B and I have made the decision to go back to the beginning of our financial journey and start again so we can save to pay cash for farm land. We have built our budget around the survival plan and are even going to use envelopes again.
This is something we want very badly and are taking the necessary steps to help us stay focused. It's always nice to have a goal.
Friday, October 29, 2010
Back to Basics
Posted by Sam Burton at 5:54 AM 0 comments
Tuesday, October 19, 2010
Bankruptcy and The Crystal Cathedral - Pathetic or Prophetic?
Posted by Sam Burton at 9:39 AM 0 comments
Labels: budget, capitalism, Christianity, debt, money management
Saturday, October 16, 2010
Freeze on Reposession - Sounds Compassionate, but is Bad Business
We're all pretty much aware that home foreclosures are at an all time high and the number just keeps on growing. You may even have followed the story of the family in Denmark, ME who refused to pay their mortgage for years, but had the foreclosure fail because of shoddy paperwork by the bank.
As that story unfolded, the world discovered that the subprime loan debacle was not the only skeleton in the closet of the embattled mortgage industry. We have learned of falsified signatures, 'robo' signers, clerical errors, and more. The banking world has given itself another black eye. I've even heard stories of people who were current (and always had been) on their loans, being foreclosed on!
Now we have another mess at just the time we need some stability. What we don't need is a knee jerk reaction that cripples the already wounded housing industry. But what we're getting is a knee jerk reaction. Go figure.
There is talk of a moratorium on foreclosures and some lenders have enacted voluntary freezes. On the surface, that sounds compassionate and responsible. In reality, it has the potential of hurting everyone who is trying to sell a house or even buy one. Here's why I think so.
First, if I'm a title insurance company, I am much less likely to risk underwriting anything. No title insurance, no mortgage.
Secondly, if I'm a lender, what motive do I have to loan money? If there is no guarantee and I must bear all the risk, I have no incentive to put my money out on the table.
If I'm a homeowner, I'm tempted to to say, "Hey, why should I pay my mortgage? The guy down the road hasn't paid his in 2 years and nothing has happened, why am I being punished for being responsible?"
If I'm trying to sell my house, I'm stuck because even if someone wants to buy my house, the buyer's trouble in finding title insurance or a willing lender may kill the deal.
There is no excuse for the shoddy business practices that have led to this mess. The perpetrators should be uncovered and dealt with accordingly. But let's not damage our economy more, by over reacting. In my opinion, the suggested moratorium is a political move rather than a financially sound one. Deal with each case, each mortgage and each lender on an individual basis. Grant assistance where assistance is required. Dole out justice where justice is required. Repossess where appropriate, and fine or close up those businesses who have done wrong. But don't, please don't, risk us all.
Posted by Sam Burton at 7:26 AM 0 comments
Monday, October 11, 2010
The Fed is Making Me Nervous.....AGAIN!
I'm not an economist. I don't want to be one and I don't play one on T.V. I'm just a guy who wants to live on less than I earn, avoid debt, build enough wealth so that I don't have to worry about economic down turns and upticks and help others do the same.
Like I said, I'm not an economist, but as I watch our Federal Government and the Federal Reserve pile bad decision upon bad decision, I grow concerned that sound economics is an endangered category. I read this morning that the Fed is considering printing more money, with the intent of driving down the dollar and driving up inflation.
To my simple Hillbilly mind, that sends the wrong message. First, driving prices UP via inflation just before the Holidays, in a time of high unemployment, does not indicate a concern for the welfare of the average American. The focus appears to me to be on foreign investment, by making it less expensive to invest in America; kind of like a big sale.
Perhaps it will work, but it's just as likely to make foreign investors run for the hills. It will not spur borrowing, which is another desired outcome. As long as people remain out of work at a near 10% level, we are not going to see the spending that the Fed keeps wishing for. Creating inflation will not do that, either, though it may ward off deflation.
It seems to me that we should look to ourselves, rather than to the outside to solve our economic uncertainties. Lower taxes, cut spending and let the markets take care of themselves.
For the average individual or family, the way to face the future is increasingly clear; eliminate debt FAST, put God first, live on less than you earn, grow and emergency fund of 1 year of living expenses, store up one year of staples, save at least 10% and slowly increase that to 20%. Everyone who works this plan for the next 7 years will find themselves secure against whatever the future holds. I am convinced of it.
Posted by Sam Burton at 5:50 AM 0 comments