Satori Alliance | Financial Counseling | Real Estate Investment Products | Financial Guidance Seminars

First, let me say straight up ”I love what I’m doing”, AND the recipe for developing my skills at Internet marketing and E-commerce has not been a simple one, although it sure was supposed to be according to all I’ve read.  I have spent nearly 1 year assembling the ingredients learning and producing the structure I’m finally using, and at great personal and monetary expense.  My wife is completely frustrated and doesn’t understand anything I’m doing saying “I just don’t see products like in the stores.”  My point, had I known, had someone told me it would have cost me this much to open the door to begin receiving business, I would likely never have begun.  I kept preparing and believed in the feast.

This meal started with a hunger, a desire to build my own business supporting those who needed personal financial literacy training.  A dream of mine for over 20 years, I had little idea how big the demand would become.  To this recipe was added a declining Silicon Valley real estate investment appetite in late 2007 combined with a pound of sub-prime loan failures in early 2008 and the stage was set for an almost certain flop.   I kept preparing and believed in the feast.

Tim Ferris in his book “The 4 Hour Work Week” has whole sections on how simple it is to develop a product, test it, sell it, and profit for life.  I’m the first to admit I was hooked.  That was a feast I wanted for myself and my family, and while I was at it my ideas were so good I figured I’d feed a few others.  I kept preparing and believed in the feast.

I just completed with a coaching client today and will have my last session with them tomorrow.  He is 65 years of age, a successful CEO retired from his business and in just about the same spot I was in one year ago.  Our work was to get his personal and business goals identified and prioritized for him to move forward on what ever business is next which will include the Internet and E-commerce.  I gave him my best and how to avoid what delayed me, and shared with him a way to prepare and believe in the day of the feast.

Well, just like Thanksgiving which most of us will enjoy in a couple of days, the feast is almost on the table and will be enjoyed.  In spite of all the preparation, in spite of it’s cost, and in spite of all else I could have been doing, I will taste this feast of financial freedom and guess what - just like Thanksgiving next year, I’ve got plans for the next feast and am preparing.  I know it will take too long, won’t go the way I think it will, and obstacles will be encountered because that is the life we enjoy, it’s the journey & not the destination we’re after.  So I will continue to prepare for enjoying the next feast.  How about you?

They really are and also notoriously inefficient.  Factor this into soaring energy costs, and you’ve got a good reason to transform a drafty fireplace into an efficient heating source.

What makes traditional fireplaces inefficient?  Hot air rises, thus much of the air heated by the fire escapes through the chimney.  When a fireplace isn’t in use, the draft pulls conditioned air from your home making your heating system work harder and energy bills rise.

How can you improve fireplace efficiency?  Take measures to reduce heat loss via the chimney and to direct more heat into your home.  Here are a few strategies:

Dampers:  Most fireplaces have a throat damper - an iron plate that controls airflow.  When the fireplace isn’t being used, keep the damper closed.  And consider replacing it with a top sealing damper which mounts at the top of the chimney and seals tightly to eliminate drafts.

Firebacks:  A cast iron or stainless steel fireback on the rear fireplace wall helps to radiate heat outward.  And firebacks usually feature decorative designs that can enhance your home decor.

Doors:  Tempered glass doors with adjustable air openings help maximize efficiency when your fireplace is in use.  When it’s not, close the fireplace doors to keep warm air in your home.

Grate Heaters:  These units are alternatives to conventional fireplace grates.  They pull in air, heat it, and blow the heated air into the room.  Some are even equipped with thermostats to automatically turn the fan on and off.

Inserts:  Gas or wood-burning inserts are insulated systems that burn more efficiently and create greater heat output.  Note: The EPA recommends that you have a certified technician install a wood-burning insert.  Also check emission requirements in your area and have your chimney inspected and cleaned before installation.

As always, I appreciate the opportunity to provide energy-saving tips.  This edition happens to arrive on a spare-the-air day so don’t experiment with burning today.  Boost the efficiency of your fireplace so that it generates increased warmth as well as holiday ambiance at a lower cost too.

Thank you to a long time colleague Steven Larson for the inspiration for this post

Thank you for reviewing this and for your comments.

I am a LinkedIn member, have nearly 1,300 front line connections and 11,000,000 total.  I have had a 30+ year career instantly displaced by the recent down turn in the economy.  Fortunately I took action quickly and am now leveraging those years to help others who may be in financial difficulty in these times. 

In the months to come, employment or a job may not be sufficient to survive.

My questions is this:  I’ve started a continuity group supported by 14 Tele-course calls on personal finances from the basics of budgeting clear through effective retirement planning.  See my profile and this link - Don’t Let Your Finances Ruin Your Personal Life. 

I’ve noticed people will readily discuss their financial situation and most specifically how poor it is, how much they would like it to change but when offered the opportunity to make something happen to change it, nearly 95% of the population stop short, don’t engage, and continue their bad habits and to suffer nedlessly. 

What ideas do you have that would made a difference for yourself, something that would have you take action, learn even the basics of how to get exactly what you want from life, even in times like these?

Again, Thanks - Dan

Caught it! - Now What?

On this the first day after Barack Obama was voted our 44th president, the questions and assertions are flying.

All the way from speculation about massive deflation followed by epic inflation, to the black community’s shining enthusiasm, to the client who now believes he should sell his investment properties.

What will happen next and how will we know?

Do we tell our extravagant spendthrift children that the gravy train has left the station, not to return for year?  OR, is it time to sit in the recliner & discuss with the family how there will soon be health care for all?

Nobody can really say though everyone is sharing wildly today.

Personally I believe life will go on.  And without dramatic differences as many believe.  We will have all our usual breakdowns and concerns about our finances, our families, our relationships, and all areas of our life.  Then there will be all the conversation that continues to give us hope for the future that things will get better, - or worse, which ever side of a topic you are on.  And that’s really the whole point!

It really will go the way each of us says it will go and what we rally for, just like we did to win this elections.

I have historically voted to the right side of issues but this time, well, it seems it’s time for a change, so now -

Lets see how this dog and his pack hunt!

Everyone with one of these loans should make this choice:

First, ARM is an acronym for Adjustable Rate Mortgage.  The most popular form of these loans was and still is referred to as a hybrid which means it combines both fixed and adjustable terms.  Hybrid’s have an initial fixed portion of 3, 5, 7, or 10 years, then the loans converts to the adjustable portion, changing every 6 months or 1 year thereafter for the remaining term of the loan which is typically 30 years.

Some lenders sold these products as fixed rate loans, never discussing the adjustable portion with their clients.  These clients, believing they have a fixed rate loan, may be in for a shock.  But will that shock be a bad one?

Many consumers got one of these loans knowing they had the first few years as a fixed rate, planning to either move, move up or refinances.  All of these options assumend a new loan which everyone figured would be available and likely at the same or slightly different rates.  Currently, both of these choices can’t be easily done and likely won’t be for 1-2 years.  Again a shock to the Silicon Valley mortgage holder.  But will that shock be a bad one?

Al purchased a property in July of 2005 using a 5-1 ARM.  His loan balance was $656,000, his interest rate was 5.75%, he has a 10 year interest only payment option which many of these loans had, and he has no pre-payment penalty.  His plan was to take some of his equity, improve his property then sell it to buy a bigger home for his expanding family.

Al now has a breakdown! the improvements were completed in 2006 about 1 year after he got the loan.  He planned to sell in mid 2008.  Well that didn’t happen and Al is now looking at what to do.  His loan rate will reset in July of 2010 to what ever rates are at that time according to the terms of the adjustable rate portions of his loan.  His questions is should he reset or refinance now to avoid an uncertain future.

What Would You Do?

1. Refinancing now, closing before the end of 2008, Al will get a 30 year fixed rate loan with full payments for about 6.375% an increase in monthly payments of about $1,035.
2. Refinancing in January 2009 Al will get the same loan at an interest rate of about 7.25% with a payment increase of about $1,417.
3. Al Could keep his existing 5.75% for another 20 months & take his chances when the loan Resets on getting the same or better rate in the adjustable portion.  His loan has a 1 year treasury index whose value is currently 1.91, his loan has a margin of 2.75, and these two added together equal 4.66% which is where his rate would be if it adjusted today.

For these types of loans the most popular indices are:

• LIBOR - 6 month = 3.23%, 1 year = 3.34% - - 60% of US mortgages have this index
• Treasury Securities - 1 yr CMT = 1.91%, 12 month MTA = 2.47% - - 25% of US mortgages have one of these index values
• COFI & other regional bank issues - COFI 2.69% - - 15% of US mortgages have these index values

The vast majority of Margin values are:

• Prime loans or A paper = 1.875% - 2.75%
• Sub-Prime or B & C paper = 3.25% - 4.75%

There are other terms of your loan, your life, and the economy which must be considered when evaluating whether to refinance or reset like interest rate caps and pre-payment penalties.  The costs of refinancing, your goals and plans for the future, stability of your credit and you employment, and most importantly what the expectations are for index values should also be considered when making these choices.

Al decided to refinance now and here’s how he chose:

1. He’s guaranteed to get a fixed rate loan below 7%
2. He is not paying costs out of pocked, they are all included in the new loan preserving cash
3. His current job is secure and he is mildly concerned about the future of his company which could negatively impact his qualifications to get a new loan
4. He is concerned his home may drop in value making it impossible to refinance
5. Index values are low right now but as the economy recovers and expansion takes hold, they will rise, increasing the risk he will pay higher rates when his loan resets.
6. Even though Al considers himself aggressive in taking risk, he felt that now is a time to adopt a more conservative approach with so much uncertainty at hand.

The San Jose Mercury ran an article last week about these mortgages that is worth reading. To see it click here

To learn more about or see current index values & their movement see Mortgage-X

If you’re concerned about your situation, put it in a comment or drop me a line Contact Dan