731 W Skippack Pike
July 19, 2012 5:44 pm
Billionaire Mark Zuckerberg made news recently when he refinanced the $5.95 million mortgage on his Palo Alto, Calif., home with a 30-year adjustable-rate loan starting at 1.05 percent. The question I keep hearing folks ask is, “Why does a billionaire like Mark need a mortgage on his home? Why doesn't he just pay it off with cash?
That, my friends, is indeed the million-dollar question. The answer lies in the fact that Mark ascribes to my definition of being debt-free. While most financial gurus believe all debt is bad, I don't. I believe that there's good debt and there's bad debt. Bad debt does not increase your personal net worth nor does it provide any tax benefits. Good debt either increases your personal net worth or provides tax benefits. A mortgage is an example of good debt.
Most define debt- free as having absolutely no debt. I define debt-free as eliminating all forms of bad debt and wisely using good debt to accumulate a pool of funds that's liquid, accessible, earns a real rate of return, in your control and that can serve as collateral. With funds accumulated in this manner, you can now make the decision to pay off the good debt that you have - if you deem that to be a prudent use of your money.
What Mark is doing definitely fits this description. If you had the choice of being debt-free with $12 million in assets and $2 million in good debt or being debt-free with $2 million in assets and no debt, which would you choose? I'd choose the former and apparently so has Mark.
So what other lessons can young Mark Zuckerberg teach us? Here are a few:
• Time Value of Money Lesson: Inflation teaches us that our money is most valuable to us today. That is why taking out an interest-only loan and deferring the payment of principal owed to the bank until sometime later in the future is a prudent money lesson you should pay attention to.
• Leverage Lesson: Leverage is the use of borrowed capital to increase the potential return on investment. The less money you put into the purchase of a home, the higher your return on investment. Using "Other People's Money" (OPM) is a proven method to accumulate wealth.
• Liquidity, Use and Control (LUC Factor) Lesson: Paying cash for a house violates a very core economic and financial principle I teach my clients which is that at all times, CASH is KING. You must do everything you can in the way you manage or invest your money to make sure you maintain liquidity, use and control of your funds. To be financially successful in life, I tell my clients they'll need a lot of "LUC."
• Collateral Capacity Lesson: Having collateral capacity on where your funds are invested allows you to use "Other People's Money" to create even more wealth. This fact alone is why Mark obtained a preferential rate of 1 percent on his mortgage loan.
• The Spread or Arbitrage Profit Lesson: This refers to the amount of money that can be made on the difference between the cost of borrowing versus what can be earned on those borrowed funds. This is one way that banks make a ton of money and a very powerful money lesson for you in regards to your own money.
• Velocity of Money Lesson: This speaks to the ability to get multiple investment uses out of the same dollar. It's the equivalent of having $100,000 in two separate investments and reaping the benefits of what each investment yields.
Apply these principles to help you win the money game!
Amazon.com Best-Selling Author Ike Ikokwu, “The Financial Independence Coach,” is a CPA, CFP and Registered Investment Adviser.
For more information, visit www.winningthemoneygame.net.
July 19, 2012 5:44 pm
Nothing says “welcome to my home” quite like an impressive entryway. Attention to detail and some added extra touches of hospitality can transform any “ho hum” entry into a warm and inviting approach to the home.
Mark Clement, a professional contractor, recommends homeowners start with the basics. Evaluate the look and condition of the front door. Determine if the current door needs to be replaced or just enhanced with some decorative pediments, crossheads and pilasters.
“A front door should have good energy efficiency features, a snug fit to the frame and an appealing color,” says Clement, host of the home improvement radio show MyFixItUpLife. “If you’re missing any of those elements, then I would invest in a new front entryway.
“My recommendation is a secure fiberglass door that resists denting and scratching, is easy to maintain, energy efficient and quiet. And, don’t forget to select decorative or privacy glass for the doorlites and potentially your sidelites to really add appeal to the home’s entryway.”
“For most entryways I recommend a set of pilasters that stand up next to both sides of your door and attach to the surface siding. Then, add a crosshead and pediment that can ‘sit’ on the top of the entryway. With dozens of decorative pediment designs to choose from, such as a sunburst, rams head or peaked cap, you can add your own personality to the entryway. These low-maintenance synthetic products are all key focal features that make an entranceway more appealing.”
Clement points out that urethane millwork products are long-lasting, since their surfaces are not subject to chipping and peeling as you’d find with many wood trim pieces. The synthetic pieces also resist humidity, warping and rotting, making them ideal for all climate conditions.
“Even the simple and relatively inexpensive addition of a crosshead and keystone over an entry door can transform the look of a home,” says Clement. “For the final steps, consider new exterior lighting fixtures to complement your new door, along with a colorful welcome mat and planters of colorful flowers. Together these all add up to creating a warm, welcoming entryway for you and your guests.”
Sources: www.thermatru.com, www.fypon.com
July 19, 2012 5:44 pm
Net lease. Lease requiring the tenant to pay all the costs incurred in maintaining a property, including taxes, insurance, repairs, and other expenses normally required of the owner.
July 19, 2012 5:44 pm
A: The second home market has more ebbs and flows than the primary home market. Sales are iffy in a bad economy except, perhaps, on the high-end. That said, there is a growing trend toward the purchase of vacation homes. They are being bought for investment purposes, enjoyment, as well as retirement. In the latter instance, some people are buying with the idea of turning a vacation home into a permanent retirement haven down the road, a move that puts them ahead of the game now.
Some of the tax benefits of a second home mirror those for a primary residence. Before taking the leap, however, ask yourself if you can afford to carry two mortgages, maintain two households, and pay the extra utilities and maintenance costs. Also, learn about financing requirements and options, which can differ slightly from those on a primary residence.
July 18, 2012 5:42 pm
Your monthly mortgage loan payment may be fixed, but that doesn’t mean you can’t find ways to lower it, notes consumer finance advocate Sarah Tann.
Tann, a frequent contributor to consumer finance publications, suggests the top five ways you may be able to lower your monthly payment:
• Improve your credit score – The better your credit score, the better mortgage rate you can get. Don’t be sloppy about paying your bills. Pay them all on time every month. Pay credit card bills off in full each month. If you are carrying balances, work diligently to pay them off in full – or at least lower your debt by 50 percent. Once you improve your overall score, you may be ready to apply for – and get – a lower rate of interest on your mortgage.
• Get rid of PMI – If you did not put at least 20 percent down when you bought your home, you probably took on private mortgage insurance (PMI), which protects the lender in the event you default on the loan. Mortgages signed after July 29, 1999 are automatically cancelled once you reach 22 percent equity in the home. If you signed on for PMI before that date, you can cancel it when you have 20 percent equity. The catch is you have to request that it be dropped. If the shoe fits, call your lender.
• Take advantage of refi rates – Interest rates today are at historic lows. If you currently have a rate of five to six percent or higher, and plan to stay in your home for a while, now may be the best time to lower your monthly payment by refinancing your loan at low- or even no-cost.
• Shop around – A mortgage is a product. Shopping, comparing and negotiating with lenders to get the best terms possible can save you many thousands of dollars. Get referrals from people you trust and shop around for the best available deal.
• Take a shorter term – A fifteen-year mortgage will carry a lower rate than a 30-year mortgage – often as much as half a percent lower. Of course, you will be paying a higher monthly amount on the short-term loan. But if you can afford to pay the higher monthly amount, you will pay your loan off sooner and may save hundreds of thousands of dollars in interest over time.
July 18, 2012 5:42 pm
Warm weather creates an inviting atmosphere for yard work. Whether you work hard to make your yard the envy of your neighbors or are just trying to trim the hedges, you should take precautions to protect your back? No matter which type of homeowner you are one thing holds true - gardening and yard work can be a real pain!
One of the most common complaints following a few hours of yard work is lower back pain. Weeding, mowing, digging, raking, planting and mulching can wreck havoc on your back muscles, and if you’re not careful it’s easy to strain or pull the muscles in your back.
“The biggest mistake people make when working in the yard is not warming up their bodies prior to starting,” says Dr. Brian Morrison, President & Clinical Director of Morrison Chiropractic and Adjunct Faculty Member at the University of Maryland School of Medicine. “It’s important to warm up your muscles to prepare for the repetitive movements and heavy lifting required for gardening tasks. And, contrary to popular belief, old fashioned stretching exercises may not be effective or helpful,” he added.
Below are 10 tips for gardening to help you keep your back in good shape all summer long.
1. Warm Up – Before beginning; take a few minutes to warm up your muscles by doing some dynamic warm up exercises. These include going for a brisk 5 – 10 minute walk around the yard, jumping jacks, walking lunges and arm circles.
2. Hydrate – Muscles need water to function optimally. When you maintain your body's water levels during use, you allow your muscles to coordinate with each other properly and support your physical activity. Adequate water levels in your body can help prevent the onset of muscle cramps or spasms and help prevent dehydration.
3. Mix It Up - Vary your gardening tasks each time. Do a little pruning work, raking, bending work, digging, etc. Don't continuously perform any particular activity for a long period.
4. Mowing – Leaning forward as you push the lawn mower can strain your back. Be sure to maintain proper posture and push with your arms and legs instead of your back.
5. Weeding – Bending over at the waist for prolonged periods is a sure way to cause your back muscles to start complaining. Kneel on a rubber gardening mat, sit on a wheeled gardening stool, or sit directly on the ground instead. Make sure you have all your tools close at hand.
6. Lifting – When lifting bags of dirt, mulch or potted plants, keep your back straight and bend with your knees and hips (not your back) when reaching down. The power for your lift comes from your buttocks and legs. If you are picking up piles of grass, leaves or other yard waste, make the piles small to decrease the weight.
7. Raking – Most people use the rake with their dominant hand only. This causes one side of your body to be overused. Try switching sides every few minutes, even though it will feel awkward. Your back, neck and arms will thank you.
8. Wear Supportive Shoes – Yard work can put a lot of strain on your feet and legs. Good foot and arch support can stop some of that strain from reaching your back. Ditch the sandals and flip-flops and opt for a supportive pair of shoes instead.
9. Take Breaks – Taking your time will make it less likely for injuries to occur. Pushing yourself to the point of exhaustion can cause you to get sloppy with good posture and lifting techniques, setting you up for injury.
10. Outsource - Consider hiring a local student to do the heavy work that strains your back. Lots of young people can't find summer jobs and one may be more than willing to spend a few hours a week working for you. As an added bonus, you might just turn them into a gardener for life!
July 18, 2012 5:42 pm
(ARA) - Run a marathon. Visit the rainforest. Backpack through Europe. You might have a to-do list for chores around the house, work tasks or errands, and while those are all intended to keep you on track for the more mundane, but necessary, tasks in life, have you thought about compiling a more exciting kind of to-do list - filled with the places you want to see and things you want to do before you die?
While you've trained yourself well in accomplishing the day-to-day tasks that keep your life moving, you can use that same mindset to accomplish your life goals when it comes to travel and adventure. Compiling a to-do list and then formulating a plan for crossing the top items off is one of the best ways to ensure that you'll get to live your dreams.
If you're dreaming of that big adventure, but haven't quite made it a reality, here are a few tips for making that dream come true:
* Start by compiling and prioritizing your to-do list. Your adventures could range from running a marathon in a city you've always wanted to visit to zip-lining through a tropical rainforest.
* Set up a savings fund for your adventure. This can be a long-term venture, but set an automated withdrawal your paycheck each month into a special account, or develop a similar plan to build your savings. Find easy ways to save, such as cutting out your morning latte a couple days a week.
* Research your destination to keep you thinking about your trip and to make sure you get everything out of it when you go. Look through issues of National Geographic Traveler and travel books to learn more about your destination.
* Sign up for deal alerts for your dream location on travel websites. If you find the right deal, you might be able to afford your trip sooner than you had thought. It also pays to follow hotel chains with locations in many destinations on Facebook and Twitter, as you never know when a promotion might pop up that can help you save even more. If you have an activity planned, be on the lookout for deals in the months leading up to your trip.
* Find unique ways to make your vacation happen. Traveling as part of a volunteer group is also a great way to see the world and do some good at the same time. If you simply love to travel and enjoy helping others, do some research in your community to see if there's an upcoming trip you might want to join, or research volunteer tourism organizations on the web.
Source: Hilton Garden Inn
July 18, 2012 5:42 pm
Multiple listing. Agreement that allows real estate brokers to distribute information on the properties they have listed for sale to other members of a local real estate organization. Allows the widest possible marketing of those properties. Commissions are split by mutual agreement between the listing broker and the selling broker.
July 18, 2012 5:42 pm
Q: How Do I Find the Right Agent for Me?
A: To begin with, think local. Select someone who is very familiar with your neighborhood and the properties for sale in it. Then, if you are selling, say, a condominium, choose an agent with expertise selling apartments to potential homeowners.
Because you will want the widest possible exposure for your home, you also will want a real estate firm that works with other agencies to get your property sold. The Multiple Listing Service (MLS) used by Realtors, licensed members of the National Association of Realtors, is still the most common and effective form of cooperation used today.
Beyond these parameters, select an agent who is competent, efficient, and ethical. Perhaps the agent who first sold you your home would be a perfect candidate. If not, ask family, friends, and neighbors for recommendations, or choose a firm headed by an individual who is known in your community.
July 17, 2012 5:42 pm
From backyard barbeques to picnic cookouts, Americans celebrate summer by eating outdoors. As Americans turn to grilling alfresco, keep the following five food safety tips in mind, to ensure safe and memorable summer grilling experiences.
"In professional kitchens, trained staff and multiple safeguards ensure that food safety protocol is followed, but at home it's easy to let food safety practices be as casual as the food you are cooking on the grill," says Greg Beachey, senior academic relations and program manager with the National Restaurant Association Educational Foundation.
"Food safety is as important in the home as it is in restaurants to ensure safe and enjoyable meals for you and your family and friends. To underscore that importance, we collected tips from our professional food safety training experts and applied them to outdoor grilling at home or picnics."
The food safety tips recommended by the NRA for grilling at home are:
1. Wash your hands. Hand-washing is the first defense against cross-contamination - i.e. not spreading germs from one place to another. Wash hands before handling any food, and always after handling raw meats. To wash your hands properly, wet hands/arms with water as hot as you can comfortably stand; add soap; scrub hands/arms for 10 to 15 seconds (the time it takes to slowly recite aloud the "Pledge of Allegiance"); rinse with warm water; and dry hands with a single-use paper towel or hand-dryer, if available.
2. Pack your cooler correctly. Always keep cold foods cold; use a thermometer to make sure you are maintaining a temperature of 41°F or lower. Pack raw food that you intend to cook (like raw hamburgers) in a separate cooler from food that is already cooked and ready to eat, including beverages and produce. If you use ice in your raw foods cooler, don't use that ice for anything else.
3. Prep raw and ready-to-eat foods separately. Use separate cutting boards and other prep surfaces for raw and cooked food to minimize cross-contamination risk. A good way to remember which is which is to use different colored boards, for example red for meats and green for vegetables.
4. Use separate plates and utensils for raw and cooked foods. After putting raw burgers, chicken breasts or other meats on the grill, switch to clean spatulas, tongs and plates. Using the same utensils and surfaces for uncooked and cooked meats could lead to cross-contamination.
5. Cook food to safe temperatures. Raw meat and poultry could contain bacteria that can lead to food borne illness if not properly cooked. Because heat kills bacteria, be sure to cook hamburgers to an internal temperature of 155°F for at least 15 seconds. Chicken and turkey are safe at 165°F, and steaks and chops at 145°F. Always use a meat thermometer and measure the middle of the thickest part of the food.
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