Why Pay Cash for a House?


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Or “How Not to Lose a Million Dollars Buying a House”

How often have you heard someone say “I’m sick of throwing away money on rent so I’m buying a house.” Why do people think this? After all, you can rent from a landlord with little risk or “rent” from the banker with a lot of risk. Why do people think they’ll automatically be financially ahead if they buy a home?

Our house, as an investment, has been awful.  We bought it in a great location at a time when home prices were going up, up, up in our area. How could we go wrong with that? Yet we had no idea we were nDSC02025early at the height of a housing bubble, and it was about to burst. The short story is, after the bubble popped and even with an economic rebound that continued for ten years afterward, our “investment” gained us a whopping 1% average annual return minus mortgage interest, taxes, insurance and upkeep. A terrible investment. We lost big time.

But we love our home and don’t regret buying it at all.  Why? It has to do with the advice that we often give people about buying a house: Buy a house because of the location in a great neighborhood, or the view, or proximity to your favorite people or places, or to have a big yard or grand garden, or to raise a family, or to have a bunch of animals. These “wants” for owning a house, however, will cost you big time. If you’re not okay with that, then keep renting.

All About the Math

The main reason that buying a home is not really a good investment is simple. Simple math, that is, that the banks would rather you didn’t do. If you buy a house and get a mortgage, your home will have to appreciate by up to 7% or more a year just to break even (with inflation factored in this number could be 10% or more).  Do the math: Add up the annual cost of your mortgage interest, maintenance, property taxes, and insurance. Divide it by the value of your home. Don’t forget to add the annual inflation rate on top of that.  It all adds up to a pretty hefty annual percentage rate.  Are home prices going up by that rate in your area? Even if they are, for how long can you count on that before the market has to correct?

If you want to reduce the magnitude of this poor investment choice, then the best thing you can do is pay cash for a house. Seriously, you should.

venus and marsWhy Pay Cash For A House?

Answer: Because you may lose a million dollars otherwise.

Example: If you buy a house for $250,000, put a $50,000 down payment, and get a 30 year mortgage for the remaining $200,000, the lost investment opportunity could be worth well over ONE MILLION DOLLARS! Do the math. Assume monthly interest payments made to the bank on your loan balance given an annual interest rate of 5% over 30 years, and what that same amount of monthly mortgage interest if invested elsewhere could have become if it returned 8% annually.

Bottom line is this: Buy a house because you want a home, not fooling yourself into thinking you are making some great investment when you’re really losing a million (unless you pay cash or pay it off way early!).

Penny Spa


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Earlier this week my wife and I celebrated our thirteenth wedding anniversary – with a stay vacation all week! Yep, a whole week off work with no wasted time traveling, crowds or traffic, seedy motel rooms, or bad food. Our town is already like a vacation destination and has tons of great food establishments. Plus, our house is very cozy and just right for hanging out. We are close by to parks, trails, and a short walk to downtown.

A definite highlight of our week was our “penny spa” on Saturday, thanks to our nine year old daughter. I don’t know how or why she came up with this idea, but she warned us a few days beforehand that she was going to do a spa on Saturday for us. Then, the night before as we were tucking her into bed she said, “just twelve more hours until your spa!”

img_0312Saturday morning she had everything ready to go; soothing “rain forest” music from the internet, a gooey rub-on mask for facials (smelled like glue!), cucumbers for our eyes, treats (from a paper menu), foot massages, back massages with karate chops, neck massages, hair brushing, and our favorite magazines. My wife got forty-five minutes worth and me, a half hour. I told our daughter that I would tip her and she asked, “why?” She only wanted a penny. Pretty sweet, huh! We’re living the good life for sure.

At lunch time it only seemed fitting that we take her to our favorite gourmet pizza place. Then we went to our favorite French pastry shop. We topped it off with some impromptu shopping and found some bargain deals on a few of her favorite toys.

It was one of those “smelling the roses” kind of days that don’t come around often enough and, when they do, go by all too quickly. Come to think of it, the entire week went by way too fast! That seems to be life these days – weeks, months, and even years slipping by faster and faster. But so glad we got this sweet moment!  In fact, a mystery is this: If we were immortal with nothing but endless time, we might long for it to be limited for a while so that we might better savor the moment. Penny spa is that wish come true.

The majority of the world’s best thinkers, leaders, servers, fighters, and artists throughout history are mostly forgotten. Yes there are ruins, writings, and now the internet as if to reach eternity. But there is no vast remembrance of innumerous real greats from ages gone by. Still, the effect of so many of them continues, showing that our magnificent efforts in life are not just about our one short blip in time. Let’s make it count beyond us.

Ocean Front Property in Arizona

Great investment opportunity with this super hot diamond in the rough!

  • Price recently slashedIMG_7283
  • Motivated sellers
  • Bank will close quickly
  • Recently inspected by team of experts
  • Huge new skylights give view of the stars
  • Rustic multi-textured façade
  • Huge corner lot
  • Blank canvas
  • Open concept
  •  Heavy duty storm windows


Tips for Buying A Rental Property


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A few years ago, my wife and I came soooo close to buying a rental property. We actually signed some of the papers, then backed out. It was an older single family “grandma” house built in the 1950’s. We saw the potential in this excellently maintained house. The exterior wood, paint, and siding were in perfect condition, as was the roof. The interior was very neat and tidy (though dated). The curb appeal and location were decent enough too. But there were the “non-code” basement bedrooms, the lack of parking on that side of the street, and no driveway. The only parking was in the rickety single detached garage off the back alley, or in a small gravel parking area off the back alley.

xx76876dWe could probably have made it work. But in the end we chickened out, telling ourselves that our personalities weren’t suited to being landlords. After all, we would really come unglued with someone trashing our place and be very unsympathetic with them being late with rent. And we definitely would not want calls and complaints all the time, or have to give up our precious spare time to go fix things at the property. Further, having debt again scared the heck out of us. So we continued on with the formula we’d started years before – keeping out of debt, and putting as much as we could into various retirement funds through work and on the side.

The no-debt formula had worked well for us. We really thought that we’d “arrived” when we first got out of debt (all except the mortgage) several years earlier. And we thought we were surely on easy street when we paid off the mortgage four years later. We were on top of the world! Can you imagine? No debt, no more student loans, no credit card debt, a paid off house, paid off cars! We could do anything we wanted. All we had to do from then on was to coast along and dump whatever we could into retirement funds, right? Retirement, no problem. It was many years off. At varying times, my wife and I both had even temporarily cut back from full-time at our jobs, thinking we could just coast and enjoy life. And we did.

Fast forward several more years and given a stock market that has been anything but impressive, we were growing tired of watching all our hard work to save and invest in various retirement funds not really materialize into the thrilling gains we thought we might see. Given the historical average stock market returns going back seventy years, your money could theoretically double every seven years, right? Right, depending what decade you’re living in! Instead, we’d seen quite the roller coaster ride, losing nearly half the value of our investments in the stock market at one point. The stock market has made some notable gains since that time, yes, but our retirement funds’ overall growth still hasn’t impressed us.

We’d gotten serious about this money thing pretty late in life. Time was not in our favor anymore, whether it be its effect on compounding interest or for improved stock market averages. So in recent years we were beginning to foresee the harsh reality of not having a big enough pile going into retirement. Company pensions are nearly a thing in the past. Our “pension” is only what we save ourselves and we weren’t nearly far enough along. “If I have to, I’ll keep working ‘till I die,” I’d jokingly tell my wife. Sure, I really would if I had to. But the thought of really having to was starting to bug me.

A friend of ours recently started working at a financial firm which pushes, among other DSC02025things, annuities. While we really didn’t have enough extra cash lying around to even consider anything like that (and we’re not convinced we would do it even if we could afford it), we agreed to attend a free seminar and dinner. Both were excellent! And although the speaker was really talking about annuities, he made some memorable points that hit home with us. “You need income streams in retirement,” he said. “Peace of mind in retirement comes from having dependable steady monthly income, not a big pile that you are slowing whittling away.”

The light bulb came on. My wife and I again started talking about how rental property could achieve the “steady monthly income” thing. We had to get over our fear of debt, and of bad renters. So we did what anyone should do if they want to invest money in something. We sought council. We read books and magazine articles and blogs. We consulted experts. We asked friends and coworkers, and were quite surprised to find out how many of them were already doing this. There were many horror stories too, about bad renters. Seems like everyone we asked had had a bad experience.

Undeterred, we researched some more. We got materials from a local group that gives presentations on the laws regarding tenants and landlords, knowing that if we were really going to do this it wasn’t just about being an investor; there was the whole other side of being an active landlord and property manager. In general, the books and articles about buying rental property all said the same thing: Do the math, make sure that the rent you will receive will cover your mortgage and expenses, and have some cash reserves. Sounded like good advice. But there was something that kept eating at me.

The rental property investment method most touted seemed to always involve multiple long term mortgages and leveraging. It was a house of cards. My wife and I had done some math years before when we almost bought that grandma house rental property. It seemed that in order to make things profitable, we would have to compromise our wish list and somehow juggle buying an older fixer-upper or other property in distress with questionable location, and go with as long a term on the mortgage as possible in order to keep our payments down.

IMG_0871 - CopyWe knew some people who were doing the landlord thing in our town back then, so we checked out several of their properties. Our conclusion was that the only way they could be making any money was if they were being slum lords – buying lower end properties, not putting a lot of money into improvements, going with thirty year mortgages, and leveraging as many properties and loans as they could since they surely could only be making a few hundred dollars a month profit on each rental. This was not the game we wanted to play, then or now.

We wanted a game with lower risk. So we did some more math, this time some different math. And the results surprised us. It turns out that the lowest risk and highest return approach for us (and perhaps you, the “average Joe” landlord wannabe) is this:

  1. Buy a modestly sized three bedroom, two bathroom house, which is more desirable for the average family whether you are renting or selling. The trend is going towards smaller homes because they are more efficient (lower purchase price, lower taxes, lower utility bills, lower maintenance costs). Don’t buy a mansion.
  2. Buy a house in a neighborhood where you would want to live (location, location, location). A bargain in a seedy part of town will cost you in how much you can get for rent. So it’s not really a bargain.
  3. Buy a house that is newer or a recent total remodel so that constant surprises and repairs won’t be a concern. The last thing you want to have to deal with is lead paint, asbestos, or knob and tube wiring. If you are in the business of remodeling homes, then ignore this piece of advice.
  4. Plan to keep your properties long term. The longer the better. This is why you can afford to buy the nicer rental house you really want in the decent neighborhood and pay full price for it if need be, instead of a fixer in a bad neighborhood. In the long haul, you come out ahead.
  5. Do not overpay. Yet at the same time you really shouldn’t be apprehensive about paying fair market value if the above criteria are met (size, location, condition) since you will be keeping this property a long time. Foreclosures may be an option if they weren’t neglected or trashed, assuming they meet the above criteria as well.
  6. Buy only one rental property at a time.
  7. Have only one mortgage at a time (which means paying off your own home mortgage before you even do this rental property thing).
  8. Get a ten year mortgage (maximum) with aggressive plans to pay it off much sooner.
  9. Take a deep breath for this one: Have sufficient income and/or cash reserves to cover the delta between the rent you will receive and your monthly mortgage payment/expenses (which will likely be higher than the rent since you are getting a ten year mortgage). You will be subsidizing this first venture until your mortgage is paid off. Having this temporary negative cash flow flies in the face of what nearly every “rental property for dummies” book will tell you. Ignore any criticisms. You’ll likely only have to subsidize your first rental property anyway. And, there is minimal risk if you have only one mortgage yet two properties (your personal home, and the rental).
  10. Be diligent in developing tenant selection criteria and a legally protective rental/lease agreement. There are many available resources, often free, to help you.
  11. As soon as you pay off the mortgage, buy another property.

This is a “slow brew” approach, conservative in risk. By not stretching out the mortgage, you are saving a boatload in interest. This is money you will put into your own pocket! By not having a leveraged house of cards (that is, you will have just one mortgage at a time) you are minimizing your risks should something hit the fan.

If, on the other hand, you don’t want to rent out your first rental property for less than the mortgage payment (as well as paying off the mortgage in ten years or less), and you instead want to use the “rental property for dummies” house of cards method of long IMG_0232drawn out mortgages, then you should question why you would help the banks get richer faster than yourself. Don’t do it. Here’s why.

With a paid off mortgage, you will reap the most profit on your rental property with the lowest risk. Then when you buy your second rental property, you’ll have two renters helping to pay off just one mortgage. See the pattern? When you buy the third rental property you will have three renters kicking the one mortgage to the curb in no time. And your property snowball will grow larger and larger depending on how many years you have to work at this.

Contrary to popular belief: Start slow, and you will greatly increase your chances of winning.

Buying A House As A Short Term Investment


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house frontRecently a co-worker asked me about buying a house if they didn’t plan to stay there but three years or so. I do have an opinion about buying a house if you’re not going to be living there a long time – don’t do it.

The math may seem to work but there are unknowns you can’t control, like the market.  If the market has dived when you want to sell the house, you’ll surely lose money. Yet get this: you may lose money even if the market remains steady because there are many costs in buying, owning, and selling that rob you of potential profit.

  1. There are buyer-pay closing costs. My wife and I just bought a house and forked over thousands in loan and other service fees.
  2. While you own your house there are insurance, taxes and maintenance costs.
  3. There is interest shoveled to the bank if you have a mortgage.
  4. The seller (which would be you in a few years) typically has to pay closing costs and realtor commissions. On the house my wife and I just bought, of the money we handed over, the seller paid $10,000 of it to the realtors.  Ouch.

So the problem is, when you add up all the above costs, your house would have to rise in value up to 7% or more per year just to break even (and that assumes today’s low interest rates). Yet historically, home values appreciate by about the same amount as the inflation rate (which has been 3%-4% annually on average).  How could you possibly come out ahead given this situation? This is exactly why buying a house short term is a good recipe for losing money.

But you say, “The market is hot in my area right now!” Beware. The market was hot when we bought our last house too. But when that housing bubble burst, home values dropped like a rock in a lot of places.  In our Pacific Northwest small town, home values held steady.  Our house value never dropped.  But because it was overvalued when we bought it, it has not increased in value much since the bubble burst. In fact, after owning it for ten years, even though we’ve done some great upgrades and have maintained it in perfect condition, it is now only worth about 10% more than what we paid for it. That is a very crappy growth rate (about 1% per year). As far as investments go, we’ve lost our shirts! If we would have had to sell our house within the past ten years, or even now, we would lose money.

The main reason to buy a home is for long term, non-tangible reasons. Like to raise a family. We love our house and have no regrets. And we plan to continue living there for many more years. We’ll probably come out okay financially in the long haul.

In my opinion, buying a house short term is not worth the gamble.  I would rent. All that said, as long as you know the risks going in and are willing to take them…go ahead, lose your shirt!

Eighty Year Old Hiker Explores Mile High Caverns


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Recently my wife and I drove to Butte, Montana, to see my eighty year old mother. It was July 2, and we planned to stay for the 4th of July weekend to see, among other notorious attractions, Butte’s infamous fireworks (http://youtu.be/-biRZv9AmhI, https://youtu.be/xXLUuBZchAs). On July 3, we drove over to an area along the Jefferson River between Whitehall and Three Forks to take a tour through the Lewis and Clark Caverns. It had been twelve years since my wife and I had gone through the caverns and we looked forward to taking our eight year old daughter along with us this time.

We asked my mom to come along too. She said it had possibly been decades since she’d done the caverns. Even though mom is eighty years old she is in good shape. She plays tennis every week and is active doing all sorts of other things, taking care of her house, going to community events, traveling. Mom has always been one to try new adventures, no matter what age.

What I’d forgotten about, though, was that the caverns tour is a two mile, two hour walk. “Level and shady,” I used to joke when trying to convince people to take hikes in the mountains with me. But level and shady is rarely the case, especially at these caverns! And it had been record breaking hot in Montana that week.

80 year old hikerWe left the parking lot and entered the trail head with about twenty other people and our tour guide. The walk to the entrance of the caverns, about one half to three quarters of a mile, is a steady incline of several hundred feet as well.  The caverns are about a mile above sea level, too, so most “low landers” would find they have to huff and puff a bit more at this elevation. And even though we started out on the trail about 10 a.m., it was already getting hot and the sun was beating down intensely. Of course, no one else on the tour was anywhere near eighty years old.

Mom kept a steady pace but was soon at the rear of the pack. She was a trooper and kept plugging along though. She was breathing fairly hard, yet only stopped briefly a few times. I’d ask how she was doing and she’d say fine. But I began to think that maybe I shouldn’t have brought her to the caverns, fearing it was too strenuous for her. She kept going and made it to the entrance without much trouble. As we entered the cave it felt good to be out of the sun. But the challenges were not over yet.

I’d also forgotten how the tour inside the caves takes about an hour and a half, and the route takes you down, down, deep inside the mountain through a series of very steep concrete and carved stone steps and paths through dimly lit natural corridors and rooms. As we made our way down the first very steep, long, dark stairway, again I thought that maybe it was a mistake to bring an eighty year old to all this. But to turn back at any point would mean trudging all the way up the steep incline to the entrance. The easier route, it seemed, was to continue on down through the caves and out the bottom exit.

Even though there were railings in the most dangerous places, there were plenty of spots where you could trip, slip, and fall far enough to get seriously hurt. Many passages were narrow and required you to duck, crawl, or slide. But mom was careful and steady footed throughout the entire cave. I was impressed. I tried to stay in front of her in case she should trip or stumble. But she never did. For over an hour we grand cavern roomslowly trekked along, stopping occasionally while our tour guide explained the sights and history of the caves. It was so worth enduring all the hazards for this very reason: The place is full of fascinating natural monuments and sculptures. It is a rare glimpse into a hidden world.

When we finally reached the bottom of the caverns to one of the biggest and most spectacularly decorated rooms, we were impressed with the scale of the formations. Off to the side there was a long, man-made, mine shaft looking passage way, with heavy closed doors at both ends, leading straight out to the side of the mountain. From the outside, the path was a flat, though sunny and hot, half mile walk back to the parking lot. The views were spectacular, overlooking the grand mountains across the valley to the south, and the Jefferson River between them and us. What a beautiful place. Did I mention fossils in the rocks? At a mile high elevation? Cool stuff, man. I took lots of pictures inside those halls and rooms of the incredible formations and natural art, and made this video of our trek (https://youtu.be/2w86_TdNdEM).

So in all, two and a half hours on our feet, sun, hot, cool, damp, sun, hot, spectacular, no sitting the whole time, finally made it back to the car. Mom did great, but said that this was probably the last time, ever, that she would see the caverns. Great journey, Mom. I’m proud of you for doing that! I hope I’m in good enough shape to do this when I’m eighty years old.

Snack Warfare


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Just like my wife, our seven year old daughter, Talise, takes her food seriously. So seriously, in fact, that withholding a snack (or threatening to do so) is a wonderful disciplinary tool. But that’s another topic.

popcorn feudsWe never knew just how much Talise loved popcorn until I shared a bag of microwave popcorn with her at home while we watched a movie. My wife does not care for the stuff so it was just Talise and I scarfing it down. We discovered that we could eat a bag in five to ten minutes, tops.

My wife and I observed that if all the popcorn was dumped into one big bowl, then Talise would be worried that papa was eating too fast (and therefore too much of my share). That’s when the bickering would start – and it would continue until the last piece was gone. Talise would tell me not to eat so fast and she’d try to keep me from reaching into the bowl. So I’d tease her by taking a big handful of popcorn and she’d squawk. By the second or third time we had popcorn she asked for separate bowls. And that’s when she demanded at least half of the popcorn.

Sometimes, using separate bowls, she’d take more than half. More than once we’d explain that “papa weights three or four times as much as you, so he should get three or four times as much popcorn.” Even though our daughter is a detail freak like us and pretty good with numbers, she understood what we were saying but never bought into that logic.

The last time we had popcorn, Talise, who usually sits between her mom and I, purposely sat on the other side of her mom just to be out of reaching distance from me so I couldn’t steal any of her popcorn. What fun times!

And so, the saga continued when Talise discovered Doritos, which I love even more than popcorn. On more than one occasion, I’ve raided the pantry and devoured a whole bag in a few days before she could have but a few chips. Recently, my wifemy Doritos came home from grocery shopping with two bags of Doritos. Not being able to help myself, I polished off one bag in two days. The next night, when I reached for the second bag, I discovered a stern note taped to it.  “Dear papa You cant eat this bag You ate a hole bag of deritos This is my bag. Sincerely Talise.” Priceless.

Beatles Memorabilia Beaten Out of Me


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Imagine this: Let It Be on vinyl with real Apple label, vintage sparkly blue and gold Wings belt buckle, two original mint-condition People magazines from the 1970s with the Beatles and McCartney on the covers, a rare Back To The Egg song/pictures/post Let It Be for freecard treasure book, and some Sgt Peppers trinkets.

Granted, not a priceless Beatles memorabilia collection. But my savored relics collected over decades, nonetheless. Most had been in a box in the garage since my teens, with a few additions over the years. On a recent spring house cleaning purge, I’d thought, hmmm, maybe ebay could make it worth parting with them.

So I took some photos and decided to sell them as one lot of memories – one price takes all. $79 and it’s all yours! I expected a quick response. Nothing. No takers. Come on, $49 and you win! No one gave a rip. Lowering the starting bid to $29, I was hopeful. Nope. Okay, you’re a dumb shit if $9.99 doesn’t grab you. Zilch. Guess everyone’s a dumb ass.

Ahh, a bargain basement bidding frenzy may do it, right? Okay then, here you go: Start the bids at $6.99. Boom! Immediately, I got one on the line. Holding, reeling. Two days to go. Nothing. One day. Rats. Down to the last 3 hours. Boom. Another one bites at $7.49. Okay, this may be fun. Waiting…waiting. Come on, bidding war. Sigh.  Never happened. Sold! $7.49 plus postage.McCartney and Wings memories

It was just an experiment, okay. It was only the second thing I’d ever sold on ebay. I wasn’t really too emotionally attached to this stuff anyway, though it hurt a bit to let it go for so little. But it wasn’t doing me any good in a box in the garage so I figured getting anything was better than nothing.

Carefully, I packed it all up in a nice secure package. I even threw in a bonus book that my wife and I had written a few years earlier about being financially responsible. And what the heck, when I printed out the pre-paid postage label it cost nearly a few bucks less than the original estimate. So I was actually making about $9 on a bunch of dusty memories. Not bad, I’ll take it.

But when I took the package to the post office, I discovered that I’d underestimated the weight by over a pound (most of which was probably due to including my frickin’ bonus book). That darn lying bathroom scale cost me another $7 in postage. So I promptly called my wife at work to complain, “I made a big whopping $2 on all the Beatles stuff.” She felt for me. That’s all I needed. And off the package went to Las Vegas to some balding, middle-aged geek who probably didn’t like the Beatles anyway. Figures.

Sgt PeppersThat should have been the end of the story. But it’s always great how no good deed goes unpunished. Three days later, I checked the shipping status and saw that the package had arrived at the buyer’s doorstep that morning. So, being the caring and compassionate person that I am, I sent an email asking whether the package had gotten there safely.

Yes, the package arrived just fine. But there was disappointment over the fact that one of the magazine back covers was apparently missing. Hmmm, I hadn’t recalled that but I couldn’t argue about it now. I apologized. The response was still negative – that magazine was the very reason he’d bought the lot. Come on dude, you got a steal, I thought. But instead, I graciously offered a $2 discount and he seemed happy enough. I could see right through him, though. There are always those complainers who want just a dollar to two discount no matter what (hmmm…sounds like me!). And no thanks for the bonus book either.

So…did you do the math? I made a big impressive $0 on my beloved Beatles and McCartney stuff. I guess that proves that no good deed really does go unpunished. Should have just given the damn stuff to the Goodwill. They would have made mint.

Stay In It For The Long Haul


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The longer you hold onto things the better off you are.  This should be a no-brainer.  But get-rich-quick impulses drive people to seek the so-called easy money goomoney.  Too many people think they can “beat the system” and win.  Probably because they started saving way too late in life and have too much time to try to make up for.  But better a few years of slow and steady saving, than a quick flash in the pan to see what little you have go up in flames.  Here are a few time-tested tips.

Tip #1

Statistically, if you keep doing the daily stock trading, trying to outguess the market, you will lose (unless you are genius and even then some of your success may just be luck).  You are better off buying some Index Funds and keeping them until after you retire.  Don’t sell them when the market dips or tanks.  Keep buying when the market dips and tanks.  The rebounds from these market corrections can be huge.  But you’ll miss them if you’ve sold everything out of panic and then are too much of a Nancy to get back into the market.

Tip #2

Doing constant vehicle hopping will rob you of your retirement faster than the angry grizzly bear mother whose cubs’ path you just crossed.  If you are one of these bozos who keeps buying (or worse yet, leasing) a new rig every few years, then I sure hope you are rich already and have plenty of money to blow – because if you aren’t rich you’ll never get there at this rate.  I can assure you that many of my friends, coworkers, and neighbors are giving their retirement away to the auto makers and their whore finance partners.  Don’t do it.

Tip #3

And if you are doing the house flip-flopping thing, thinking you are slowly climbing the property ladder on your way to easy street as you trade up houses, you may just be disappointed.  In very few markets is a house ever a good investment.  Beyond repairDo the math.  I have.  With mortgage interest, taxes, insurance, and maintenance, your house better be in a double-digit bubble or you are losing money big time.  You are much better off to buy a modestly sized house and stay it in forever, like our grandparents did.

Just Do It

Don’t panic and sell all your Index Funds when the stock market tanks.  Drive that old rig until she bites the dust completely.  Stay in that more modest, nearly paid-for house.  The road to riches is a slow simmer.  Quick speculation is always more risky.  The trick is to buy quality and keep it for the long haul.

Do you think you can do smart things with your money?  You can.  But if you say you can’t, you probably won’t.  If you say you will, then you’ll surely find a way.

Are You In Control of Your Brain?


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The power of the mind to heal the body and achieve great things, for eons known by man to be fact, has in recent times been ignorantly overlooked or, worse, intentionally swept under the rug. Why?

“Everything we do and say is first a thought.”  And that’s where many of the problems begin.

How Much Is Genetic?

Many diseases are caused or brought on by our negative thinking and resulting poor choices.  “Genes may create an environment within us in which a problem may grow, a predisposition, but they do not produce the problem; we produce it through our choices.”  Consider these findings:

  • “Research shows that DNA actually changes shape in response to our thoughts.”
  • “Research shows that 75 to 98 percent of mental, physical, and behavioral illness comes from one’s thought life.”
  • “Our genetic makeup fluctuates by the minute based on what we are thinking and choosing.”
  • “Research shows that 40 to 60 percent of heart disease patients suffer clinical depression and 30 to 50 percent of patients who suffer clinical depression are at risk for heart disease.”
  • “Our thinking and subsequent choices become the signal switches for our genes.”
  • “Other research shows that women who have suffered abuse were 60 percent more likely to have a child with autism.”
  • Our negative thinking and poor choices can genetically affect our children, predisposing them with similar tendencies.

social media starThere are other not-so-pleasant side effects from our thinking (or lack thereof).  “Greater social media use is associated with a higher body mass index, increased binge eating, a lower credit score, and higher levels of credit card debt for consumers with many close friends in their social network – all caused by a lack of self-control.”

We are as we think.  “What we say and do is based on what we have already built into our minds.”  If undealt with garbage from the past and present is built into our minds, then we are not likely healthy or happy.

The Brain’s Constant Dance

The brain is not static, but always changing as a result of input from our five senses, as well as the rehashing of good and bad “baggage” in our sub-consciences.  Our thoughts continuously rewire and physically change our brain.  “Neuroplasticity by definition means the brain is malleable and adaptable, changing moment by moment of every day.”

“Our thoughts, imagination, and choices can change the structure and function of our brains on every level: molecular, genetic, epigenetic, cellular, structural, neurochemical, and electromagnetic, and even subatomic.”

“It is very interesting that every cell in the body is connected to the heart, and the brain controls the heart and the mind controls the brain.  So whatever we are thinking about affects [or can affect] every cell in our body.”

The Flip Side

“The design of the brain allows us to capture and discipline chaotic thoughts.”  It is possible to “take every thought captive” and retrain our thinking to starve the negative thoughts and feed good ones.

“Our brain does not control us; we control our brain through our thinking and choosing.”Kitty Brain

“We can change the physical nature of our brain through our thinking and choosing.”

“As we consciously direct our thinking, we can wire out toxic patterns of thinking and replace them with healthy thoughts.”

Put Rubber To The Road

“We need to wire in positive thought networks that can fill us with the power to get us back on track.”  The process of changing our thinking is a conscious, disciplined one, and to be practiced daily.  “Through our thoughts, we can be our own brain surgeons as we make choices that change the circuits in our brains.  We are designed to do our own brain surgery.”

“Research has shown that mental practice – imagination, visualization, deep thought, and reflection – produces the same physical changes in the brain as would physically carrying out the same imagined processes.”  The same parts of the brain are activated by thinking about an act, as by the act itself.

“It’s your thinking that will actually change your brain.”

Daily practice of the five steps below will simultaneously break down toxic thoughts and build up healthy replacement memories.  Perform this process seven to ten minutes per day, for a least a 21 day cycle (this is considered to be the brain detox cycle).  Most times one cycle is enough to rewire toxic thought, but repeat the 21 day cycle as needed (the book referenced below recommends at least three total cycles in order for the change to become automatized).

  1. “Gather” – Be aware of incoming thoughts through the five senses, and from nonconscious memories and their attitudes, and associated feelings. This step brings thought into consciousness.
  2. “Focused Reflection” – Evaluate one of the harmful thoughts and its interconnections. The process includes body awareness, emotion regulation, and sense of self.  Think about solutions too, not just the problem.
  3. “Write” – Writing helps consolidate thoughts/memory, adds clarity to thinking, and helps you see areas needing work. Keep a thought journal.  Or try drawing a graphical representation or diagram of the central thought, with off-chutes and branches for each facet of that thought.  Aside from defining issues, identify ideas for solutions.
  4. “Revisit” – Work out solutions and ways to overcome. Evaluate where you have come from and where you are going.
  5. “Active Reach” – Take action. Teach yourself to get rid of the thought in some creative, active manner.  For example, every time you have that particular harmful thought, you could remind yourself of your solution, dwell on your chosen replacement thought, or repeat some other positive message to yourself.  Eventually your response to this toxic thought will become automatic.  Important: Repeat/practice this action step at least seven times throughout the day.

place to thinkFinal Thoughts

Seek these good things for your brain:  Introspection and thinking things through, letting your mind wander (but stay out of the gutter), sleeping, deep thinking, self-reflection, prayer, catching your thoughts and weeding out toxic ones, developing your mind intellectually, and trying to see the positive in things.

All quotes and the five step process paraphrased above are from the book, Switch On Your Brain, The Key to Peak Happiness, Thinking, and Health, by Dr. Caroline Leaf.