Monthly Archives: May 2012

Important Credit Score Information

This is a follow-up to an earlier article about an excellent series from The Columbus Dispatch about significant errors of credit agencies combining the credit history of other people, usually family members or others with similar names, that have bad credit. Some of the stories really blew my mind- click to read the full articles:

Bad credit and other bad information on the reports prevents people from obtaining all sorts of loans, such as for cars or from their home equity. Bad credit rating can also effect employment, and cause auto and homeowner’s insurance rates to raise dramatically.

Credit reporting agencies are responsible for tracking our payment history on obligations like utility bills, mortgages, credit cards, and other debt, as well as using this information to compile a credit ratings for consumers. The reports also contain information about felony criminal records and addresses.

Normal problems are easy to corrected, such as small errors about late payments, or debt that has long since been repaid, by writing letters to the main credit reporting agencies. Often consumers have to make follow-up phone calls and send additional letters, but I understand that things usually get cleared up. It is just a pain to do so.

Everyone should check their credit history, usually for free through annualcreditreport.com and NOT freecreditreport.com. There you can get reports from Equifax, Trans Union, and Experian. If you find that your information is incorrect, quickly find out what you need to do to fix it, and then constantly followup until done so. This may turn into a part-time job for some, but is important. To know your rights and procedure you should follow, there are many excellent articles at www.ftc.gov:, start with Credit and your consumer rights.

Monday AM Launch, Memorial Day Thanks

John 15:13 Greater love has no one than this: to lay down one’s life for one’s friends.

Today we remember and are thankful for those in American history who have defended our country home and abroad in war.

Listed here is a partial list of the wars and conflicts. No one is able to list the thousands of operations members of our intelligence and special forces have been involved in.

  • The American Revolution 1775-1783
  • The War of 1812 1812-1815
  • United States Civil War 1861-1865
  • World War I 1917-1918 (American involvement)
  • World War II 1941-1945 (American involvement)
  • The Cold War 1945-1991
  • The Korean War 1950-1953
  • The Second Indochina War “Vietnam War” 1956-1975
  • U.S. Intervention in Lebanon 1982-1984
  • U.S. Invasion of Grenada 1983
  • U.S. Invasion of Panama 1989
  • Second Persian Gulf War “Operation Desert Storm” 1991
  • U.S. Intervention in Somalia 1992-1994
  • NATO Intervention in Bosnia 1994-1995
  • Kosovo War 1999
  • Attack on the World Trade Center and the Pentagon September 11, 2001 Terrorist Conflict
  • Afghanistan War (Operation Enduring Freedom) October 7, 2001-Present
  • Third Persian Gulf War “Operation Iraqi Freedom” March 19, 2003-Present

Learning to Cook to Save Money

Cooking is a lost art it seems these days. People today are very busy, working longer hours or multiple jobs, running children to events. Convenience and less hassle of fast food, and packaged meals are very tempting. Many people have gotten out of the habit, or never acquired skills in the kitchen. Family life suffers, as well as our diets. Restaurant and prepared foods are less healthy full of salt, fat and sugar. I know when I eat out I make bad decisions too, since I am in celebratory frame of mind.

Everyone is trying to save money, and eating out and packaged foods cost much more than cooking. When I counsel people in or near financial crisis, eating out and groceries usually consumes a large percentage of budgets. I can tell them to just ‘quit eating out!’ but sometimes that is too simple if knowledge and skills are missing; when they try to shop and cook more efficiently and don’t know how. Basic food items like oats, rice, beans, eggs, and fresh vegetables and fruit can be purchased for pennies per serving. Throw in more expensive but modestly priced items like frozen chicken breasts, ground meats used sparingly with rice, beans, and vegetables, meals will be more nutritious and less expensive. But unless someone is proficient in the kitchen, those foods will just sit in the pantry, refrigerator and never get used.

To help overcome this, there are several really cool books and websites to help. A few come to mind- the first one is E-mealz, it is a great service that helps to plan recipes and grocery shopping together, providing economical and tasty meals. For those wanting a little more pizzaz using basic lower cost ingredients, check out Web Cooking Classes Chef Todd Mohr can easily teach you over the web many cooking skills, sometimes using just whatever you have on hand, and have fun while you do it. Both of these services have a fee, but may just equate to one family’s meal out at moderately priced restaurant. Not only will you have more fun with your family, you will eat more delicious food, since most restaurant food and prepared foods aren’t very tasty!

Why did the Facebook IPO Fail?

The much followed initial public offering (IPO) of Facebook failed to be a runaway opening day success, by they way I warned you to be very cautious about IPOs like this on my February 1 2012 post. The first day of trading Friday May 18th, shares opened up at $42.50 about 11% higher than the initial public offering price of $38, closing today at $31, representing almost a 30% drop in value within a few days. This is a failed IPO, not a good start for this new public company, but one they will recover from.

Why did it fail to meet the wild expectations? Here are a few of my guesses…

  • Technology where the stock was being sold, the National Association of Securities Dealers Automated Quotations or NASDAQ, was unable to handle the demand
  • A few days before the IPO a few large companies announced that they thought the advertising value of Facebook was overrated
  • The expectations were set too high by the media and investment talking heads
  • Too many shares were issued

This IPO is looking to be controversial from the start…

  • Two top regulators said the IPO should be reviewed (source Reuters)
  • Regulators looking into Morgan Stanley’s sharing of analyst’s negative reports with some institutional investors but not others (think retail buyers)
  • There could be lawsuits involving Facebook, NASDAQ and shareholders involving the fumbled IPO, considering the 30 billion dollar loss in shareholder equity
  • Today the Securities and Exchange Commission Chairman said they will examine “issues”

What can we learn from this, so that our personal financial management is wise?

  • Stay away from most IPOs, especially hyped ones
  • Be extra careful about industries that don’t have a proven track record of profitability
  • Media investment people are often wrong, so we should take their advice with many grains of salt

What can Facebook and other new hot up-and-coming social media companies learn from this? Perhaps they are not as smart as it seems they are perceived to be. Be wary of the advice of investment bankers and market makers involved in your IPO and get many second opinions. Maybe do a better job of employing social media to help you assess value, plan and market your IPO.

How to save on groceries at 3 major chains

It is not easy for the novice grocery store shopper to find ways that each chain has it for you to save money. In Columbus Ohio where we live, the biggest chain grocery stores are Kroger, Giant Eagle and Meijer, and each one has tricky ways to sign up for or find special savings. We have outlined a few things that might help you.

KROGER

  1. First go to their website
  2. Sign in to your account, look for the Kroger Plus card in the upper menu bar, or
  3. In the center of the screen you will see a SAVE MORE WITH DIGITAL COUPONS, click the get started button
  4. Sort your special digital coupons by using the drop down menu, choosing either expiration, popularity, value or most recent
  5. ‘Clip’ the coupons that you intend to use when you shop
  6. When checking out at the cashier, be sure to use your Kroger Plus card for her to scan, they will appear when you checkout at the register
  7. When clipping you can click on ‘more info’ and a screen will appear with more information about that coupon
  8. You can also print them out and take them with you, however that will cost you money for printer ink and paper, not eco-friendly and some people’s computers don’t always print coupons easily

GIANT EAGLE

  1. Get a Giant Eagle Advantage card
  2. Set up for an account at their website by clicking Register in the upper right hand corner
  3. On the Giant Eagle home page, go to the button with ‘Clip’ in it, in the lower right corner click >start clipping
  4. ‘Clip’ the coupons you want to use
  5. When checking out at the cashier, be sure to use your Giant Eagle advantage card for him to scan, they will appear when you checkout on the register
  6. You can also print them out and take them with you, however that will cost you money for printer ink and paper, not eco-friendly and some people’s computers don’t always print coupons easily
  7. In the upper menu bar, click the Save button to learn more about fuelperks, etc.

MEIJER has two programs outlined here, you can use both and stack them as well as use manufacturers coupons too, even better if something is on sale for 4 times the savings, Giant Eagle and Kroger discontinued this

  1. Go to their website
  2. Scroll down and click on Meijer  Mealbox
  3. Click on ‘Specials’ tab
  4. To choose your coupons click on ‘Ad to Shopping List’ for each coupon you want – then click okay
  5. Click the next button to view more pages of coupons
  6. Click on the ‘Shopping List’ tab
  7. Click ‘Print List’
  8. Un-select the ‘Shopping List’ √ (unless you want to use the shopping list features)
  9. Click on ‘Print’

MEIJER for cell phone ‘mPerks’

  1. Sign up and sign in for mPerks with your cell phone number and personal identification number – PIN
  2. Redeem coupons at checkout using your Cell number and PIN
  3. Print or email yourself the shopping list, click the ‘Print Coupon List’ or ‘Email Coupon List’

Monday AM Launch, Waiting is Key to Wealth

Lately I have been wondering what are the hardest things to do.  Some may say thing like running a marathon or taking an advanced math class. Yes those are probably hard, but for me getting up early on Monday morning is definitely in my top ten. Eating and exercising regularly are up there too. But probably the most difficult thing for me to do is wait. Patience as defined by Dictionary.com:

  1. the quality of being patient, as the bearing of provocation, annoyance, misfortune, or pain, without complaint, loss of temper, irritation, or the like.
  2. an ability or willingness to suppress restlessness or annoyance when confronted with delay: to have patience with a slow learner.
  3. quiet, steady perseverance; even-tempered care; diligence: to work with patience.

Patience may be one of the keys of building financial wealth and avoiding mistakes. When we are patient we push through our annoyance of being inconvenienced, or being delayed in what we want without being irritated or angry. People that are able to do this enter a state of happiness, joy and thankfulness in their present circumstances. Maybe this is the secret of contentment the apostle Paul spoke about.

When we are not willing to wait, we spend savings, we borrow, and we spend next week’s paycheck before we receive it. I am not expert in stock investing, but there is one thing that I can guarantee that stocks will do — the stock market will go up and down. Many bad investment decisions that novices make with well designed investment portfolio is when they don’t wait for it do what it is designed to do, and they buy high and sell low.

Prosperity preachers, are those ministers that promise that if you give to their ministry ‘seed offerings,’ or just believe and have faith that you will have abundance. A friend of mine was once told by his minister to borrow to buy a BMW that God would bless their efforts of faithful belief in the things He was going to do for them. In a sick way these kinds of messages feed off our difficulty with patience.

Is patience a rare quality? Is the person behind you at grocery store in a hurry for you to make it through the line as you struggle to quickly empty your basket and give the cashier your coupons? Is the person behind you on the freeway too close to your bumper? Are the people you are dealing with at work anxious with you to get their answers and finish the project?  Patience is a particularly difficult quality for American’s to exhibit, because in our instant gratification society of fast foods, rapid highways and wealth, we expect to get everything quickly. Where do we get help to develop this particular trait, well I don’t know of anywhere else than religion that teaches patience, and the Bible provides some excellent guidance.

  • Patience is a by-product of living a life not according to our agenda but the Holy Spirit’s: Galatians 5:22-23 But the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, self-control; against such things there is no law.
  • Patience is a way of dealing with others in love: Ephesians 4:1-3 I therefore, a prisoner for the Lord, urge you to walk in a manner worthy of the calling to which you have been called, with all humility and gentleness, with patience, bearing with one another in love, eager to maintain the unity of the Spirit in the bond of peace.
Patience is a lifestyle of living in joy, walking with the Father, and has long-term payoffs:
  • Colossians 1:11-12 May you be strengthened with all power, according to his glorious might, for all endurance and patience with joy, giving thanks to the Father, who has qualified you to share in the inheritance of the saints in light.
Patience is on the most difficult things to have, but having patience brings along peace and joy, and for some it may have financial blessings, not just eternal ones.
 
Prayer: Lord help me to walk in your Spirit, walk in humility and love towards all those around me. Lord strengthen me with all of your power to walk in joy, patience and endurance. Thank you for all of the wonderful things you have blessed me with.

What does the JP Morgan Chase loss mean to you?

There has been constant chatter about JP Morgan Chase’s $2 billion loss on the news, but what does it really mean to you with your personal finances?  How will it affect you?

If you own their stock, you have experienced at 12% reduction in value, but it will probably recover in time. If you bank at Chase, will your savings rates go down, or borrowing rates go up? Probably not. Is your money still secure? Yes reports say the bank is financially secure, and has been one of the stronger banks throughout the great recession. If Chase is your investment manager, should you be concerned? Probably not, unless you are an institutional investor and Chase helps to manage your multi-million dollar portfolio, you may want to have some long conversations to make sure they are not applying the same investment methodology. So in my estimation, JP Morgan Chase’s loss means very little to the average person’s personal finances. Perhaps the only take away for us is for their loss to serve as a reminder that “If you don’t understand it, don’t invest in it.”  It seems that the derivatives employed by Chase were too complex even at their level of sophistication to use wisely.

Monday AM Launch: It’s what we do

Today’s financial devotional Bible verse:  Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is —his good, pleasing and perfect will. Romans 12:2

Someone once said what we are or what we do speaks louder that what we say. This is a convicting statement for parents, people in the public arena, and for people of faith. Followers of Christ are especially in the spotlight, since He demonstrated a life that is supposed to be lived much differently.

A few days ago I was at a memorial service and the minister said (paraphrased) during these difficult and sad times, we also celebrate, and we hope,  ” As Christians it’s what we do.” This message really struck me and has stuck with me since. Thinking about what Jesus life was like, he didn’t take the easy path. He was offered the world when tempted by Satan, but instead choose to live a life of humble means. Jesus never took the easy way out, even though he asked his father to let his cup pass on the eve of his death. He chose to follow his Father’s will even though it was of pain and death. Jesus served when he was tired, prayed when exhausted, loved when hated, had few belongings when he could have had a rich kingdom, and forgave while hanging on a cross.

One of hardest thing for Christians to do, is to not be conformed to the patterns of the world as Paul wrote in his letter to the Romans. We choose the eternal, the harder path, the journey that doesn’t always lead to wealth (contrary what we might hear from prosperity preachers), because “It’s what we do!”

Going back to the second part of Romans 12:2 Christians want to know “what God’s will is,” for wouldn’t life by easier if we only knew what His will for us, so that we could follow that path? Wouldn’t it by nice to have clear direction, wouldn’t life be more successful, if not maybe just simpler if we only knew the mind of God? But if Paul is right, then we must first “not conform to the pattern of the world.”

Not conforming to world’s patterns has more ramifications to our financial life, perhaps more that any other area of life. When burdened by debt, Christians don’t take the easy way out, we get second jobs, we cut back, it’s what we do. We take jobs that pay less, pursuing careers  for higher goals, not just maximizing wealth, it’s what we do. Instead of upgrading our cars and homes, we increase our giving to help others, because it is what we do, we might even downsize. We help other people get promotions, instead of politicking for our own, because it is what we do. When working in a difficult work environment, we don’t complain and justify poor performance, we work harder and joyously, because it is what we do.

Prayer: Lord shine your light on my life, help me to follow you and your teachings, not to take the easy path, not to conform to the patterns of the world.

Life Insurance Essentials

Life Insurance Defined
Insurance providing for payment of a sum of money to a named beneficiary upon the death of the policyholder. In other words, it is insurance of a risk (death) to replace the financial loss suffered by those dependent on the deceased.

History of Life Insurance
Life insurance is nothing new, its history spans back several hundred years. The original policies were simple term insurance policies. The contract was for the term of one year. Each year it renewed, with an increased premium because the person was a year older, and presumably closer to death.

To address this increasing premium dilemma—the older you became the more difficult it was to pay the premiums. About 100 years ago, insurance companies issued policies that insured for entire lifetimes (hence the term “whole-life”) with a level premium, which means the premium payments did not change. These whole-life policies have a cash value that provides the ability to borrow or access cash values.

Historically, life insurance existed to pay the cost of the funeral and last expenses, such as debt. Most people could not afford to purchase a policy that provided for much more. Neighbors and relatives pitched in to help after a death. Churches, Widow and Orphan Societies, and Fraternal Organizations were social service organizations that also helped.

The later part of the last century witnessed an explosive evolution in the life insurance industry. The reason is simple: The rapidly evolving post WWII society. Life insurance rode the wave of the biggest population growth ever seen. Our society has changed from agricultural to industrial and white-collar. People are living longer with vastly larger incomes and savings. Life insurance has evolved to keep pace with the ever-changing needs driven by all of this change.

The Special Treatment of Life Insurance
Life insurance is not only unique because it provides a sum of money when you die; it receives special treatment by the tax code and regulatory agencies. This has provided opportunities for insurance companies to provide a wide array of options. These diverse options confuse many consumers.

Tax Code: Life insurance has historically been an “insurance” product. Meaning it existed for safety and security. Therefore, the insurance industry has always been successful at maintaining favorable tax status, meaning they could lobby for continued favorable tax treatment. They have found it easy to appeal to legislators in Washington DC to keep life insurance from being threatened by tax law changes.

Life Insurance’s favorable tax status includes a tax-free death benefit, tax-deferred cash value accumulation, and tax-free borrowing of cash value (as long as the policy is not a modified endowment contract that remains in force until death).

Regulatory Agencies: The insurance and securities regulatory agencies provide life insurance companies an advantage over providers of other investments: Insurance companies can provide sales literature with futuristic computer illustrations of cash values.

Types of Life Insurance: An Overview
The simplest way to illustrate the different types of life insurance is to compare them on a grid.

Insurance Brief Description Advantages Disadvantages Other
Term Lowest initial premium. Most financial experts and commentators recommend term as the best alternative for most people. Low initial cost leaves more cash flow available for other financial planning needs. No cash value buildup. If someone wants to continue it for a long period of time, the cost will be high. Premium can go up annually or be guaranteed level for 5, 10, 15 and 20 years or longer to match the length of time you need the protection.
Universal Life Can provide protection for a longer period of time than term, and build up cash value. Not as expensive as variable universal and whole life, but may provide life insurance for a longer period of time than term and provide cash value for borrowing (or if surrendered). Higher initial cost than term insurance. Cash value accumulation may not be a good investment. There are many variations of universal life available today. For example, some have a low premium for a long period of time but with little cash value, while others are designed for cash value growth.
Variable Universal Life Same as universal life except that it allows for the cash value to accumulate in separate sub-accounts. In addition to the features mentioned for regular universal life, it also allows for accumulation of cash value growth potentially higher due to sub-account options. Cash value may have fewer guarantees than universal life and whole life. The policy’s internal charges can be quite high. Some proponents of this insurance promote the tax advantage opportunities for growth and income.
Whole Life Highest premium life insurance available, most types provide guaranteed protection for lifetime and cash value buildup. Maximum guarantees. High premium not affordable to many. High net-worth people sometimes utilize whole life insurance to help pay for their estate taxes. Universal and Variable universal are also used for this purpose.
This is a very brief synopsis to aid in your insurance education. There may be exceptions to some of these generalizations due to state regulations and insurance company policy design.

Summary

  1. Evaluate Life Insurance Needs: Only purchase additional life insurance if you have a need for it. First examine the amount of life insurance that you need to provide for those financially dependent on you. A later blog will discuss various means for calculating your needs, younger families often use the rule of thumb of the death benefit should equal 10 times income, but you should talk to a financial planner, or an insurance professional to help you arrive at the right amount for you.
  2. Purchase Life Insurance for Protection: The first priority for purchasing insurance should be for protection. It is most important that people, who need insurance purchase it and start their coverage without delay. At the very least, procure term life insurance with an appropriate death benefit, and term period, at a competitive premium. Term insurance provides the most economical decision for most middle-income people today. Most financial experts and commentators recommend term insurance for most people since it provides the most amount of protection at the lowest cost, enabling you to save and invest.
  3. Purchasing Cash Value Life Insurance: The decision to purchase cash value life insurance should be made in tandem with the outcome of your financial plan. Most people’s first priorities are the proper funding of their retirement and other plans. After people have implemented the proper action steps in their financial plan, they may want to consider cash value life insurance for longer term needs. Seek advice from a trusted financial professional to help evaluate the appropriate options. A close examination of a contract should include not only attractive illustrations and sales literature, but a thorough analysis of their prospectuses and fully disclosed information. Insurance agents should provide best, good and worst case illustrations. Remember insurance agents are paid vastly more commission for permanent cash value insurance, so some may feel pressure to sell this.
  4. Life Insurance as an Estate Planning Vehicle: People with large net worth may want to consider life insurance as a viable legacy planning tool to aid in liquidity and estate and tax planning. They should consult their estate planning attorneys and financial planners for direction.

Retiree Health Care Costs Increasing

According to a study by Fidelity Investments a couple retiring this year will incur $250,000 in costs not covered by Medicare Parts A and B. Those with medi-gap or employer based retiree health insurance will have less expenses. Many companies today either do not provide or are cutting back on retiree health care, so they probably should include high estimates when calculating their financial needs during retirement.

Credit Score News

The Columbus Dispatch reported significant errors of credit agencies combining the credit history of other people, usually family members or others with similar names, that have bad credit. Bad credit and other bad information on the reports prevents people from obtaining all sorts of loans, such as for cars or from their home equity. Bad credit rating can also effect employment, and cause auto and homeowner’s insurance rates to raise dramatically.

Credit reporting agencies are responsible for tracking our payment history on obligations like utility bills, mortgages, credit cards, and other debt, as well as using this information to compile a credit ratings for consumers. The reports also contain information about felony criminal records and addresses.

Normal problems are easy to corrected, such as small errors about late payments, or debt that has long since been repaid, by writing letters to the main credit reporting agencies. Often consumers have to make follow-up phone calls and send additional letters, but I understand that things usually get cleared up. It is just a pain to do so.

Everyone should check their credit history, usually for free through www.annualcreditreport.com NOT freecreditreport.com. There you can get reports from Equifax, Trans Union, and Experian. If you find that your information is incorrect, quickly find out what you need to do to fix it, and then constantly followup until done so. This may turn into a part-time job for some, but is important. To know your rights and procedure you should follow, there are many excellent articles at www.ftc.gov:, start with Credit and your consumer rights.

Good time to buy

There are many times throughout the year to buy certain items, or to check on things that might save you money!

  1. The Spring is a good time to buy a refrigerator, since that is when new models come out and manufacturers are trying to get rid of old models
  2. The Fall is a good time to buy other major appliances, since that is when these new models are coming to market
  3. The end of the year is often a good time to buy a new automobile, for the same reasons as appliances
  4. The end of the year may be a good time to buy a used car, since many people may be considering new ones, or come the change in the year, the car is a year older, and worth less- better for the buyer
  5. End of the Spring is a good time to buy lawn and garden goods since many nurseries are trying to get rid of inventory that they don’t want to care for any more- negotiate great deals on plants and lawn equipment too (the Fall is good for that too)
  6. Right after the Holidays is a great time to get steals on wrapping paper and ornaments
  7. Furniture sales can be excellent at their outlet stores, tent sales and around the time of the primary Furniture Market Trade Shows in High Point, North Carolina in April and October

There are a lot of other good times to buy things, just think when they are going to be out-of-season, such as lawn furniture and barbeques after the summer rush is over.

Monday AM Launch, The Prodigal Sons

This week’s financial devotional verses: Luke 15:11-32

Part I: The break

Jesus continued: “There was a man who had two sons. 12 The younger one said to his father, ‘Father, give me my share of the estate.’ So he divided his property between them. 13 “Not long after that, the younger son got together all he had, set off for a distant country and there squandered his wealth in wild living. 14 After he had spent everything, there was a severe famine in that whole country, and he began to be in need. 15 So he went and hired himself out to a citizen of that country, who sent him to his fields to feed pigs. 16 He longed to fill his stomach with the pods that the pigs were eating, but no one gave him anything.

  1. Verses 11 and 12 he was given a share of his estate: It is interesting to see that the son desired his inheritance early before his father died. This is reminiscent of most of us in our youth, when we want more responsibility than we have the maturity to handle. When we want it all now and are not willing to wait, when we don’t want to put in the long years of hard work, but want to have fun now. Sometimes we can identify with this when we look back or of our imaginations today when we consider inheritances we might receive
  2. Verse 13 he set off to a distant country: Sometimes we want to do things in secret, or without the advice of counsel because we may feel that we know better
  3. Verses 14, 15 and 16 he ran out of money and faced a famine: This is significant especially for us today, for many of us have not only run out of money, but our unfortunate financial circumstances occurred during this Great Recession, forcing us into taking jobs that pay less or are humbling.
Part II. the return

17 “When he came to his senses, he said, ‘How many of my father’s hired servants have food to spare, and here I am starving to death! 18 I will set out and go back to my father and say to him: Father, I have sinned against heaven and against you. 19 I am no longer worthy to be called your son; make me like one of your hired servants.’ 20 So he got up and went to his father. “But while he was still a long way off, his father saw him and was filled with compassion for him; he ran to his son, threw his arms around him and kissed him. 21 “The son said to him, ‘Father, I have sinned against heaven and against you. I am no longer worthy to be called your son.’ 22 “But the father said to his servants, ‘Quick! Bring the best robe and put it on him. Put a ring on his finger and sandals on his feet. 23 Bring the fattened calf and kill it. Let’s have a feast and celebrate. 24 For this son of mine was dead and is alive again; he was lost and is found.’ So they began to celebrate. 

  1. In verses 17 – 19, he came to his senses, realized his mistakes and desired to return home: Just like the nation of Israel, in its endless cycle of not following God, facing trouble, and ultimately repenting, the prodigal son like you and I see our past mistakes, want to make amends for them, and have renewed relationship with community and God. Financially speaking many of us need renewed balance sheets, and higher paying jobs like before the recession.
  2. In verses 20 and 21, the son repents, and the father’s heart leaps for joy. The father here like our God is heaven rejoices at our return to fellowship, leads us to repentance, passionately hugs us not looking through us and back at our sin
  3. In verses 22 through 24, the father, like God not only rejoices, but he blesses him and us with many good things upon our return. As many of us fight our way back from bad circumstances and decisions, God blesses us along the way, sometimes financially, sometimes in other ways such as with intimate relationship with him we may not have ever experienced.

Part III. The brother who didn’t suffer bad decisions and circumstances

25 “Meanwhile, the older son was in the field. When he came near the house, he heard music and dancing. 26 So he called one of the servants and asked him what was going on. 27 ‘Your brother has come,’ he replied, ‘and your father has killed the fattened calf because he has him back safe and sound.’ 28 “The older brother became angry and refused to go in. So his father went out and pleaded with him. 29 But he answered his father, ‘Look! All these years I’ve been slaving for you and never disobeyed your orders. Yet you never gave me even a young goat so I could celebrate with my friends. 30 But when this son of yours who has squandered your property with prostitutes comes home, you kill the fattened calf for him!’ 31 “‘My son,’ the father said, ‘you are always with me, and everything I have is yours. 32 But we had to celebrate and be glad, because this brother of yours was dead and is alive again; he was lost and is found.’”

  1. Verses 25 through 30 the brother is mad at the father for blessing the son. Some of us who are not going through financial difficulty during this recession, may look down on others who are and be judgmental, and may not help them, or not rejoice for them when good things come their way.
  2. Verses 31 and 32 the father reminds the brother and us that he like God rejoices at new life, and loves to bless the repentant, and to bless those that didn’t go through this.

This message stands us a constant reminder of God’s unboundless blessings, love and grace for all of us, both the constant follower and repenter.

Personal Savings Rate Decreases

Source: Wall Street Journal

The U.S. personal savings rate has been decreasing this year. Looking back at 2011, it has been steadily decreasing from 5.2% in January to 4.30% in September, but it began to increase by the end of the year to 4.70%. Although March showed a slight increase to 3.80%, the overall savings rate is not good from the perspective of individuals accumulating reserves for emergencies and other needs. This might be a good indication of individuals paying off debt since debt has high interest rates, and saving accounts, CD and money market accounts are paying less than 1% these days. Short sighted economist see this has having positive ramifications for the economy that consumers are spending more money.

New Short-Sale Rules

Source: Kenneth Harvey LA Times

A real estate short-sale occurs when someone sells their home for less than they owe the bank. People considering them are trying to get out of a mortgage payment they can’t afford, usually caused by unemployment, health care bills, divorce, or over use of debt related to these circumstances or not.  Sometimes the bank considers the sale as paid and full, and doesn’t seek to recover their loss through collections or legal means. The lender could change their mind and seek to recover their loss later, only time will tell. Forgiven debt may have tax ramifications, so sellers should talk to their tax advisor.

Lenders have been slow to respond to short-sale offers by qualified lenders, and often the deal falls apart, and the seller is back to where they started. The foreclose process continues, and either their financial situation improves, or the bank comes through with a loan modification: lower mortgage amount or interest rate in an effort to keep people in their home. There is federal funds to help with this, but it requires a cooperative lender.

To help speed the short-sale process, and if the loan is a Fannie Mae or Freddie Mac, short-sale requests to lenders will have about a 30-day response turnaround, and a final decision in not more than 60 days. This change is being imposed by the Federal Housing Finance Agency.

If you are in a financial situation where you are trying move on to more affordable housing, and don’t want to do the more drastic ways to dump your house like foreclosure or bankruptcy, this might be a solution for you. It is a win for the lender too when ever they can secure a new mortgage with a qualified buyer, instead of selling it in a sheriff sale for much less, add to that the risk of many months of vacancy, no maintenance, and thieves prey on the plumbing and appliances.