The business portion of the budget is not a zero-based budget but a more conventional one with the ability to indentify and predict multiple income types. To make things easier for you I recorded a screencast that takes you through the basics of how to use it.

It is not a fancy spreadsheet by any means. It is a simple and straightforward way to keep track of what you hope to achieve. I have found that despite all the fancy budgeting solutions available today I keep coming back to my tried and true Excel spreadsheets.

Check out the YouTube overview below or view it on YouTube.

Download the Zero-Based budgeting with Business Budget spreadsheet here

I want to understand the world economy. I want to understand the United States economy. I think it’s really important to understand why we’re in the global economic crisis we’re in, how it affects the U.S., and our role in the debacle. The problem is that trying to learn what I want to know from the typical resources is akin to eating sawdust or yanking my teeth out very slowly and with a rusted pair of pliers. Ouch!

This is where NPR’s Planet Money podcast comes in.

First off, let me say that I’m not a raving fan of NPR. I mean, I appreciate the effort they put into their news and weekend programming but idealogically I differ in some key areas. I’m only telling you this so you don’t think I’m some sort of shill for NPR. But this program, Planet Money, is excellent for us non-uber-economist types.

With Adam Davidson at the helm the Planet Money team tells the “story” of our economies in an engaging, entertaining and easy to understand way. They use clever auditory props that simplify convoluted topics like Credit Default Swaps and Credit Default Obligations, how the central bankers spend the world’s savings, and what the current banking crisis means to the little guys like you and me. Before long you’ll have an amazingly informed view of how and why we’re in our current situation and what the result of our government’s economic machinations may produce.

So don’t walk, don’t mosey, RUN to Planet Money’s website and/or podcast page in your itunes application on your computer. Then come back here and tell me what you think.

Planet Money Podcast

You can also listen on page at the Planet Money website

Spending without a budget.
Carrying a balance on credit cards.
Ignoring interest rates.
Not investigating disability insurance.
Failing to see how little purchases add up.
Not matching employer’s contribution to retirement.
Waiting until the last minute to fund IRA.
Paying everyone else, saving “what’s left.”
Not managing your investments.
Getting emotional about your investments.

The article describes each no-no in depth so go check it out.

Full Article at MoneyCentral

Subprime lenders, or lenders to people with poor credit ratings, were slammed Monday, with the top five each losing more than 25 percent. Recently, major financial institutions such as HSBC Holdings PLC have been taking writedowns on mortgage loans as a growing number of subprime borrowers are delinquent or in default…. full article

Quickly, let me break down what I’m saying:

Will it make me rich?
It can. If you make the right decisions. (which I will outline below) This is the most promoted aspect of a life of real estate investing. I don’t, however, think this is the reality for most people who get into real estate. We’ve all heard stories of the family member or friend who purchased a home and sold it six months later for significantly more money than they paid for it. We’ve seen Donald Trump’s – ahem, gaudy – penthouse and the bevy of buildings named after him. We believe the mythos of the “rich as king Midas” real estate investor who wipes his rear with the hoards of cash he generates from every flick-of-the-wrist deal he does. This is all part of the average person’s understanding of what real estate means to us. But don’t get me wrong! I’ve never seen so many people get “rich” so quick as they do in real estate. But here’s the rub: It’s just not (and I mean this) as easy at it might seem. It is a real business that needs to be run like a real business! Most people will become real estate agents to get into the game. Did you know that in one of the hottest real estate markets in the history of the universe (Phoenix, AZ) over the last five years, that the average agent’s commission actually went down? Yes, it’s true. A plaque on the wall does not a rich person make. (The average commission in 2005 for an agent with two years of experience was approximately $13,000!)

Will it make me bankrupt?
Well, maybe. But don’t focus too much on obvious downside of being entrepreneurial. Here’s a typical bankruptcy scenario: Joe goes to a real estate seminar. Joe learns that rental properties make people rich. Joe buys 5 properties at market value assuming they are going to appreciate in value. (He’s even willing to lose $50 per month per home) Joe’s interest only loans adjust up or one of his properties needs a new roof but he’s completely leveraged out. Joe goes bankrupt.
There are, of course, numerous ways to lose your shirt in real estate but that’s the most common.

I’m going to skip the “will it help me just barely get by” to outline my secrets (wink, wink) to real estate success.
They are very simple:

PAY NO MORE THAN 65% OF TODAYS REALISTIC VALUE FOR THE PROPERTY
This means that if a property is worth $100,000 to everyone else you’re only going to pay $65,000
Sounds impossible doesn’t it? People usually give me a blank look at this point.

ESTABLISH DEMAND EVEN IF YOU GET THAT KILLER PRICE
It doesn’t matter if you can get something for 65% of the marketable value if there’s no one to buy it. Another important parameter is “absorbtion rate”. For example: If 100 homes sell a year in an area and there are 300 on the market in that same area, I’m probably not going to add to the mess by putting another home on the market.

HAVE A SOURCE OF PATIENT FINANCING
If you can find those 65% deals you should have no problem at all lining up financing. But here’s the important point: Try to ensure that they’re not going to come knocking if the deal goes long or the market changes on you. You want a financial partner instead of a pure play lender. (Even if all the contracts and documents suggest that they are just a lender.)

I have made a lot of money following these basic rules. Successful ventures should not be mysteries. They are usually a product of following some basic rules like those outlined above.

I’m going to offer an hour or two of free consulting to the first 3 people that respond to this post with a comment.

The negatives of consumer debt could go on and on. But the question is a very valid one because it tells us about financial motivations. Once again, why are you in debt? And, do you want out?

…and rates are rising, there’s the potential for a lot of heartache. So says a report from ACORN, the national community advocacy group, titled “The Impending Rate Shock.” It pointed out that about 75% of subprime home loans were ARMs. Folks who likely aren’t flush with funds face steeper housing bills in the near future, according to the report: “Rate shock could mean a sharp increase in foreclosures in some of the urban and minority communities that most need to build wealth through homeownership….” Plenty of others are affected, too — roughly 24% of all home loans nationwide are ARMs.

Full article here

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Story
A Juicy Empire

Technorati Tags: Finance, Investing

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I recommend using an ING Direct account to put your savings in. ING is currently paying over 5% interest (which is about 4.75% more than your bank will likely pay you in your savings account.) and it’s easy to set up and use. One nice feature is that is takes a couple of days to transfer money back and forth. This can keep you from spending your money on impulse but won’t keep you from using it in emergencies.

Begin saving at ING Direct

Technorati Tags: Budgeting, Debt, Finance, Finance Tools, Investing, Retirement