Robert G. Yetman, Jr.

Apparently, Only Lenders Are to be Held Accountable for the Crushing Real Estate Collapse

According to a press release issued recently by the office of Martha Coakley, the Attorney General for Massachusetts, Royal Bank of Scotland will pay $52 million to the Commonwealth for its part in bringing the global economic crisis to the doorsteps of homeowners.  Specifically, the pursuit of RBS was on the basis that it “financed, purchased, and securitized residential loans that were presumptively unfair.”  The release goes on to say that “AG Coakley’s office has been a national leader in holding banks and investment giants accountable for their roles in the economic crisis.”

Just what were the features of these loans that made them “unfair?”  Introductory periods and “teaser” rates that Coakley found objectionable, as well as liberal debt-to-income ratios and substantial pre-payment penalties.

Sorry, no sale.  Those "teaser" rates, prepayment penalties, and other features Coakley characterizes as "unfair," while gimmicky, for sure, were nevertheless  fully disclosed to borrowers who were thinking about little else besides, "more, more, more," despite what the grandstanding regulators want you to believe.  As for the aforementioned “roles” of banks like RBS in the economic crisis…just what were they?  Making funds available to aggressive borrowers on the basis of asinine Fannie and Freddie underwriting standards?

While the issues are by no means uncomplicated here and there is plenty of blame to go around, as I have said previously and will say again, seeing banks like RBS strong-armed into coughing up millions upon millions while the government's social engineers, who had a very large hand in precipitating this calamity, are allowed to somehow change position in the relative blink of an eye and now reconfigure themselves as advocates for the economic well-being of the citizenry, is a travesty. 

Agree or disagree; please register your comments below.

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Bob Yetman, Editor-at-Large at Christian Money.com (www.christianmoney.com), is an author of a variety of materials on personal finance and investing, as well as on topics of fitness and self defense, to include the book Investor's Passport to Hedge Fund Profits (John Wiley & Sons, Inc.) and the unarmed combat training DVD Thunderstrikes - How to Develop One Shot, One Kill Striking Power (Paladin Press).  He is also the Managing Editor of the Biblical Prophecy & Survival Report.

In Business, Assume Any Email You Write Will Be Read by the Wrong Person

Years ago, I ended up in embroiled in a hassle with a customer in a separate business venture because of an unfortunate path taken by an email I had written.  The condensed version of this is that the company with which I was working as an independent contractor had received a complaint about the way I had spoken to this person, as well as about my general approach to servicing this individual.  The background (admittedly, my side here) is that the customer was one of the most extraordinarily difficult with whom I’d ever had the displeasure of working in all of my years as a professional, and I will confess that my demeanor and decorum, while certainly not poor (again, in my own opinion), was not what it normally is. 

Anyway, one thing led to another, and my supervisor in all of this asked for an email from me so that he could get my take on the whole matter.  Understanding that this was to be a sharing of private thoughts between the two of us, I used the opportunity, in part, to vent, in no uncertain terms, about the difficulties I’d been having with this person.

What do you suppose he did next?  He forwarded the email to the customer directly – not intentionally, but carelessly.

What followed was a full-blown firestorm, as you can well imagine.  Now, I could blame that supervisor for having done something so stupid as to have, quite mindlessly, forwarded an email without review (yes, he later admitted he didn’t even read it) that he knew full well was intended as a private communication between the two of us.  The truth is I’m still a little irritated at him for having done what he did, as inadvertent as it may have been; he had a well-deserved reputation for being a bit too laid-back, so it was perhaps in keeping with his inattention to detail that this happened.  HOWEVER, in the light of day, and after all amends had been made and lots of pride had been swallowed, I had to admit that the root cause of all my problems here was that I had chosen to put what I did in an email in the first place.  What I should have done, even when he was asking for my thoughts in a forum that was ostensibly between the two of us, was to pretend that the customer would eventually read the email (which obviously happened, anyway).

I had learned my lesson, and learned it the hard way, which is sometimes the best way.  In business, you will always come across that occasional customer who is exceedingly difficult – it happens; and there is nothing unnatural about even harboring a few hard feelings toward that person.  Doing so is surely not in keeping with “the better angels of our nature,” as termed by Lincoln, but it is a perfectly understandable, human way of being, given the circumstances.  However, at no time should those hard feelings ever see the light of day in a business forum of any kind.  Nothing constructive ever comes from their expression, while a lot that is destructive can.   

The other thing you have to remember is that, in this day and age, your communication may easily come to be viewed by more than just the offended party.  The recipient may decide to forward your email to lots of other places, or post it somewhere public, or otherwise use the evolutions of the digital age to bring a lot of attention to just what a horrible person you at least appear, by virtue of that email, to be. 

Problems like that on a personal level, while distressing, can pale in comparison to what the offenses can cost your business.  As (fairly) smart and as disciplined, and even as usually decorous as I can be…I’m still human, and in the end, being human is something we have to guard against, as much as embrace, in the workplace environment.

Agree or disagree; please register your comments below.

Follow me on Twitter at www.twitter.com/robertyetman.

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Bob Yetman, Editor-at-Large at Christian Money.com (www.christianmoney.com), is an author of a variety of materials on personal finance and investing, as well as on topics of fitness and self defense, to include the book Investor's Passport to Hedge Fund Profits (John Wiley & Sons, Inc.) and the unarmed combat training DVD Thunderstrikes - How to Develop One Shot, One Kill Striking Power (Paladin Press).

Saving Oneself by Moving to Greener Pastures

There are a lot of reasons why jobs are presently evaporating in the United States..most evil, some not so much; uncooperative corporate tax rates, a government that works daily to foist a globalist view on Americans, and companies that are all too happy to shore up their bottom lines by moving overseas (moves that are, admittedly, sometimes influenced by aspects of the aforementioned) are but a few of the more insidious reasons for the mass disappearances, while the ongoing technological evolution that allows companies to continually do more with less is an example of reasons that are impactful but not necessarily rooted in ideological agendas.

That said, immediate, personal survival becomes our most pressing consideration when it’s at stake; the grander issues have to be addressed, as well, and sooner rather than later, but if we’re not able to function at the individual level, none of that can be prosecuted.    

I largely agree with the idea that a pronouncement, made to all those without jobs currently, to “simply” move to where the jobs are, is unrealistic, but also less than accurate is a generalization that no one can move to where the jobs are, either.

There will always be people who cannot make such a change, for a variety of understandable reasons: poor health, inability to sell a home, and a variety of other factors that serve as weighty anchors to one’s present location.  However, we all know full well that are also plenty of other people who do have the wherewithal to make a such a move…and yet the serious consideration to do so never enters their realms of consciousness. 

What do we like to say is the definition of insanity?  That it is to do the same thing over and over again and expect a different result?  Well, if you live in a given area, have a given background, a given education…and none of those things changes…why would you expect to be any better off in three months, or six months, or even two years, than you are today?  As for the risks associated with taking such a step, those have largely been mitigated in the Internet age; the ability to research prospects, communicate with people and firms, and even interview live through web-based technologies, all before even pulling a single suitcase down from the attic, has significantly lessened many of the uncertainties once intrinsically associated with making such a move.  

Over and over again, we see families that actually have the ability to move but do not even consider it, because they “have no desire to uproot kids,” they “love their friends and neighbors,” they “can’t imagine leaving,” etc.  Noted; however, by no coherent metric do those considerations outweigh the need for absolute survival, do they?

I recently spoke to a headhunter who specializes in the manufacturing management and engineering sectors, and she flat-out said there is a distinct manpower shortage she’s trying to fill in states like Nebraska, the Dakotas, and Minnesota.  They are not, by any means, what any of us generally think of as the “glamour” states, but just what should the totem pole of priorities look like for a dangerously unemployed person?      

Economic relocation is not for everyone, and no sensible person would claim that it is.  Beyond that, it is offensive that so many even have to consider that prospect, given the grander-scale reasons why we’re in this mess.  That said, relocation is for some people, and in the interest of living today in order to be able to fight tomorrow, it can be an awfully good idea.

Agree or disagree; please register your comments below.

Follow me on Twitter at www.twitter.com/robertyetman.

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Bob Yetman, Editor-at-Large at Christian Money.com (www.christianmoney.com), is an author of a variety of materials on personal finance and investing, as well as on topics of fitness and self defense, to include the book Investor's Passport to Hedge Fund Profits (John Wiley & Sons, Inc.) and the unarmed combat training DVD Thunderstrikes - How to Develop One Shot, One Kill Striking Power (Paladin Press).

Tags: relocating+to+find+a+job

The Reality of Turning a Hobby into a Living

The other day, I tripped over another one of those articles that talks about real-life people who left their button-down, very corporate sorts of jobs to live the dream; that is, to be able to make hobbies and avocations about which they feel particularly passionate more than hobbies and avocations, and actually turn them into primary sources of income.  You’ve probably seen articles like that from time to time, and this one is easy on the eyes – lots of pictures, with brief write-ups about each of the principals mentioned.  You can find it at the online home of Outside magazine, which I happen to enjoy very much.  Here’s the link to it:

http://www.outsideonline.com/outdoor-adventure/best-jobs/How-I-Did-It.html

These kinds of articles are fun to read, and can even be rather inspiring for some, but the important takeaway  that people too often miss is that those who are duplicating the success they had in their previous lines of work are doing so by continuing to bust their tails in their new ones.  At a core level, hard work remains hard work, regardless of whether your minute-to-minute or hour-to-hour tasks are more enjoyable than those normally encountered throughout corporate America.

In my circle, I not infrequently come across the person who tried to turn his laid-back hobby into a profession but failed because he was ultimately incapable of divorcing his hobbyist outlook from the reality that what he’s now doing has to be able to pay that pesky mortgage.  While reading the article referenced above, there were two things that noticeably stuck out to me from the write-up on Cliff Hodges, the electrical engineer-turned-adventure outfitter: he has 20 employees, and he’s still working 12-hour days.      

I sometimes say that those who fell out from the conversion process bought into the myth of trading Sunday for Monday.  Yes, you can make a living as an adventure guide, a mountain bike coach, or a surfing instructor; however, prosecuting those interests as businesses on Monday is not the same thing as enjoying them recreationally on Sunday.     

What the subjects of the success stories noted in the Outside article “get” that not everyone else does is that there are certain immutable realities of being a viable, performing business that apply whether you’re spending a significant portion of your day behind a desk or on a surfboard.  Those that do see it are the ones who end up making it work, and my hat is off to them.

Agree or disagree; please register your comments below.

Follow me on Twitter at www.twitter.com/robertyetman.

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Bob Yetman, Editor-at-Large at Christian Money.com (www.christianmoney.com), is an author of a variety of materials on personal finance and investing, as well as on topics of fitness and self defense, to include the book Investor's Passport to Hedge Fund Profits (John Wiley & Sons, Inc.) and the unarmed combat training DVD Thunderstrikes - How to Develop One Shot, One Kill Striking Power (Paladin Press).

Tags: hobby+as+business

Has Law School Become the Ultimate Con Game?

Are law schools deceiving young, ambitious minds with the false promises of an ample job supply and high salaries?  It appears that might just be the case.  There is a growing backlash against law schools and what is deemed to be their insistence at deceptive advertising in order to enhance enrollments, and some graduates are even going as far as seeking formal redress against their alma maters.  For example, Anna Alaburda is a 2008 graduate of San Diego’s Thomas Jefferson School of Law and passed the California bar exam…a notoriously difficult bar exam, at that…on her first attempt, and yet has been unable to secure any full-time employment since graduation.  She is alleging that the law school misrepresented its claims of graduate employment rates by including part-time employment and employment unrelated to the field of law in its rates, without making any distinctions.  To add insult to injury, her complaint says that she accrued over $150,000 in student loan debt during her years in law school. 

There are numerous and seemingly well-substantiated accusations against law schools’ willingness to misrepresent both prospective salaries and job prospects for graduates in the interest of getting…what else...more students and therefore more student loan money; law school, as with higher education, in general, is very big business.  Here you can find a terrific New York Times story, published earlier this year, on just what a minefield a law school education can now be for students:  http://www.nytimes.com/2011/01/09/business/09law.html?pagewanted=1&_r=2

On the heels of that particular story comes the disturbing news that 2010 law school graduates, one full year later, are wrestling with terrible debt levels and equally terrible job prospects.  Indeed, according to data gathered by the Association for Legal Professionals, barely two-thirds of those graduates…one full year later…are actually in jobs that require the practice of law.  As a matter of fact, the overall employment rate of these folks, in any kind of job, is about 87%, which is the lowest it has been since 1996.  Making things worse is the enormous debt load these graduates are carrying; roughly 50% of them, by the time they left law school, were saddled with $100,000 or more in student loan obligations.

When I was a kid, the professional “gold standard” that was put before many young students was that of the lawyer and the physician; the intellectually-challenging and highly useful natures of the positions were two of the bases for thinking that way, but so, too, were the promises of secure employment and high compensation.  Now, especially for lawyers, those promises have been revealed as myths to all but a relatively few in present-day America. 

The law is interesting, even fascinating, and serves as the bedrock of civilized, well-functioning societies.  However, there are just too many lawyers now; something that was once little more than a jovial expression of frustration about how the legal process works has now become a literal truth, and is a resonant statement against the idea that the achievement of an expensive law degree is a guarantee to a better life.      

Agree or disagree; please register your comments below.

Follow me on Twitter at www.twitter.com/robertyetman.

Follow me on Christian Chirp at www.christianchirp.com/robertyetman. 

Bob Yetman, Editor-at-Large at Christian Money.com (www.christianmoney.com), is an author of a variety of materials on personal finance and investing, as well as on topics of fitness and self defense, to include the book Investor's Passport to Hedge Fund Profits (John Wiley & Sons, Inc.) and the unarmed combat training DVD Thunderstrikes - How to Develop One Shot, One Kill Striking Power (Paladin Press). 

Some Easy Ways to Spot a Scary Financial Advisor

As more Americans seek to venture back into the investing waters, they are doing so with perhaps more hesitancy and caution than in the past. Certainly one of the reasons for this is that the economic collapse taught many that investing in securities markets is not entirely a no-brainer, to say the least. For the previous few decades before trouble struck this last time, things were, for the most part, fairly reliable and productive; now, a person who is growth-oriented in his risk tolerance realizes he cannot simply throw money at any collection of companies out there and expect the kind of almost mindless appreciation that we came to see for so many years.

The other reason for the bit of trepidation is that the economic collapse uncovered a mountain of nefarious dealings on the part of (supposedly) regulated investment professionals throughout the country. We realized that shady con men in the world of investing could be very adept at presenting themselves and their companies in the most sophisticated, sober, and seemingly-trustworthy of lights. It was no longer easy to tell a bad guy from a good guy simply on the basis of a cursory look at who he is or how he worked. Given that, it’s worth a bit of an examination to see what you should be looking for when you think about hiring a financial pro to help with your investing.

Compare current marketplace returns with what your guy is saying you can earn with him. This goes back to that old adage that if something seems too good to be true, it probably is. In this case, what we’re talking about is learning to recognize whether a target rate of return proposed by your advisor is in keeping with what seems to be reasonable, based on how similar asset classes are performing throughout the market. For example, if you are a growth investor who knows you will be primarily invested in stock-based vehicles, look to see how key benchmark indexes like the S&P 500 have performed in recent history, and compare that with what your guy is saying. If a representative index is motoring along at an annualized rate of 8%, and your guy is suggesting he can beat that by a few percentage points because he’s going to employ this or that strategy, that is not necessarily a red flag; however, if he’s suggesting that he can double (or more) the return of a comparable benchmark, pay attention. That proclamation, by itself, doesn’t mean he’s a bad guy…it may just mean he’s supremely confident…but it should raise your antennae nevertheless.

Be VERY careful about dealings with advisors who “promise” or “guarantee” returns. It is generally against the law for an advisor to promise or guarantee a return, unless he has in place a hard-and-fast mechanism, vetted by regulatory authorities, to honor such guarantees. The simple reality is that securities markets themselves offer zero assurances of how they will perform in the future, so it is not possible for an advisor to guarantee a rate of return. Beyond that, if you combine this warning with the one mentioned in the previous paragraph, that is a sure sign of trouble; in other words, if you talk to an advisor who not only claims you can earn significantly more than a representative asset class benchmark, but guarantees that high figure…run like the wind.

Always check ‘em out. While conducting a background check on your considered financial professional does not mean that you will come to know everything you should, it’s a good component to include in the evaluation process. Before the Internet age, it was more difficult to learn about historical regulatory issues and other problems a financial advisor might have had, but with the mechanisms available through the online homes of regulatory agencies, you have an easy opportunity to look and see if your guy has had any dust-ups with previous clients or securities authorities. Here are a few places to look:

• North American Securities Administrators Association http://www.nasaa.org/about_nasaa/2062.cfm

• Financial Industry Regulatory Authority http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/

• U.S. Securities and Exchange Commission http://www.sec.gov/investor/brokers.htm

The good news is that it’s generally not as hard to spot a rat as one might think; even if he’s dressed in a silk suit, carries a briefcase, and maintains a luxurious office in a very public place, there are identifiable behaviors and traits that are common to most that make it easy to pick them out. If you are being quoted curiously high returns, promises of same, and/or note that your prospective advisor has had problems in the past, we would suggest that you resist your inclination to give him the benefit of the doubt…and just move on.

James L. Paris and Robert G. Yetman, Jr. 
Christian Financial Planner

None of the information contained in the above article is intended to be, nor should be construed as, a solicitation or recommendation to buy or sell any security, or engage in any financial transaction whatsoever. It should be noted that, at any given time, the author(s) may or may not own any of the securities or other financial products mentioned in this column. Furthermore, it is strongly suggested that you seek the advice of an appropriate financial professional before making any changes or implementing any decisions with regard to your personal financial profile.

Tags: how+to+select+a+financial+advisor

Loving the Workplace

There is a saying attributed to Al Davis, the eccentric, long-time owner of the NFL’s Oakland Raiders, that sums up his policy regarding the indulgence of individual expression on the part of his players: “Just win, baby.”  In other words, as long as his teams are winning, he is not concerned with the color cleats they choose to wear, how long they keep their hair, or anything else that might violate the more button-down policies enforced by other teams.

That sort of represents how I feel about a workplace that flies in the face of convention.  I have always believed that if you have a company full of adults…real adults…then those people can handle a work environment that makes concessions on behalf of quality of life, and if anyone in the group cannot seem to manage the greater freedoms and flexibility that come with that, the answer is to rid the company of that person, rather than configuring the workplace into something unfeeling, unbending, and even suffocating.   

Glassdoor (www.glassdoor.com) is a free website that offers visitors the ability to get an inside look at jobs, careers, and workplaces.  One of the more interesting pieces of information they’ve created is a list, compiled on the basis of votes from the employees themselves, of those companies that are best at balancing work with personal life on behalf of their workers.  The results of the 2011 survey can be found here:

http://www.glassdoor.com/Top-Companies-for-Work-Life-Balance-LST_KQ0,35.htm

Some of the names on Glassdoor’s list aren’t surprising, given that they’re companies that are a manifestation of more recent cultural and technological evolutions, and thus maintain a more “progressive” outlook on life and work: for example, Facebook makes the list, as does MTV.  However, a number of companies are those that have been around for a long, long time, and that provide goods and services of a more traditional nature – Chevron, Dupont, and General Mills among them.

In my capacity as a manager, I’ve always chosen to create a benevolently-managed workplace.  I see no compelling reason not to do so, and can instantly think of a lot of good reasons to do it.  Accommodating the basic family needs of hardworking employees, including the last minute crises that come up from time to time, is something I’ve always considered to be quite reasonable, and making that investment in my people always yielded great dividends in terms of productivity and loyalty.  Moreover, there’s no reason why the workplaces themselves cannot be environments from which the employees derive great pleasure and enjoyment during the day.     

In the end, I expect adults to be adults.  I have always managed people on an assumption made at the outset of the relationship that an earnest adult believes in working hard while he’s getting paid, knows right from wrong, and is replete with common sense.  In the rare cases I found myself with an employee who lacked any or all of those basic components, I chose to terminate the employee rather than change the enjoyable culture of our workplace.  Believe me…when you offer a workplace that is respectful, fun, and family-friendly…finding good people is in no way a difficult task.

Agree or disagree; please register your comments below.

Follow me on Twitter at www.twitter.com/robertyetman.

Follow me on Christian Chirp at www.christianchirp.com/robertyetman. 

Bob Yetman, Editor-at-Large at Christian Money.com (www.christianmoney.com), is an author of a variety of materials on personal finance and investing, as well as on topics of fitness and self defense, to include the book Investor's Passport to Hedge Fund Profits (John Wiley & Sons, Inc.) and the unarmed combat training DVD Thunderstrikes - How to Develop One Shot, One Kill Striking Power (Paladin Press).

Tags: small+business+management,+workplace+environment

Is the 30-Year Mortgage On Its Last Legs?

Financial planners and other prudent financial “types” have long held a grudge against the 30-year mortgage, and with good reason.  The (now) standard 30-year mortgage term has cost Americans, on the whole, unfathomable sums of money since they became, well, standard.  Banks have historically loved the longer-term mortgages because they ultimately put far more money into their pockets, and financial advisors have despised them for that same, exact reason.

Now, the very survival of the 30-year mortgage mechanism is at risk, thanks to the economic upheaval that we’ve all come to know so well.  Beyond the tightening of underwriting standards overall, Fannie Mae and Freddie Mac, the “government-sponsored entities” that have gone such a long way to fueling the American Dream of home ownership through their mission of implicitly guaranteeing mortgages and thus keeping them cheap and easier to obtain, are faced with the very real prospect of seeing themselves drastically reduced or even eliminated outright.  Should that happen, the cost of the mortgages would likely rise, and jeopardizing the only real benefit that mortgage term offers: the lowest payment available, in general.

This is good news, truthfully.  Although I believe the 30-year mortgage will remain among us in some form or fashion, as even without any government backing, the free market will keep it available for those who can pass the new, more stringent underwriting standards that will accompany it, the point is that it has always been a bad deal.  It has led people to pay far, far more for their houses than they should, and demands that homeowners wait years to build up any real equity because of how slowly the loan amortizes.       

Frustratingly, one of the reasons people have so quickly opted for 30-year mortgages is due to a simple lack of awareness of how the time value of money really affects a mortgage payment when the mortgage term is adjusted for varying lengths.  A lot of people are aware that the longer the mortgage term, the lower the monthly payment, which is pretty obvious because the repayment period is spread over decades.  So, right off the bat, “lower” always equals “better” for most people.  The Part B to this, however, is that when people consider the possibility of a 15-year mortgage instead of a 30-year mortgage, they make the mistake of assuming that because the repayment period is cut in half, that must mean the payment doubles.  It doesn’t.  It is certainly higher, but it is not even close to being twice that of the 30-year payment. 

Here’s a quick example.  If you buy a $200,000 house with a 30-year mortgage at 5.5% fixed, the monthly payment (principal and interest) is $1,135.  If you buy the same house with a 15-year fixed mortgage that’s priced at 4.5% (the interest rates on 15-year mortgages are often about a point less than those on 30-years), the monthly payment is $1,529.  Higher, for sure, but nowhere near double that of $1,135.  In fact, it’s about $400 per month more.  In exchange for agreeing to a monthly payment of $1,529 instead of $1,135, the buyer could own the home outright in half the time, and pay a lot less for the privilege.  How much less?  The $200,000 home, financed for 30 years at the terms noted above, will ultimately cost a grand total of $408,000 when it’s all said and done.  The same $200,000 home financed for 15 years at the terms noted will ultimately cost the buyer $275,000.  So, for an unwillingness to find a way to come up with another $400 per month, the 30-year buyer…the “standard” buyer…will pay an additional $133,000 for the same house over what the 15-year buyer pays.        

One of the silver linings of the recent economic collapse is that the population seems generally more aware about things like debt management, and how much debt costs in the long run.  More generally, we’re all, it seems, getting a just a little smarter about money and how it works, and less tolerant of the way things have been done for years.  This increasing consumerism is going to save us a lot of dough in the long run, and it’s high time that we look to applying this new outlook to the most expensive single purchase we will ever make.  Refer back to the example I cited above.  If you can pay $1100 a month for a house, then you can probably pay $1500; if you cannot, then it’s probably less a case that you absolutely cannot not, and more the case that you’ve decided to apply that additional $400 to something else.  Now you have to ask yourself this question: Is whatever I’m spending that additional $400 a month on now something that’s worth me taking an additional 15 years to eliminate my mortgage altogether, and spending another $133,000 more than I have to?    

Agree or disagree; please register your comments below.

Follow me on Twitter at www.twitter.com/robertyetman.

Follow me on Christian Chirp at www.christianchirp.com/robertyetman. 

Bob Yetman, Editor-at-Large at Christian Money.com (www.christianmoney.com), is an author of a variety of materials on personal finance and investing, as well as on topics of fitness and self defense, to include the book Investor's Passport to Hedge Fund Profits (John Wiley & Sons, Inc.) and the unarmed combat training DVD Thunderstrikes - How to Develop One Shot, One Kill Striking Power (Paladin Press). 

Tags: 30+year+mortgage

The Irrational Fear of Home Ownership

Seemingly, in every neighborhood across America, there are empty homes.  Empty.  What’s more, many of these homes have been empty for years now.  I’m not talking solely about fixer-uppers in rundown neighborhoods, but about perfectly nice homes in perfectly respectable neighborhoods, as well.  In my neck o’ the woods, which is about the average size of a typical neighborhood, I count roughly 10 empty homes.  Some are still at the point where there is an active sales effort ongoing…while the others are basically now “ghost” houses, with no signs of life or activity of any kind. 

As you would expect from a housing market that has offered us so many empty houses from which to choose, the prices of these very available units are low, to the point of being sickeningly low if you happen to be the owner.  Buyers are, in many cases, getting the deals of a lifetime on real property in the United States, and yet…the market is not moving upward in any noticeable fashion at all.

A recent article in The Boston Globe about the current state of home buying in America mentioned a property manager, of all things, who has decided to continue renting expressly because she has watched the value of the homes of her friends and acquaintances fall so far in the last few years.  She is deciding not only against buying right now…she’s thinking she may never buy.

Really?

If you’ve decided to continue renting presently because you believe that the market will continue to fall into the foreseeable future, that’s one thing; that is a person who actually is paying attention to what’s going on, and has developed a strategy, of sorts, to secure the best deal possible when he ultimately buys.  However, what’s disconcerting to financial professionals is to hear so many renters decide against buying real property entirely because of what has happened over the last few years

Count me as one financial pro who has always felt that home ownership is not the no-brainer that it is generally touted to be.  There are a lot of examples of people who, for one reason or another, are better off remaining renters.  Those people have always existed…the person who has little patience for maintenance is a good candidate for lifetime renting, as is the person who sees himself moving very regularly.  However, if you are an otherwise good prospect for home ownership who is simply running and hiding because of what the market has done recently, that is a major mistake.  Although I have never considered the purchase of a primary residence to be an investment, per se, it is still something that carries with it some investment-like features, and thus is open to be considered in terms of timing of purchase; right now, it’s a great time to purchase.

Methinks the aforementioned property manager will buy at some point in the future.  You know when she’ll do it?  After prices have already begun to rise, and after mortgage interest rates do the same thing.  For many people, they quite unnecessarily set themselves up for future disappointments by waiting too late to take advantage of great deals staring them in the face.  You don’t even have to trust your instincts in conditions like these – simply trust the facts. 

Even taking into account the historic collapse in property values over the past few years, real estate has increased in value at a rate of a little over four percent per year over the past 20 years.  That’s another thing – “historic.”  What are the chances that another collapse of “historic” proportions will follow anytime soon?

In the end, it’s OK to pull over to the side of the road and wait for the storm to pass before continuing…but you also have to be willing to recognize when it has passed and when the sun is back out…or you’ll just remain forever at the side of that road.

Agree or disagree; please register your comments below.

Follow me on Twitter at www.twitter.com/robertyetman.

Follow me on Christian Chirp at www.christianchirp.com/robertyetman. 

Bob Yetman, Editor-at-Large at Christian Money.com (www.christianmoney.com), is an author of a variety of materials on personal finance and investing, as well as on topics of fitness and self defense, to include the book Investor's Passport to Hedge Fund Profits (John Wiley & Sons, Inc.) and the unarmed combat training DVD Thunderstrikes - How to Develop One Shot, One Kill Striking Power (Paladin Press).

Tags: should+you+buy+or+rent+a+home

More Stupid “Rules” About Job Interviews

Lately, there have been a lot of articles circulating that have to do with the subject of performing well in job interviews.  It’s understandable that we’re seeing so many of them, given that the unemployment rate has been as high as it has for so long.  I have to say, however, that I take issue with a lot of what is being dispensed as advice for job applicants, all of it by human resources “professionals.”   Just recently, The Wall Street Journal published an article entitled What Not to Say in a Job Interview, in which it reported that there are very wrong ways to answer queries like, “Tell me a little about yourself,” “Describe why you want to leave your current position, and “Describe your biggest strengths and weaknesses,” among other notable interview questions.  What struck me was how innocuous some of the sample “wrong” answers are…and how if a candidate gives them, then he should consider himself completely done-for as far as his chances of getting the job.

A big part of the problem with all of this is that human resources, and the job hiring process, more generally, have morphed into sort of a chic industry, replete with psychologists, counselors, and other variously-titled “experts.”  The vast majority of people I have personally known (including myself) who’ve hired others were, and are, simply looking for good candidates that they liked.  It’s pretty much that simple.  These managers did not adhere to some “science” of recruiting, or interviewing, or hiring.  They were interested to see if you were qualified for the job, and if they liked you well enough to want to have you around several hours each day.  If a candidate presented the best combination of qualifications and likability, he was the one hired.

Now, it’s all a specialty…with specific words that have to be avoided because now they’re considered code for something sinister, “physical cues” you have to be careful not to give off, because, of course, if you ever fold your arms during a conversation, why that absolutely means you’re mentally unavailable and not a team player.  I heard one HR person recently say that anyone who drops off a resume to a company in person is now actually looked at negatively, that doing so proves that the candidate is behind the times, and that submitting one online is the only way to go about it now.  Are you kidding me?  Why would I, as a manager, ever look at a person negatively expressly because he went to the trouble of making himself highly presentable and screwed up the requisite courage to knock on doors, resume in hand?

Can’t we just take two or three steps back from the “science” of hiring, and just do what we did before?  Call back those resumes that are most professional-looking and that most closely match the requirements of the open position.  As for the interview, assuming the candidate arrives appropriately groomed and attired, ask some sensible, straightforward questions that allow you to properly gauge if what you liked about the resume translates in person.  Of those that do well up to that point, hire the one that seems to be superior to the rest, and if the “contest” is too close, hire the one you think will get along the best within the confines of your company.

Then again, I possess no advanced degree in human resources; I’ve only run successful companies for several decades…so what in the world could I possibly know?

Agree or disagree; please register your comments below.

Follow me on Twitter at www.twitter.com/robertyetman.

Follow me on Christian Chirp at www.christianchirp.com/robertyetman. 

Bob Yetman, Editor-at-Large at Christian Money.com (www.christianmoney.com), is an author of a variety of materials on personal finance and investing, as well as on topics of fitness and self defense, to include the book Investor's Passport to Hedge Fund Profits (John Wiley & Sons, Inc.) and the unarmed combat training DVD Thunderstrikes - How to Develop One Shot, One Kill Striking Power (Paladin Press). 

Tags: how+to+interview+for+a+job