Today is an important day. I have been in a four year fight with SunTrust. It seems like they will never learn. The lawsuit that I filed against them in December has been settled. Although the exact terms of the settlement are confidential, I can say that I received a 5 figure settlement. That is the second time that they have paid me 5 figures within the past year. In the settlement, I agreed to hold them harmless for everything that they had done as of the date of the settlement.
The day after the settlement was signed, they again violated the court's order. I am going to wait a couple of months for them to do it a few more times, and I will sue them again. Sooner or later, they will get the message.
Showing posts with label Financial Mess. Show all posts
Showing posts with label Financial Mess. Show all posts
Friday, May 2, 2014
Wednesday, January 1, 2014
Law change will cost you
As of today, the Mortgage Forgiveness Debt Relief Act expires, as it was not renewed by Congress. This is a HUGE problem for underwater homeowners. Let me explain:
Underwater homeowners often try to negotiate with their bank so that they can sell their homes for less than they owe in a short sale or have their mortgage balance reduced. But the difference between what the homeowner owes and the lower sales price approved by the bank is considered income for the homeowner and subject to tax by the Internal Revenue Service.
For example, someone with a $100,000 mortgage who is allowed to sell their house for $80,000 is supposed to pay taxes on the remaining $20,000.
But the Mortgage Forgiveness Debt Relief Act saved such homeowners from the tax burden. Last year, Congress rushed to extend the law during negotiations about the fiscal cliff but only through the end of 2013.
They did not do so this year. This means that the IRS will consider a short sale to be INCOME, even though the homeowner took a loss in selling his home for less than what he paid for it.
So let's say that you borrowed $240,000 for your home in 2007. The bank allows you to short sell it in 2014, and you get $100,000. That $140,000 difference will count as income, and if you are married and each earn around $45,000 a year, you are now considered subject to the taxes that the evil rich must pay. Your tax bill will be about $45,000 higher than it otherwise would.
Hope this doesn't keep you up at night.
Underwater homeowners often try to negotiate with their bank so that they can sell their homes for less than they owe in a short sale or have their mortgage balance reduced. But the difference between what the homeowner owes and the lower sales price approved by the bank is considered income for the homeowner and subject to tax by the Internal Revenue Service.
For example, someone with a $100,000 mortgage who is allowed to sell their house for $80,000 is supposed to pay taxes on the remaining $20,000.
But the Mortgage Forgiveness Debt Relief Act saved such homeowners from the tax burden. Last year, Congress rushed to extend the law during negotiations about the fiscal cliff but only through the end of 2013.
They did not do so this year. This means that the IRS will consider a short sale to be INCOME, even though the homeowner took a loss in selling his home for less than what he paid for it.
So let's say that you borrowed $240,000 for your home in 2007. The bank allows you to short sell it in 2014, and you get $100,000. That $140,000 difference will count as income, and if you are married and each earn around $45,000 a year, you are now considered subject to the taxes that the evil rich must pay. Your tax bill will be about $45,000 higher than it otherwise would.
Hope this doesn't keep you up at night.
Saturday, September 21, 2013
Good business, if you can get it
The median household income of my county is just about $44,000 a year. That is for a two income household in most cases. That is down from $47,000 just two years ago, which mirrors the nationwide decline of incomes that 35 of the 50 states saw this past year.
Washington, DC doesn't have that problem. The median income there rose to $88,000- the highest of any metro area in the nation. This is due to the massive growth in the Federal government under the Obama administration, and the lawyers and lobbyists that this growth is bringing to the nation's capitol.
What makes this trend REALLY disturbing is just how much the size of government is increasing: the poor in DC are getting even poorer, with the number of households making less than 50% below the poverty line increased. The poverty threshold for a family of four that includes two children under 18 was $23,283 in 2012, meaning that to be in deep poverty, that family of four would have to earn less than $11,641 a year.
So in order for median incomes to rise in DC, they have to overcome the increase in poverty, plus increase the median income. Think about that.
This is the Obama that the poor voted for: Blacks have a 27% poverty rate, and yet they vote for the man that put him there, simply because he is black.
Washington, DC doesn't have that problem. The median income there rose to $88,000- the highest of any metro area in the nation. This is due to the massive growth in the Federal government under the Obama administration, and the lawyers and lobbyists that this growth is bringing to the nation's capitol.
What makes this trend REALLY disturbing is just how much the size of government is increasing: the poor in DC are getting even poorer, with the number of households making less than 50% below the poverty line increased. The poverty threshold for a family of four that includes two children under 18 was $23,283 in 2012, meaning that to be in deep poverty, that family of four would have to earn less than $11,641 a year.
So in order for median incomes to rise in DC, they have to overcome the increase in poverty, plus increase the median income. Think about that.
This is the Obama that the poor voted for: Blacks have a 27% poverty rate, and yet they vote for the man that put him there, simply because he is black.
Wednesday, September 18, 2013
Continuing Shenanigans
For those just joining us:
I had a house that lost its value in the real estate crash. I declared bankruptcy, and was going to turn the house over to the bank. The bank testified in court that they were the owner of the note and the mortgage, but I caught them lying. They had sold the note and mortgage to Fannie Mae, two year earlier. I sued, and we settled out of court for almost 10 grand. They then sold the note and mortgage again, this time to Nationstar mortgage. They recorded the sale in the county clerk's office.
Then SunTrust tried to foreclose. The foreclosure was dismissed, and Nationstar claimed to not have any record of owning the mortgage.
The feds stepped in and sued the banks. I got another $4,000 in THAT lawsuit.
SunTrust continued to send me demands for payment, even though prohibited from doing so by the bankruptcy court, and the fact that they no longer own the note and mortgage. So after a few years of this, I got tired of it and sued again in May of this year (the hearing was in June). This time, the court awarded me $14,700 and instructed SunTrust to have no further contact with me.
The next day, SunTrust began sending letters and leaving notes on my door. Since that court date in June, I have gotten 2 letters, 5 notes on my door, and two phone calls.
Today, I get a letter from SunTrust, telling me that they have sold my note and mortgage, and effective October 1, 2013, I should send my payments to yet another bank. I am thinking that this is going to be my new career.
Bankruptcy is supposed to allow you to start over. It has been four years, and this bank STILL will not leave me alone.
I had a house that lost its value in the real estate crash. I declared bankruptcy, and was going to turn the house over to the bank. The bank testified in court that they were the owner of the note and the mortgage, but I caught them lying. They had sold the note and mortgage to Fannie Mae, two year earlier. I sued, and we settled out of court for almost 10 grand. They then sold the note and mortgage again, this time to Nationstar mortgage. They recorded the sale in the county clerk's office.
Then SunTrust tried to foreclose. The foreclosure was dismissed, and Nationstar claimed to not have any record of owning the mortgage.
The feds stepped in and sued the banks. I got another $4,000 in THAT lawsuit.
SunTrust continued to send me demands for payment, even though prohibited from doing so by the bankruptcy court, and the fact that they no longer own the note and mortgage. So after a few years of this, I got tired of it and sued again in May of this year (the hearing was in June). This time, the court awarded me $14,700 and instructed SunTrust to have no further contact with me.
The next day, SunTrust began sending letters and leaving notes on my door. Since that court date in June, I have gotten 2 letters, 5 notes on my door, and two phone calls.
Today, I get a letter from SunTrust, telling me that they have sold my note and mortgage, and effective October 1, 2013, I should send my payments to yet another bank. I am thinking that this is going to be my new career.
Bankruptcy is supposed to allow you to start over. It has been four years, and this bank STILL will not leave me alone.
Saturday, July 27, 2013
Foreclosure scams
A new chapter in the Florida foreclosure mess has opened, as real estate scammers are renting out homes that are to be foreclosed, by posing as the home's owner. In this case, a pair of cops were arrested for the scheme. This is possible, because it takes years to foreclose a home, thanks to the criminal activity of the banks themselves.
People who are caught up in the fraudulent foreclosure system, where the banks gave loans to people that they knew couldn't afford them, so that those people could buy homes that were selling for far more than they were worth. The banks then paid appraisers to overstate the homes' value, and sold the loans off to investors before the first payment was due by calling them mortgage backed securities. The securities were rated as top notch investments by ratings firms, even though they were subprime loans. They created a company called "MERS" to aid in obscuring the fraud by taking mortgage transfers out of the public record and hiding them in a maze of private files.
The homebuyers soon defaulted, crashing the economy, and the entire deck of cards collapsed. The banks moved to foreclose, but had destroyed the paperwork. A savvy lawyer working in Jacksonville discovered the lack of notes and mortgages, and people began fighting the foreclosures. The banks responded by "creating" and forging paperwork. Banks were reportedly calling this the "art department."
They got caught, and lost quite a bit of money. In February of 2012, several banks came to a settlement with the federal government, where the banks paid $25 billion for wrongfully foreclosing on people's homes. The agreement settles state and federal investigations finding that the country’s five largest mortgage servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct. Both of these practices violate the law. Federal and state governments received the lion's share of the money, and only $1.5 billion went to reimburse the people whose homes were stolen through this fraud. The politicians are bought and paid for. Of course, the homeowners are still able to pursue their own court actions.
This had the effect of slowing the foreclosure process, because in many cases, the banks cannot prove that the homeowner owes them any money. So now the other scammers move in: people are posing as the homeowner of vacant homes (sometimes the banks themselves), and are renting them out and pocketing the money. It is an added slap in the face that some of the criminals doing this are also the very police that are supposed to prevent that sort of thing.
People who are caught up in the fraudulent foreclosure system, where the banks gave loans to people that they knew couldn't afford them, so that those people could buy homes that were selling for far more than they were worth. The banks then paid appraisers to overstate the homes' value, and sold the loans off to investors before the first payment was due by calling them mortgage backed securities. The securities were rated as top notch investments by ratings firms, even though they were subprime loans. They created a company called "MERS" to aid in obscuring the fraud by taking mortgage transfers out of the public record and hiding them in a maze of private files.
The homebuyers soon defaulted, crashing the economy, and the entire deck of cards collapsed. The banks moved to foreclose, but had destroyed the paperwork. A savvy lawyer working in Jacksonville discovered the lack of notes and mortgages, and people began fighting the foreclosures. The banks responded by "creating" and forging paperwork. Banks were reportedly calling this the "art department."
They got caught, and lost quite a bit of money. In February of 2012, several banks came to a settlement with the federal government, where the banks paid $25 billion for wrongfully foreclosing on people's homes. The agreement settles state and federal investigations finding that the country’s five largest mortgage servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct. Both of these practices violate the law. Federal and state governments received the lion's share of the money, and only $1.5 billion went to reimburse the people whose homes were stolen through this fraud. The politicians are bought and paid for. Of course, the homeowners are still able to pursue their own court actions.
This had the effect of slowing the foreclosure process, because in many cases, the banks cannot prove that the homeowner owes them any money. So now the other scammers move in: people are posing as the homeowner of vacant homes (sometimes the banks themselves), and are renting them out and pocketing the money. It is an added slap in the face that some of the criminals doing this are also the very police that are supposed to prevent that sort of thing.
Friday, July 26, 2013
Cooking the books
I will no longer post about the country's national debt. That number, as reported by the treasury, is no longer accurate. According to the US treasury, the national debt has remained the same (it is actually about $700 million lower) since May 31, at $16.738 trillion. Are you telling me that the Federal government has not spent any money in the past two months?
The books are either being cooked by changing accounting methods in a way that would have a private sector accountant thrown in jail, or the government is monetizing the debt like nobody's business, meaning that inflation, and lots of it, is on the horizon.
Either way, those figures are now meaningless.
The books are either being cooked by changing accounting methods in a way that would have a private sector accountant thrown in jail, or the government is monetizing the debt like nobody's business, meaning that inflation, and lots of it, is on the horizon.
Either way, those figures are now meaningless.
Saturday, May 4, 2013
Minimum wage again
The Obama administration is talking about a minimum wage hike. The one that has been proposed is a hike to $10.10 an hour, which equates to $21,000 a year. The Federal poverty level for a family of four is $22,320, and for a single person is $10,890. So Obama's plan will wipe out poverty, right?
Wrong.
Coming on the heels of the massive costs involved with Obamacare, it would cost $12,000 more per year to hire a new worker than it did when Obama took office. Employers are not bottomless pockets full of money. In order to afford these new, higher wages, employers will have to do one of three things: cut costs, raise prices, or a combination of the previous two. Most likely, this will be done as a combination of the previous two. The first effect will be fewer jobs.
The second effect will be pay compression. Let me give an example: In 2004, workers in Florida followed the Federal minimum wage law. The minimum wage in Florida was the same as the Federal wage, $5.15 an hour. In those days, an unskilled position like fry cook at KFC started at about $6.50 an hour. A semi skilled position, EMT, started at $8 an hour. A skilled position, Paramedic, started at $14 an hour.
In 2005, the voters of Florida put a law in place that increased the state minimum wage each year. (Here it is - pdf warning) Right now in Florida, an unskilled position like fry cook at KFC starts at about $8 an hour. A semi skilled position, like EMT currently starts about $9 an hour. A skilled position like Paramedic starts at about $13 an hour. So, the minimum wage in Florida increased by $2.64 (a 51% increase) over 7 years, and while the wages of unskilled labor climbed by 23%, the wages of semi-skilled laborers climbed by only 12.5%, and skilled labor actually fell by 7%. Factoring in inflation, and unskilled laborers were the only ones who saw an increase. This is illustrated in this Sentinel article. About three quarters of the way through the article,
Inflation brings us to the second way that employers react to an increase in labor costs: they raise prices. They pay for the wage increases and the increased costs of providing health insurance by raising prices.
One of the biggest complainers about the minimum wage law is waiters and waitresses. They have a "tipped minimum wage" that is only $2.13 an hour. They claim that this places them below the poverty level. I claim bullshit. I know your game. Waiters and waitresses make HUGE amounts of money, they just don't claim them. Since much of these wages are "under the table," unreported income, they appear poor, but my daughter works as a server, and she regularly brings home $200 a night in tips after an 8 hour shift.
A meal for two at a moderately priced restaurant like the Outback or Olive Garden runs about $35, meaning a tip of $4 or more. The average server works 3-5 tables. This translates into $12-20 an hour in tips. For a job that requires no licenses or real skill. All you have to do is write down what the customer wants and carry it to the table.
Wrong.
Coming on the heels of the massive costs involved with Obamacare, it would cost $12,000 more per year to hire a new worker than it did when Obama took office. Employers are not bottomless pockets full of money. In order to afford these new, higher wages, employers will have to do one of three things: cut costs, raise prices, or a combination of the previous two. Most likely, this will be done as a combination of the previous two. The first effect will be fewer jobs.
The second effect will be pay compression. Let me give an example: In 2004, workers in Florida followed the Federal minimum wage law. The minimum wage in Florida was the same as the Federal wage, $5.15 an hour. In those days, an unskilled position like fry cook at KFC started at about $6.50 an hour. A semi skilled position, EMT, started at $8 an hour. A skilled position, Paramedic, started at $14 an hour.
In 2005, the voters of Florida put a law in place that increased the state minimum wage each year. (Here it is - pdf warning) Right now in Florida, an unskilled position like fry cook at KFC starts at about $8 an hour. A semi skilled position, like EMT currently starts about $9 an hour. A skilled position like Paramedic starts at about $13 an hour. So, the minimum wage in Florida increased by $2.64 (a 51% increase) over 7 years, and while the wages of unskilled labor climbed by 23%, the wages of semi-skilled laborers climbed by only 12.5%, and skilled labor actually fell by 7%. Factoring in inflation, and unskilled laborers were the only ones who saw an increase. This is illustrated in this Sentinel article. About three quarters of the way through the article,
Eric Jackson is CEO and president of Total Roofing Services, a 2-year-old Orlando company with about eight employees. Jackson starts his employees out at $10 an hour, saying he wants to give everyone "a chance to earn a living wage."
Jackson said he's not particularly concerned an increase in the federal minimum wage would drive up his labor costs. He said he'd tell new employees, "I'm already paying you a buck above that. Prove yourself, and you'll make more."So the skilled workers making more than minimum wage would not make more when the minimum wage is raised, and would be making the same as what a KFC fry cook makes, only now all of the businesses who had to give raises to their employees (KFC, grocery stores, gas stations) charge more. Inflation.
Inflation brings us to the second way that employers react to an increase in labor costs: they raise prices. They pay for the wage increases and the increased costs of providing health insurance by raising prices.
One of the biggest complainers about the minimum wage law is waiters and waitresses. They have a "tipped minimum wage" that is only $2.13 an hour. They claim that this places them below the poverty level. I claim bullshit. I know your game. Waiters and waitresses make HUGE amounts of money, they just don't claim them. Since much of these wages are "under the table," unreported income, they appear poor, but my daughter works as a server, and she regularly brings home $200 a night in tips after an 8 hour shift.
A meal for two at a moderately priced restaurant like the Outback or Olive Garden runs about $35, meaning a tip of $4 or more. The average server works 3-5 tables. This translates into $12-20 an hour in tips. For a job that requires no licenses or real skill. All you have to do is write down what the customer wants and carry it to the table.
Friday, May 3, 2013
Banks screwing up
For those who may not remember or are new to this blog, I was swept up in the mortgage mess that started our economic downturn. You can read about the summary here. I declared bankruptcy in 2009 as a result. My mortgage bank lied and provided false documents in court, and I was able to prove it. I sued them in Federal Court, and we settled out of court for $7,500. They paid me to go away. Then, in June of 2011, I won the foreclosure case after a year and a half of acting as my own attorney as I fought it in court.
Because no one knows who owns the mortgage, there are three different entities who have a potential claim:
1 The original bank. (Let's call them Mortgage Trust Company) They are the ones that I beat in court. They claimed to own my mortgage, sold it, filed the assignment with the courthouse, but still claim to be the mortgage holder.
2 Fannie Mae (FNMA) They also claim to be the owner, and they claim that Mortgage Trust Company is acting on their behalf. Like Mortgage Trust Company, they cannot produce a single document to show that they are the owners of the note or mortgage.
3 Nationstar mortgage. There is a recorded document at the courthouse that names Nationstar as the mortgage holder, and it is signed by Mortgage Trust Company's agent, MERS. The problem here is that Nationstar has no record of this.
Clear as mud? So last year, they started trying to collect money again. So, last month, I filed another lawsuit in Federal Court. This time, I was able to get an attorney. Let's see how much money we get this time.
I am not alone. In Florida, the banks are still lying and committing fraud to steal people's homes. This needs to stop, but I am not counting on our corrupt government to stop it. This family has been messing with it for two years:
Because no one knows who owns the mortgage, there are three different entities who have a potential claim:
1 The original bank. (Let's call them Mortgage Trust Company) They are the ones that I beat in court. They claimed to own my mortgage, sold it, filed the assignment with the courthouse, but still claim to be the mortgage holder.
2 Fannie Mae (FNMA) They also claim to be the owner, and they claim that Mortgage Trust Company is acting on their behalf. Like Mortgage Trust Company, they cannot produce a single document to show that they are the owners of the note or mortgage.
3 Nationstar mortgage. There is a recorded document at the courthouse that names Nationstar as the mortgage holder, and it is signed by Mortgage Trust Company's agent, MERS. The problem here is that Nationstar has no record of this.
Clear as mud? So last year, they started trying to collect money again. So, last month, I filed another lawsuit in Federal Court. This time, I was able to get an attorney. Let's see how much money we get this time.
I am not alone. In Florida, the banks are still lying and committing fraud to steal people's homes. This needs to stop, but I am not counting on our corrupt government to stop it. This family has been messing with it for two years:
Tuesday, March 13, 2012
Prosper
While I was employed, I invested in a deferred compensation plan called a 457 plan. Similar to a 401K (but for government workers) money is taken out of your pay, pretax, and invested. When the stock market crashed in 2008, I lost more than half of the money that I had invested. Much of it was never recovered. Over $17,000 gone in the blink of an eye. While the market was crashing, I tried desperately to get my money out, to no avail. I had to watch as the amount in there dropped every day. At the same time, the value of my house fell to less than half of what it was worth when I bought it.
Since, I have decided to diversify. I have invested in physical gold, and direct lending. In direct lending, you join a network of people who lend money directly to consumers. As far as I am concerned, this is no different from buying stock, because stock is nothing more than you loaning money to a corporation. Like stock, diversifying your money among several borrowers limits your exposure.
The company that I use for this is Prosper. The way it works is that you open an account, and you look over people who have applied for loans. Prosper has already pulled their credit and verified employment. You then contribute some funds to each loan, and as the person makes payments, you get repaid with interest. Interest paid to you is part of the bidding process. Take a look. It can't be worse than losing half your money in the market.
Since, I have decided to diversify. I have invested in physical gold, and direct lending. In direct lending, you join a network of people who lend money directly to consumers. As far as I am concerned, this is no different from buying stock, because stock is nothing more than you loaning money to a corporation. Like stock, diversifying your money among several borrowers limits your exposure.
The company that I use for this is Prosper. The way it works is that you open an account, and you look over people who have applied for loans. Prosper has already pulled their credit and verified employment. You then contribute some funds to each loan, and as the person makes payments, you get repaid with interest. Interest paid to you is part of the bidding process. Take a look. It can't be worse than losing half your money in the market.
Wednesday, March 7, 2012
Thanks, suckers
This woman won a million dollars in the lottery. She still collects $200 a month in food stamps. According to her:
Clayton says it's okay to remain on food stamps because she doesn't have a source of income and has bills to pay. She also believes she's entitled to it because she's "still struggling" and has two homes to run.
What I don't understand is how she has money for lottery tickets, but is on welfare. If you are so broke that you need to steal other people's money to survive, how can you have money for gambling? To top it off, you get a half million after taxes, and still need to steal other people's money.
So remember Ms. Clayton when you are doing your taxes this year. This is what your tax money pays for.
Clayton says it's okay to remain on food stamps because she doesn't have a source of income and has bills to pay. She also believes she's entitled to it because she's "still struggling" and has two homes to run.
What I don't understand is how she has money for lottery tickets, but is on welfare. If you are so broke that you need to steal other people's money to survive, how can you have money for gambling? To top it off, you get a half million after taxes, and still need to steal other people's money.
So remember Ms. Clayton when you are doing your taxes this year. This is what your tax money pays for.
Tuesday, March 6, 2012
Saturday, March 3, 2012
Irony
The government, through the Department of Agriculture, is distributing more food stamps than at any other time in history.
Meanwhile, the Park Service, another branch of the government, tells us not to feed the wild animals in the park, because they will become dependent and lose the ability to fend for themselves.
Meanwhile, the Park Service, another branch of the government, tells us not to feed the wild animals in the park, because they will become dependent and lose the ability to fend for themselves.
Thursday, February 23, 2012
Oil prices
This news report talks about rising gas prices and states that for every $50 you spend on gas:
$30.75 goes to the oil company
$7.00 to the refinery
$6.00 goes to the government
$4.00 to the distributor
$1.25 goes to the credit card company
$1.00 to the gas station
The entire article insinuates that the oil company is being greedy, but how fair is that?
$50 in gas, with prices around $4 a gallon, will get you about 12.5 gallons. There are 42 gallons to a barrel of oil, so your $50 in gas becomes slightly less than a third of a barrel of oil. Oil is currently about $110 a barrel. A third of that is about $33, which is about what you pay.
What changes the price of oil? In this case, blame the dollar. The government is not counting the price of fuel or food when they calculate inflation. The government is spending so much that the dollar is losing value, which is increasing the price of goods bought overseas, and the number one imported good is---- gasoline.
Blame profligate deficit spending for the pump prices.
Wednesday, February 22, 2012
Never doing that again
While I was doing my taxes, I was playing with Quicken and decided to see what living in my house cost me. I "bought" that house in 2007 for $236,000. Two and a half years later, it was worth only $96,000 and I declared bankruptcy to get that albatross from around my neck. When all was said and done, it came out in court that no one could tell me who owned the mortgage on that house, and so I won a "free" house in court.
Out of the five years since I bought it, I have not paid a dime in mortgage payments since September, 2009. Even so, that house has cost me $44,254 in mortgage payments over the last 5 years. Other expenses for the last five years:
Homeowner's Association: $1,591
Electric bills: $15,471
A new air conditioner/ heat pump: $4,219
Household maintenance, landscaping, and lawn care: $11,152
New appliances on moving in: $5,408
Insurance: $5160
Property taxes: $6341
That is a total of $93,596 for 58 months. That works out to $1,613 a month. Now keep in mind, I haven't made payments on that house for half of the time I have been there. If I had been, the monthly cost would increase to about $2,300 a month.
Now, to be truthful, I would have to pay utilities in an apartment, but I included them above because I have never had an apartment with $400 electric bills, which were not all that unusual in this house.
The five previous years in an apartment cost me an average of $1234 a month, including utilities and renter's insurance. My apartment was nice. It was only 200 square feet smaller than the house I bought, and it had a garage. Does anyone think that the tax advantage of owning a home saves you $14,000 a year in taxes? Not even mentioning that the house is worth $142,000 less than I borrowed on it. Had I not filed bankruptcy and gotten that house, I would still be upside down on it. I am not repeating that mistake. I will rent from now on, thank you very much.
Out of the five years since I bought it, I have not paid a dime in mortgage payments since September, 2009. Even so, that house has cost me $44,254 in mortgage payments over the last 5 years. Other expenses for the last five years:
Homeowner's Association: $1,591
Electric bills: $15,471
A new air conditioner/ heat pump: $4,219
Household maintenance, landscaping, and lawn care: $11,152
New appliances on moving in: $5,408
Insurance: $5160
Property taxes: $6341
That is a total of $93,596 for 58 months. That works out to $1,613 a month. Now keep in mind, I haven't made payments on that house for half of the time I have been there. If I had been, the monthly cost would increase to about $2,300 a month.
Now, to be truthful, I would have to pay utilities in an apartment, but I included them above because I have never had an apartment with $400 electric bills, which were not all that unusual in this house.
The five previous years in an apartment cost me an average of $1234 a month, including utilities and renter's insurance. My apartment was nice. It was only 200 square feet smaller than the house I bought, and it had a garage. Does anyone think that the tax advantage of owning a home saves you $14,000 a year in taxes? Not even mentioning that the house is worth $142,000 less than I borrowed on it. Had I not filed bankruptcy and gotten that house, I would still be upside down on it. I am not repeating that mistake. I will rent from now on, thank you very much.
Wednesday, December 14, 2011
Why use banks?
I was reading this article about a young man who had a savings account with less than $5 in it who racked up over $200 in banking fees. With a balance of $4.95, he was charged a $9.95 account maintenance fee, and this caused the account to overdraft, thus triggering a $28 per day overdraft fee. By the time he was notified by mail of the problem a week later, he had racked up $229 in fees.
This got me to looking at my own account. Banks used to be an excellent way to protect your money. You placed your money there for safekeeping, and the bank paid you a small amount of interest for the privilege of being able to lend your money to others. Checking accounts, not being available for lending, typically charged a small fee for the convenience of keeping your spending money safe.
Not any longer. At prevailing interest rates, you are only earning about $1.50 a month on a $10,000 savings account. So at the end of a year, you have exposed your ten grand to the risk of being stolen by the government via inflation, and by the very company that you have entrusted your hard earned money with through the use of fees and charges, all for the token sum of $18. An account of $10,000 earns $18 in interest in a year, but loses hundreds of dollars in value from inflation.
What I have done instead is to leave operating funds in my checking account, which being direct deposited at a credit union, lets me avoid banking fees. I keep one month's expenses in a savings account at the same credit union, which gives me a measure of insurance against overdrafts and small to medium unexpected expenses on short notice, and I invest the rest.
Now remember that gold typically holds it value against inflation. That is, an amount of gold will hold its value when measured against inflation, with the exception of small, short term variation and broker fees. It is those fees and variations that must be accounted for. For example, I bought gold when it was $1370 per ounce in September of 2010. There is a small premium for my preferred form of gold, and along with broker's fees, I paid $5400 for 4 ounces of gold.At today's price, I could sell that 4 ounces for roughly $8900- a profit of $3400, which is an annual return of nearly 200%.
Now today is a down fluctuation time- time to buy more. Gold has fallen almost $150 per ounce in the last 30 days. That is not a bad thing. As I write this, gold is down to $1580 an ounce, as the dollar increases in strength due to the impending collapse of the European Union. This means that we can buy gold at rock bottom prices. I am thinking of grabbing a few ounces this week or next, and catching it near the bottom.
Once the United States crashes in similar fashion (which is inevitable, considering the way we are emulating the out of control spending of Europe) people left with dollar denominated assets (stocks, bonds, savings accounts) will find their savings evaporated by inflation, while those holding assets like metals, oil, and durables will find that they have held their value.
The big downside here is physical security. I have a large, heavy safe, a cell phone connected burglar alarm, motion activated security lights, and numerous other security measures. Add to that the fact that there is an armed guard residing on the premises (me), and this is a pretty secure facility.
Use banks for short term liquidity, hold hard assets for long term savings. So here is my advice:
1 Get rid of all of your debt.
2 Establish a short term emergency fund of 1-2 month's expenses (not income).
3 Have at least one month's worth of food and needed supplies in the house.
4.Go easy on the luxuries like dining out, video games, expensive electronics, etc.
5.Save money in hard assets. (Things that hold their value that you can readily sell or trade for things you need)
6.Pay for a place to live in full. If you are making payments, you don't own the house, the bank does.
This got me to looking at my own account. Banks used to be an excellent way to protect your money. You placed your money there for safekeeping, and the bank paid you a small amount of interest for the privilege of being able to lend your money to others. Checking accounts, not being available for lending, typically charged a small fee for the convenience of keeping your spending money safe.
Not any longer. At prevailing interest rates, you are only earning about $1.50 a month on a $10,000 savings account. So at the end of a year, you have exposed your ten grand to the risk of being stolen by the government via inflation, and by the very company that you have entrusted your hard earned money with through the use of fees and charges, all for the token sum of $18. An account of $10,000 earns $18 in interest in a year, but loses hundreds of dollars in value from inflation.
What I have done instead is to leave operating funds in my checking account, which being direct deposited at a credit union, lets me avoid banking fees. I keep one month's expenses in a savings account at the same credit union, which gives me a measure of insurance against overdrafts and small to medium unexpected expenses on short notice, and I invest the rest.
Now remember that gold typically holds it value against inflation. That is, an amount of gold will hold its value when measured against inflation, with the exception of small, short term variation and broker fees. It is those fees and variations that must be accounted for. For example, I bought gold when it was $1370 per ounce in September of 2010. There is a small premium for my preferred form of gold, and along with broker's fees, I paid $5400 for 4 ounces of gold.At today's price, I could sell that 4 ounces for roughly $8900- a profit of $3400, which is an annual return of nearly 200%.
Now today is a down fluctuation time- time to buy more. Gold has fallen almost $150 per ounce in the last 30 days. That is not a bad thing. As I write this, gold is down to $1580 an ounce, as the dollar increases in strength due to the impending collapse of the European Union. This means that we can buy gold at rock bottom prices. I am thinking of grabbing a few ounces this week or next, and catching it near the bottom.
Once the United States crashes in similar fashion (which is inevitable, considering the way we are emulating the out of control spending of Europe) people left with dollar denominated assets (stocks, bonds, savings accounts) will find their savings evaporated by inflation, while those holding assets like metals, oil, and durables will find that they have held their value.
The big downside here is physical security. I have a large, heavy safe, a cell phone connected burglar alarm, motion activated security lights, and numerous other security measures. Add to that the fact that there is an armed guard residing on the premises (me), and this is a pretty secure facility.
Use banks for short term liquidity, hold hard assets for long term savings. So here is my advice:
1 Get rid of all of your debt.
2 Establish a short term emergency fund of 1-2 month's expenses (not income).
3 Have at least one month's worth of food and needed supplies in the house.
4.Go easy on the luxuries like dining out, video games, expensive electronics, etc.
5.Save money in hard assets. (Things that hold their value that you can readily sell or trade for things you need)
6.Pay for a place to live in full. If you are making payments, you don't own the house, the bank does.
Thursday, December 8, 2011
Spend it like it isn't yours
As of November 30th, the National Debt stands at a whopping $15.1 trillion. It took the Obama administration less than three years to borrow $4.5 trillion, what it took the Bush administration 7 1/2 years to borrow. In nearly every measurable way, the Obama administration has been even worse for the country that Bush was. Why isn't the press reporting on this?
Friday, November 11, 2011
Too many degrees
Have you ever heard that you need to go to college to get a good job? I know that I did. Heck, my parents practically tied me up and took me to the military recruiter because I didn't go to college. The reason that our parents thought that college was so important is because of how well college graduates did in college.
In 1950, only one third of the adults in the United States had a high school diploma. Many of the adults were blue collar factory workers and made a good living. Only about 1 in 20 adults had graduated from college.
That was before education became big business. School became easier, and kids were passed on to the next grade, not because they had mastered the skills needed, but because teachers were afraid of damaging the kids' self esteem. In 2010, 80 percent of adults were high school graduates, and 20 percent had a 4 year degree or more.
So the latest generation is flush with college degrees that mean little, because many schools are offering degrees in things that are not needed job skills. Because we have all of these degrees, we are demanding high wages, and this has driven the blue collar jobs out of the country. Unemployment is rampant. At the same time, we are paying people the equivalent of $10 an hour to sit at home for up to two years, so there is little to no incentive for work.
Instead of making things like cars and appliances, we sit around and make war and college graduates with degrees in French Poetry and Women's Studies. We spend money like there is no limit, and for that we are doomed. Soon, we will reach the nation's credit limit, and our time as the world's superpower will be over. I find myself wondering how hard the times that are coming will be.
In 1950, only one third of the adults in the United States had a high school diploma. Many of the adults were blue collar factory workers and made a good living. Only about 1 in 20 adults had graduated from college.
That was before education became big business. School became easier, and kids were passed on to the next grade, not because they had mastered the skills needed, but because teachers were afraid of damaging the kids' self esteem. In 2010, 80 percent of adults were high school graduates, and 20 percent had a 4 year degree or more.
So the latest generation is flush with college degrees that mean little, because many schools are offering degrees in things that are not needed job skills. Because we have all of these degrees, we are demanding high wages, and this has driven the blue collar jobs out of the country. Unemployment is rampant. At the same time, we are paying people the equivalent of $10 an hour to sit at home for up to two years, so there is little to no incentive for work.
Instead of making things like cars and appliances, we sit around and make war and college graduates with degrees in French Poetry and Women's Studies. We spend money like there is no limit, and for that we are doomed. Soon, we will reach the nation's credit limit, and our time as the world's superpower will be over. I find myself wondering how hard the times that are coming will be.
Sunday, October 30, 2011
Two year anniversary
I also just realized that today marks the two year anniversary of my bankruptcy filing.
After finding myself owing $240,000 on a home that was only worth about $120,000, and trying to get some help from the banks that were flush with billions of bailout money, I decided that I could either be stuck with 27 more years of mortgage payments totaling over half a million so that I could own a home worth less than $100,000, or I could do the financially wise thing and walk away, I decided to declare bankruptcy.
It was a wise decision. It turns out the bank had sold my loan to 3 other banks at the same time, so no one knows who really owns the loan. They cannot find the loan paperwork, and it turns out that there are no bank records showing who owns the loan, so I still own the home even though I haven't made the last 25 payments. The bank lied in court, and provided forged papers to try and prove that I owed them money. They got caught, I sued them, and won a not insubstantial pile of money.
I have no debt, a 3 year old, paid for in cash pickup truck, and $40,000 in savings. I have no debt. My credit score of 655 isn't too bad, considering a two year old bankruptcy.
After finding myself owing $240,000 on a home that was only worth about $120,000, and trying to get some help from the banks that were flush with billions of bailout money, I decided that I could either be stuck with 27 more years of mortgage payments totaling over half a million so that I could own a home worth less than $100,000, or I could do the financially wise thing and walk away, I decided to declare bankruptcy.
It was a wise decision. It turns out the bank had sold my loan to 3 other banks at the same time, so no one knows who really owns the loan. They cannot find the loan paperwork, and it turns out that there are no bank records showing who owns the loan, so I still own the home even though I haven't made the last 25 payments. The bank lied in court, and provided forged papers to try and prove that I owed them money. They got caught, I sued them, and won a not insubstantial pile of money.
I have no debt, a 3 year old, paid for in cash pickup truck, and $40,000 in savings. I have no debt. My credit score of 655 isn't too bad, considering a two year old bankruptcy.
Wednesday, October 19, 2011
A lot of cash
I haven't mentioned this on over a year, but I want to take a look at the US debt. As of today, we are $14.9 trillion in debt, according to the US treasury.
When Obama took office, that amount was $11.9 trillion. An increase of $3 trillion (or 140%) in just 33 months.
When GW Bush took office, we had a national debt of $5.7 trillion. The debt increased $4.7 trillion in 8 years. This means that the Obama administration is just $400 billion shy of borrowing in 3 years what it took his predecessor 8 years to borrow.
Not like I am really happy with Bush's spending, either. Or Clinton's.
When Obama took office, that amount was $11.9 trillion. An increase of $3 trillion (or 140%) in just 33 months.
When GW Bush took office, we had a national debt of $5.7 trillion. The debt increased $4.7 trillion in 8 years. This means that the Obama administration is just $400 billion shy of borrowing in 3 years what it took his predecessor 8 years to borrow.
Not like I am really happy with Bush's spending, either. Or Clinton's.
Tuesday, August 23, 2011
Gold experts and inflation
Gold tops $1900 an announce, and the experts are all claiming that it is overbought, and that the bubble will soon burst.
That is the same thing that the experts said in June, when gold was at $1500 an ounce.
- and October of 2010, when gold was $1380 an ounce.
- and March, 2010, when gold was at $1200 an ounce.
- and December of 2009, when gold was passing $1100 an ounce.
- and in December of 2005, when gold was $520 an ounce.
The secret here is that the world's governments and private citizens alike are coming to the realization that the US Government cannot stop spending money, and are moving away from using the dollar as the reserve currency for the world. This is injecting large amounts of dollars into the world's markets, and making the dollar worth less. This is causing a massive devaluation of the dollar. This isn't the first time that a country has spent itself into financial ruin. Zimbabwe, the Soviets, and the Germans have all done it during the last century.
Our politicians don't care, because both parties need your money to buy your vote. They are spending us into ruin. Don't be caught holding dollars when the end comes, or you will need them to heat your home, like this woman is doing in 1923 Germany, because bank notes are cheaper than coal.
Price of 1 ounce of gold (in German Marks):
January,1919………. 170
September,1919……. 499
January, 1920………. 1,340
September, 1920……. 1,201
January, 1921………. 1,349
September, 1921…….2,175
January, 1922……….3,976
September, 1922…….30,381
January, 1923……….372,477
September, 1923…….269,439,000 (that's right- from 4 thousand to 270 million in a year and a half)
Oct. 2, 1923………….6,631,749,000
Oct. 9, 1923………….24,868,950,000
Oct. 16, 1923…………84,969,072,000
Oct. 23, 1923…………1,160,552,882,000 (over 1 trillion)
Oct. 30, 1923…………1,347,070,000,000
Nov. 5, 1923…………..8,700,000,000,000
Nov. 30, 1923…………87,000,000,000,000 (almost 80 trillion increase in one month)
Do you see how the problem escalates? This is where we are headed. Scary stuff.
That is the same thing that the experts said in June, when gold was at $1500 an ounce.
- and October of 2010, when gold was $1380 an ounce.
- and March, 2010, when gold was at $1200 an ounce.
- and December of 2009, when gold was passing $1100 an ounce.
- and in December of 2005, when gold was $520 an ounce.
The secret here is that the world's governments and private citizens alike are coming to the realization that the US Government cannot stop spending money, and are moving away from using the dollar as the reserve currency for the world. This is injecting large amounts of dollars into the world's markets, and making the dollar worth less. This is causing a massive devaluation of the dollar. This isn't the first time that a country has spent itself into financial ruin. Zimbabwe, the Soviets, and the Germans have all done it during the last century.
Our politicians don't care, because both parties need your money to buy your vote. They are spending us into ruin. Don't be caught holding dollars when the end comes, or you will need them to heat your home, like this woman is doing in 1923 Germany, because bank notes are cheaper than coal.
Price of 1 ounce of gold (in German Marks):
January,1919………. 170
September,1919……. 499
January, 1920………. 1,340
September, 1920……. 1,201
January, 1921………. 1,349
September, 1921…….2,175
January, 1922……….3,976
September, 1922…….30,381
January, 1923……….372,477
September, 1923…….269,439,000 (that's right- from 4 thousand to 270 million in a year and a half)
Oct. 2, 1923………….6,631,749,000
Oct. 9, 1923………….24,868,950,000
Oct. 16, 1923…………84,969,072,000
Oct. 23, 1923…………1,160,552,882,000 (over 1 trillion)
Oct. 30, 1923…………1,347,070,000,000
Nov. 5, 1923…………..8,700,000,000,000
Nov. 30, 1923…………87,000,000,000,000 (almost 80 trillion increase in one month)
Do you see how the problem escalates? This is where we are headed. Scary stuff.
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