Financial Survival Kit

What do you need to be prepared for the future financial turmoil? How can you survive?

Should I Buy Gold?

It seems like everyone is a gold bug these days, but is it the right thing for you?

What Are The Chances?

With all this "end of the world" hype going on, maybe we should consider the chances. What are the chances of a civilization threatening event?

How Much Insurance Do I Need?

Insurance is an extremely broad topic. Hopefully this generalization on the different types and amounts will help straighten things out a bit.

Iraqi Dinar: Scam or Scoop?

Some say it's an easy way to make a million bucks! But do you understand currency markets enough to take advantage?

The financial world we live in is just as wild, if not more, than the mountains and woods we walk through. We are told that the fundamentals of our economy are strong, but we can feel that something is wrong. My unique financial background and survival passion make Financial Survivalist and excellent place to learn and share.

Thursday, September 27, 2012

Pending Home Sales Dip in August

Pending homes sales dipped in August. Ask me if I am surprised? I look at the market statistics for Utah every week, and I knew inventory was down. Homes were selling faster than they were coming back on the market.

This is mainly because the banks have temporarily slowed their forclosure rate. They were sued over the "robo signing" incedent, they can now keep the properties as rentals, and there are several government housing programs to try stop forclosure. When the number of forclosure sales slows like it has it greatly affects the inventory on the market.

So what does this mean? Lower inventory means a "sellers market." Multiple offer bidding situations are very very common now. In fact, if you don't get multiple offers you may be over priced. Now is an excelent time to sell. Prices in Utah are up for the past 4 months.

I feel this situation is temporary. Forclosures will speed up again. Inventory will begin to come back onto the market and this temporary "sellers market" will be over.

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Wednesday, September 26, 2012

Howard Stern Man On The Street

Howard Stern had someone go out and interview some idiotic Obama supporters on the street. The level of ignorance is outstanding. Granted, I'm sure the sample was skewed. There are conservative idiots too.

However, I wonder if we polled all the idiots, if we would find more conservative idiots or Obama idiots? I venture to argue that the conservative argument requires a certain degree of intellect and understanding.  I would wager large amounts of money that there would be more Obama idiots. After all they say, "If you are young and a liber it means you have a heart. If you are old and liberal, it means you have no brain."

Just to be fair I posted the video by Alexandra Pelosi featuring Stupid Republicans.

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Monday, September 24, 2012

The Road We Are Traveling

America is headed in a specific direction. Do you like where we are headed? Do you know what your children's lives will be like in 5, 10 or 20 years? I think we will arrive at our destination and I KNOW we will arrive sooner than expected. Don't believe me? You should study more history, because it repeats itself. When you study history it is obvious where we are headed.

Where We Are Headed:
  • Financial Crisis: We've been there, we will be there again. When we are it will be worse.
  • A Real Run on the Banks: Some European countries are already experiencing massive amounts of withdrawals. It happens when people don't have faith in their banks, gov't and or currency. Possible here? I think so, but not yet.
  • More Bailouts, More INFLATION: the Federal Reserve is already printing money at the rate of $60billion per month for an indefinite period of time.
  • New Money: There are some reports that a "new dollar" is already printing. Massive amounts of cash are being distributed. The people running the show know what is coming and are preparing.
  • Revolutionary Movements: Occupy Wall Street, Muslim Brotherhood, Anonymous, Fabian Society, George Soros, "The Coming Insurrection"... should I go on? 
  • NATIONALIZED HOUSING: This is the one that scares me, but the "housing is a right" argument has been used before to justify many things. This won't happen until total collapse and revolution.
  • Wage/Price Controls: "It's to control inflation!" This also has been used before here in the United States!
  • Work Armies: "It's your duty." In order to guarantee you will always have work you must give up your ability to choose what that work is. Thank you Marx.
  • No Taxes or Inflation or Depressions: They will make this promise and try to follow through by controlling everything. They will fail.
  • High-Tech Feudalism: Big Brother is watching already! Homeland Security Act, cameras in public areas, police radar that can see through walls, etc.
  • Education as a Tool For Human Engineering: U.S. Department of Indoctrination (Education) has been going on for years. 
  • Regionalism as a Transition to World Government: UN

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Basement Bathroom Remodel

The picture says it all. I had to do something about it. I tore out the tub, surround, floor, toilet, and put in a new tile shower, tile floor and toilet. Now you know why I've been so busy. First video of three below. Take it for what it is.

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Tuesday, September 11, 2012

Where Were You September 11?

Every so often there is an event that is etched so deeply into our memories that we will not forget. Pearl Harbor, JFK assassination, and September 11 terrorist attacks on the World Trade Center.

I wasn't alive for the first two, but I remember the last. I will always remember that FREEDOM is fragile and as there is evil in the world, there will always be enemies of freedom. Those wanting to destroy it.

Those enemies may be terrorists, anchormen, or  politicians. They are everywhere and we must always stand firm against them. Always remember September 11. Always remember YOU ARE FREE!

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Monday, September 10, 2012

Laffer Curve: Why Raising Taxes Won't Balance the Budget

The Laffer Curve is a principle that at some point tax revenues begin to decrease as you increase tax rates. The reason is that income is the incentive to work and make more money. The more the government taxes, the less incentive there is to work and make more money.

You might think, "But people need money?" or "A little money is better than no money!" But the Laffer Curve is economic fact. The only question is at what tax rate does tax revenue begin to decrease?

According to the research done by some of the countries most influential LIBERAL economist, that rate is 33%. Raising taxes above 33% will actually decrease the governments tax revenues. Therefore, raising taxes on the rich WILL NOT balance the budget. In fact it will DECREASE tax revenue and increase the deficit. 

However, the people in the country that are currently paying less than 33% may be taxed more in order to increase tax revenues. In fact a flat tax of 33% may maximize the possible tax revenues of the government. Though I am an advocate of a flat tax, I am also an advocate of decreasing expenses and would prefer a flat tax closer to 20%.

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Friday, September 7, 2012

Why The Fed Isn't Worried About Inflation

I've been thinking a lot about why the Fed is so willing to print money (ie quantitative easing).  Essentially, there are 3 reasons they are not worried: money supply, velocity of money, and wage deflation.

1. Velocity of money, how quickly money moves through the economy, has to be high for inflation and it is really slow right now.

2. The money supply was extremely decreased by all the debt discounting and write offs that happened as a result of the housing crisis. A decrease of the money supply leads to deflation, which is really bad. To counter that they are printing money.

3. The average median household income has dropped almost 10% recently. This is very bad. When people make less, they spend less. When people spend less there is less money in circulation and that can lead to deflation (ie bad).

The fed isn't worried, and I am not worried, about inflation in the short term because it isn't likely to happen. It's more likely we see a deflationary period that can be very damaging to the already weak economy.

Long term the fed thinks they can take out the extra money by selling the debt they have been purchasing. This is only possible in pristine economic conditions that are not likely.

It is more likely that in the long run quantitative easing will cause more economic woes than it has prevented. It has always been this way, and as they say "history repeats itself."

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Thursday, September 6, 2012

Real Estate Commissons

A lot of people think Real Estate commissions are out of control! Think about it; a standard commission paid by someone selling their home is 6%. That means a $100,000 home would cost $6,000 to sell. A $300,000 would cost $18,000. A $500,000 would cost $30,000. That's a  lot of money!

Let's take a moment and look at where those commissions go:
1. Photographer - any decent agent is not going to take the pictures themselves. They will hire a professional photographer to get the job done right. The majority of buyers start their search online and good photographs make the difference.
2. Sign Fee - Yes the signs cost money and most agents have to pay for their signs. If they don't put them up themselves, they pay someone to put them up and take them down for them.
3. Transaction Coordinator - there are a lot of papers in a real estate purchase. These papers are to protect you. If you do a real estate purchase and there is less paperwork than when buying a car, you might be in trouble. A transaction coordinator makes sure all the paperwork is in order and copies go to the people that need them.
4. Transaction Fee - Brokerages often charge a basic transaction fee to the agent for essentially "legally" supervising the transaction. It's a base fee regardless of the size of the transaction.
5. Broker Split - A broker split is a % of the commission earned by the agent, paid to the broker for supervising the transaction.
6. Buyer's Agent - if the agent listing the home isn't the one that found the buyer, the commission is usually split between the two 50/50.
7. Lock Boxes - Supra boxes will actually keep track of who enters the home, when and how often. It is a good indicator to help in the sales process. You can also control the time people are allow to enter etc. It is an excellent tool and it is expensive.
8. MLS and Licensing Fees - here in Utah it costs about $2k to get your license. Every two years the license has to be renewed.
9. Business Expenses - many agents have to pay for all of their business and office supplies and expenses.

Don't think an agent on a $100,000 transaction will pocket $6k, or on a $500,000 transaction will pocket $30k. It's not going to happen. In fact, because of the costs a lot of agents won't take listings under $100k. Do what you want to pinch a penny, but I earn my commissions.

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Wednesday, September 5, 2012

$16 Trillion in Debt!

I remember when I was freaking out over $15 trillion in Bloated Government Debt. Now we are at $16 trillion? This is insane. Just to give you some perspective of how big $16 trillion is.

1 million seconds = 11.5 days.
1 trillion seconds = 31,709 years.
16 trillion seconds = 507,344 years!

I think that says it all!

Government cuts are not a moral issue, they are a inevitable necessity. Either we make cuts and get our spending in check or we all go down the drain and we can't help anyone!

But wait! We can raise taxes! Ever heard of the Laffer Curve? Raising taxes doesn't work! However, every time the government has lowered taxes, every time, tax revenues have increased.

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Tuesday, September 4, 2012

When Good Deals Go Bad: Tittle Issues

A lot of people think that they don't need a real estate agent. That's because they don't know what can go wrong. Paying a small commission can save you a lot of money WHEN GOOD DEALS GO BAD.

When buying "Dream House" everything went smoothly. Inspection, financing, docs, etc. Except for one little title issue.

When you sell a house you are responsible to provide a clean and marketable title. If you still owe money or don't even own the house completely, it has to be cleared up before or when the house is sold. The seller's agent chooses a title company, and the title company makes sure it's clean and clear.

The buyer's agent used a different title company that actually did it's job. Apparently a 20'x300' strip of the property for sale had never been deeded to the current seller. Essentially, the sellers unknowingly had been using and tried to sell property they didn't ever own...Yes. It happens.

The seller's title company refused to communicate with the seller's title company. They insisted they could and had cleared title.

At closing the buyer's title company insisted on seeing how the seller's company cleared title. Turns out the seller's title company didn't even know about the problem and never checked if they did.  Suddenly, closing was canceled and now the sellers were in default.

A Real Estate Purchase Contract (REPC) is a bilateral contract. That means that both the buyer and the seller are committed to the transaction. The buyer has to buy and the seller must sell, with certain exceptions. If the buyer doesn't buy, the seller keeps the earnest money. If the seller doesn't sell, they must match the earnest money. In either case, the defaulting party may be responsible to pay agent commissions as well.

In this case, the seller could not provide clean title. They would be responsible for matching the earnest money, commissions, and some repair costs. In total almost $20k. All because the agent used a bad title company.

The seller's agent blamed the buyer's agent, but the fact is that it was the seller's responsibility to provide clean title. Luckily, the buyer's agent was amazing. He convinced the seller's agent to tell the seller's title company that they needed to honor their commitment to insure. They insured despite the title defect and the transaction was completed.

Long story short, if it wasn't for the buyer's agent, the sale wouldn't have happened. The seller would have been on the hook for $20k, and no one would have been a winner.

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