

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I just received the notice of appraisal value for my Austin property and am glad to see the taxes went down by a little.  I have a property in the Manor ISD that had a 2006 tax rate of 1.768% that looks like it has been cut to 1.535%. A savings of roughly $200-$250 a year which definitely helps cashflow a little. The other estimated tax rate are the same. The proposed appraisal value also went down by a thousand. I was expecting the value to go up while the tax rate go down a little, neglecting any tax decrease.

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While at lunch with coworkers, we were discussing how much should you contribute to a 401k plan? The answer is to contribute at least whatever amount the company will match. So if your company will match up to 4% of your annual salary that you put into your 401k, then you are throwing away money by not putting at least 4% into your 401k plan.

Everyone’s answers will be different as far as how much more to contribute. If you have a lot of disposable income and are in the higher tax bracket, sometimes putting the IRS max contribution will help save you on taxes. Even if you aren’t in the higher tax bracket, putting money into the 401k will reduce your taxable income. However, I don’t recommend people who live close to paycheck to paycheck or don’t have at least 6 month’s worth of living expenses, which includes mortgage payments in their bank account, to contribute anymore than what the company will match.

Any money that you put into the 401k is tax deferred, meaning you pay taxes when you withdrawl. Some people believe taxes will be higher than they are now in the future and choose to just the tax now or put the money into their roth 401k account which is not tax deferred. If you think your tax bracket will be lower when you retire/withdrawl, then put as much as you can into your 401k account.

401k 2007 Contribution Limits

• $15500 for those under 50 years of age
• $15500 plus $5000 additional catch up contribution for those over 50 years of age

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Sports Authority is having an annual friends and family event which basically means you get 25% off on any single item purchase from now till 4/15. There are some brand exclusions some which are listed below. Check out Sports Authority’s site for more.

Callaway, Easton, Fly Flot, Garmin, K2, Louisville, Louisville Slugger, Magellan, Magnum, Marmot, Miken Sports, Minolta, Mission, Motorola, Muzono Golf, Nike, Nike Golf, Oakley, Pelican, Pro Feet, Rawlings, Razors, Taylor Made, and Under Armour.

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