No Matter What

We all have them.  They are things that are so dear, so critical to our beliefs, our morals, our faith, our very being, that no matter what, we would never compromise.  Have you ever considered your 'no matter whats?'  Our NMW's define who we are.  They shape our character and act as a window to our soul.  

When I think about this it blows my mind.  As a father, a husband, a business owner, a coach, a den leader, a church leader and a son I have expectations to meet and lives to impact in potentially powerful ways.  If I don't have strict and defined 'no matter whats' in my life it could be devastating.

Do you think that there would be less divorce if men and women upheld their vows, no matter what?.  Would our economy recover faster if our business owners where always honest and fair, no matter what?  

Then I think of my kids and I wonder if I am doing a good enough job of instilling some no matter whats in their lives? Imagine never having to worry about teenage pregnancy because you know your child has a 'no matter what.'  Imagine not having to wonder if you child is under the influence of anything because they have a 'no matter what.'

What are your no matter whats?

The Best Vacation Ever

What is your favorite summer vacation?  I have gone on some pretty cool trips over the years.  Just before my wife and I were married we spent 2 weeks in Argentina.  We visited family and spent a few days in Buenos Aires.  Soon after we were in Kauai on our honeymoon.  Several years went by but we went on this fantastic vacation to an all inclusive resort in Nuevo Puerto Vallarta Mexico.  That was super fun.  We have even gone back to Hawaii since then when my sister got married in Maui. 

This may come as a surprise but my favorite vacation is the one we took last summer.  Last summer we went camping by the beach in a borrowed tent trailer.  Why this over the others?  Well, quite frankly, it’s the only one that didn’t follow me home.

Most people feel that they work hard and therefore ‘deserve’ a vacation.  So they justify not only spending money they don’t have, but overspending money they don’t have by putting it on their credit card.  Then, a month after their vacation is over, they get to start making payments on it at an average of 18% interest.  This is the definition of a vacation that follows you home. 

I know the past two years have been rough.  The word staycation has become part of our vernacular and no one thinks anything of it.  That’s a good thing.  Everyone needs to take time to unwind but broke people shouldn’t go on elaborate vacations.  All of those great places I mentioned earlier were paid for with credit cards and some of those trips took YEARS to pay off.  That is no way to unwind.  I would have been less stressed had I worked the whole time and never took those trips.  What made my camping trip so relaxing is the fact that I paid cash.

Did you know that the smores taste better when you are debt free.  The fire is warmer when you are debt free.  Sand is less annoying when you are debt free.  Packing and unpacking is fun when you are debt free.  I could go on but that would just be irritating.  You get the point.  This was the best vacation because it did not follow me home.  I didn’t mind buying more ice, or making a trip to the store for something we forgot.  It was a truly relaxing and enjoyable experience for the whole family.  Ironically it had nothing to do with where we were physically, but where we were emotionally and financially.

I am not sure what your plans for vacation might be this summer.  I sure hope that those of you who have debt are putting things on hold until you get that debt paid off.  Take it from someone who has made the same mistake.  You don’t ‘deserve’ to do that to your family.  Pay off your debt, then go have a blast.

Chino Hills Mortgage Rates 4-12-10

The Perfect Tax Deduction

Every year about this time I get phone calls from people who have just met with their CPA or tax professional. They call me because they were told that they need to buy a house so that they can have the tax write off. This has always been troubling to me. A tax write off is not the reason to buy a house. Neither is a tax rebate by the way, but I will try to remain focused.
Homeowners get to deduct the interest that they pay over the year from the gross income thus reducing the amount of taxes that are paid. I get why CPA’s and tax preparers may be telling their clients to do this, but they are terribly wrong. I am always fascinated by financial people who cannot do math. It’s kind of like a shop teacher with missing fingers.
I want folks to buy a house. But broke people shouldn’t buy a house. You really shouldn’t buy a house until you do some things:
1. Pay off all of your debt. This includes cars, student loans, credit cards etc.
a. According to the Federal Reserve and U.S. Census Bureau the average American household has $91,000 in debt.
2. Save 3-6 months of expenses for emergencies.
a. According to the U.S. Courts, annual bankruptcy filings have almost doubled since bankruptcy laws were reformed in 2005. Now there are one million bankruptcy’s filed each year.
3. Save 15%of your gross income toward retirement.
a. USA Today has found that 60% of the 77 million baby boomers will not have the means to retire to support their current standard of living.
b. 28% of Americans polled by AARP said they spend more time watching reality tv than they do planning for their retirement.
You might be thinking, “This will take forever!” No. It may take a few years but that is hardly forever. The average family that lives on a budget, and is intense about their finances can pay off their debt in 18-24 months. Take another year or so to save up your emergency fund and then you can put money away for retirement while you start saving up for a down payment.
Back to the tax deduction. First we have to fully understand what a tax deduction really is. For example, let’s say you have a $400,000 mortgage and you pay 5% interest. Your interest payments are $20,000 annually. Your tax on $20,000 would be $5,600. Basically, in order to save $5,600 in taxes, you are sending $20,000 to the bank and your CPA calls that a “tax deduction.”
If you need a tax deduction while you are saving to buy a house try this. GIVE MORE MONEY. Yes, that’s right. Increase your charitable giving. It has the exact same effect.
To read more articles and to find out more about Financial Peace University email me at Alex@ChinoHillsMortgageMan.com or of course you can respond to this post.