You are probably wondering what the heck this number means at this point, but I can promise you by the time that you finish reading the second paragraph you will probably have a better understanding of where this is heading. As usual, I was reading another article about home ownership and financing. After reading some shocking information I decided to do some research of my own, only to be more shocked.

When I purchased my first home, I was right out of college and had student loans of more then $30,000 and about $3,000 total in savings, which if you do the math my Net/Debt Ratio was horrible. On another note, when I walked into a loan office they made me feel like “a million bucks,” so they said. One month later and $3,000 less for closing cost, with no money down, I had a “new” pre-foreclosed condominium. Just like that I went from rags to riches and now owed twice as much debt.

Back then, I maintained an average of 619 credit score over the three major credit bureaus. At the tender age of 25, I figured that the credit score was all I needed in life to get me where I was going. In today’s market that would probably get you about 15% down payment at minimum, which I don’t know how I would have ever accomplished this during that period of my life. Seems like the economy has really taken a turn for the worst and I see something like this being a problem with a lot of middle income families.

In a recently written article in Money magazine, it was said that Fannie Mae and Freddie Mac, will soon be requiring a 740 score for buyers to avoid the healthy interest rate or down payments. This rate increase would affect over 33million Americans whose scores fall below 680. The National Association of Realtors has stated that most Americans that look to get a home with zero percent down payments in the near future would have to maintain at least 621 or better score to even be considered.

With the credit crunch and banks reluctant to lend out money to consumers and small business, we have to figure out ways to overcome the shortfalls of how the economy has affected us all. Some suggest that we, as Americans, either have to learn how to save more money to afford a larger down payment to prevent possible foreclosure, or wait for the banks to loosen leading. The chances of the second part happening may be something none of us want to hold our breaths on, so it’s probably a good idea for all of us to start working on the saving part.

I don’t know about a lot of other people but I am pretty pissed! I am a Middle Tennessean, Nashville to be exact, and living with the aftermath of Hurricane Ike. I have never, again NEVER, been this directly affected by what has transcended in such a short time period. It pretty much seems like Armageddon. This is it, a few days after the hurricane I left the city for a vacation.

    The Dow Jones Industrial Average dropped 500 points a couple of days ago. This was the steepest decline that Americans have witnessed since the aftermath of Sept. 11, 2001. Today the Dow took yet another massive hit as it dropped an additional 450 points. Thus causing close to 700 billion dollars in investments to simply disappear into thin air . This was only one day after The Federal Reserve System also know as the FED intervened and aided one of the world’s largest insurers, AIG with an emergency loan to keep them afloat.

      Today marked the fourth consecutive day of obvious instability within the US Financial system. This downward spiral began with Lehman Brothers , a 160 + year old investment firm going bankrupt Sunday. A firm that has survived two World Wars, the S&L crisis of the 80’s, recessions, and a depression ; a so - called permanent “footprint” in the investment and financial world …..  gone overnight.  Merrill Lynch, another giant in the financial industry, has been bought out by Bank of America.

        It is evident that there are some major problems currently in our finacial sector. The stock market is very volatile. Gold has went up sufficiently which usually only happens during times of crisis. Bonds, which have been a long time safe investment have risen too. Sung Won Sohn, an economics professor at California State University, was quoted saying, “The economy is not short of money. It is short of confidence.” I am starting to believe that we are short on both.

       Hopefully the FED has made the correct decision with its bailout of AIG. Many economists feel that they have not considered the potential adverse side effects that can arise as a result of the FED helping out. The American taxpayers are essentially the ones bailing out AIG . Americans are too occupied with job security at the present time. The last thing we need is to find out that we will also be footing the bill for companies that were managed insufficiently.

      For those of us that are either excited or passed the shock of Governor Palin as our Vice President, we would like to know your thoughts about her as a professional. Also, what do you feel about the media bringing up her daughter’s situation, and what were your opinions of the speech?

What are your thoughts???

For those of you readers that are keeping up with a lot of the presidential campaign and each candidate’s viewpoints; I would like to know what you’ll think about Barack Obama’s view point of his tax credit for student, which will establish a new American Opportunity Tax Credit that is worth $4,000 a year in exchange for 100 hours of public service a year. What do you think about volunteering your time and effort to receive funding and how will this promote or deter students to participate?

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The “Rat Race” aka Check-to-Check

When I think about the statement “check to check” there is typically negative connation associated with this, and it should be. Horribly the facts are vaguely to say, most of us are familiar with the term if not already comfortable with this style of living. At one point of my life when I thought about this statement “living check to check,” it would scare me to the point that I would stayed up late thinking about it. So subconscious I would work twice as many hours at work and just as many at my part time job. So on average, I would work 50 hours a week, 60 or more hours weekly, ” if I was lucky.”

      My point to making a portion of my blog is dedicated to talking about addressing one question and one question only: When does the madness stop? I am sure there are many Americans that struggle with making ends meet, or the fear of not having money. I know I’ve been that person for 25 plus years of my life. I think some of that was emotionally tied to how I was raised and how I saw my mother do this scrupulous work routine during my childhood. I soon figured working harder lead to “great wealth” or having that financial edge on everyone else. However in actuality, it just meant that I was able to pay on my bills on time. Sadly, I was never actually able to save more than $1,000 in my bank account at any given time, nor pay my bills off.

       Oddly to say, while in college I worked part-time as a waiter at a local country club. The irony about that experience is that the members never seemed to be the type of people to have two jobs. So, when I eventually gained the courage and familiarity with some of the members I begin asking them little questions like what were their occupations. I was someone astounded to find out that most of them were first or second generation inheritance, many started with nothing. What was obvious was the fact that most found a product or service that was in demand and learned how to craft that skill.

      My main purpose of bringing this topic up is to encourage others, myself included, that in order to get out of what we know as the “rat race”, we have to first change some of the thoughts and habits we associate with money and working. I would be a hypocrite to say that if a company offered a reasonable amount of money for me to work I wouldn’t think twice about the job. But after working most of my life and seeing where it’s gotten me, or the lack there of, I’ve had to accept that changes must be made or continue to stay in the race.

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Good Evening Readers!     

      For those of you that need a little help with a budget, here is a helpful tool for you to use. It’s pretty old fashion but this will help you develop some discipline on how to keep some form of accountability were your money is going, or the lack there of. When I first started using the excel spreadsheet I found it to be tedious and time consuming. However, it was shocking when I found out just how much money was going out of my pocket for things I didn’t really need.

      I would advise you to copy this spreadsheet to your hard drive and modify the categories accordingly to how you spend your money. If you have any questions on how to use this excel spreadsheet don’t hesitate to email or contact me. 

      excel-budget4

 Debt Income Ratio

     The Debt ratio is designed to assist you with calculating your percentage of debt over your total assets. In other words, the formula would look as follows:

Debt=Total Debt/Total Assets

       So when you go to apply for a home loan or a car loan, these numbers are important to know. It’s also good to know just for the sack of knowing how much of your money that you are actually keeping after to pay off all your bills. 

Personal Budget

      I have also added an additional page to help assist those of us that aren’t so good at keeping track of our spending habits. I use this spreadsheet myself because at first it seemed somewhat tedious but after some time I was amazed to see some of the spending habits that I had. I would suggest trying this for a month just to see how it works out for you, if not post a comment on what worked best for you.

40/60 Rule

Some of the readers that scammed this page and see the title of this subject without even reading this portion already know where I am headed with this topic. Hence, I figured this would be something great to write about. After recently reading an article by Joel Lovell in Gentlemen’s Quarterly I knew this would be something great to write about and it’s pretty much simple mathematics, but let me warn you this is not for the weak and heart, because although this may seem easy you will have to stomach the emotional withdraw of compulsive spending etc…

          Here goes, many financial advisors and gurus say that your monthly EXPENSES should not exceed 60% of your take home money after taxes. I capitalize expense because that includes everything from buying chewing gum to paying your association fees on your townhouse. This is where you learn some steps of discipline. Let’s say that you have 40% remaining after your bills and the question then is how am I able to save with only 40% left after all my bills? It’s been actually presented somewhat easy however our decisions to follow these steps are another story. Think about this, if you put 12% into your 401K that’s money that you never see land into your bank account. Then you take another eight percent and set up an high yield savings account which you can also have coming out of your account every pay check, so that’s 20% that you never see each month building up your nest egg! Not to mention the amount that your company matches on the 401K. Then you save 10% for “what-if” money or emergencies i.e.( car repair, vacation, new car speakers), or also know as irregular expenses. Lastly, you have a whole 10% left to do whatever you wish to spend it on. I know at first this sounds preposterous, but this is a small step to a big picture.

Please share your thoughts that may work for you that you could share with the readers. Listed below is an example of what I just discuss, but a big website that has plenty of great ideas and offers the best yields across the saving accounts and make the banks compete is www.bankrate.com. Check it out!

Example

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Good evening everyone,

       I decided to write on this subject of the blog for one reason and one reason only. I get so upset when I meet people, whether it is co-workers or random strangers, and they have the most brilliant business ideas yet they are stuck with just that, an idea.

        When asked, “What do you want to do in life?” just think for a second and ask yourself that question. Without telling anyone, what is your response? I tend to get the same response all the time, “I want to start my own business because I don’t want to work for anyone.” For years and years, I found myself moving from job to job looking for happiness and trying to figure out what I wanted to do in life. I could not figure out which direction to go, and more importantly, which direction was helping me move up in corporate America. Finally, I started asking myself a different question, “What do I want to do about my future?” and “What am I going to do about it?” So that’s the question I want you to answer today.

       I have to be honest, today I am still working for another “Fortune 500,” (whatever that means) trying to figure out how to get out of the continuous rat race. Like many Americans, I still haven’t figured out one single road to reach to my lifelong goals. However, I have figured out a thing or two along the way. I discovered that one thing that would help us all get to that point where we think we should be……NETWORKING.

        Some may be wondering how I came to that conclusion.  Have you ever met somebody that obviously didn’t get their position based on the merits of what they know how to do?  Well, hopefully those of you that have continued reading our blog up until this point understand the importance of where I am going with this. It’s not about WHAT you know, but WHO you know!

        As this site continues to grow, hopefully people are able to network and build rapport with others in their industry. Not only for networking purposes, but also to share business ideas and connect in ways that we aren’t able to do if there was no internet. So please, let’s get connected!

      Last week during the Democratic National Convention, the tone was set for Democrats to embrace the diversity that the party has welcomed.  During a very heated primary battle that had a Caucasian, African American, Hispanic, Woman, and a Roman Catholic on the ballot proved to be the year of the new generation of candidates for their party.  In the end it was Barack Obama and Hillary Clinton competing for the nomination and it ended officially on Monday as Hillary Clinton motioned the delegates to suspend the rules and nominate Obama by acclamation.  That night, Michelle Obama delivered an awesome speech that that by accounts of Fox News, CNN and MSNBC was awesome and really showed why her husband deserves to be the next commander in chief.  Tuesday brought out the momentous Hillary Clinton. She was greeted by many who waited to hear how she was going to help the party win in this year’s election.  With everyone wandering if she was going to fully support Barack or just use the time to spring board her candidacy on 2012.  Not only did Hillary throw all support behind Obama, she excited the crowd by dismissing John Mc Cain and the right wing agenda that he supports.

      Wednesday was a crucial day for the convention to keep the momentum going.  Not only did you have Obama’s vice presidential pick, but you had the god father of democratic politics who just so happened to be the husband of a lady who ran against Obama in the primary.  With political operatives with their ears glued to the television, Bill Clinton delivered a prolific account of how supporters will win with their support behind their new titular head of the Democratic Party in Barack Obama.  He exited the stage after the speech after receiving a five-minute standing ovation from delegates all across the country.  Afterward Joe Biden as the keynote speaker gave a speech that attacked John Mc Cain and displayed his credentials to being second in charge.  The night ended as the anticipation grew and the crowd moved to a huger location so that more supporters could see in person as Barack accepts the nomination. 

      By 6:00 p.m. the same stadium that the football team Denver Bronco plays their football games in was packed more than 87,000 people strong as each hour inched closer to Barack taking the stage.  By 9:35 p.m. Barack Obama took the stage and delivered a strong speech that literally touched every issue that critics considered him weak in.  By the end of the night, you saw tears of happiness, disbelief that this day has finally come and joy that the party just had closed a wonderful week with little or no known setbacks.

      When you hear Republican, Democrat or even third party affiliations like the Green Party or Libertarians, you think of a very different world.  Many think it’s corrupt, some thinks it fun and a few don’t even know how to spell politics or vote for that meaning.  Acronyms like GOTV, ED, VAN, and TV, may seem like “go T.V., Education, some type of vehicle and something you watch”.  But no, they stand for “Get out the Vote, Election Day, Voter Action Network, and targeted voter” are really what these acronyms mean.  Many people come and volunteer for a campaign on their own.  They may see a candidate at a local event and agree to vote for the candidate and do some phone calling to friends for the candidate to show their full support.  Most volunteers come out during the presidential elections.  They see the opportunity to affect change and hope on a national level and begin to call around looking for the candidate’s headquarters.  

      Once they are in the door, they enjoy the atmosphere; Election Day is here and then the race is over. The volunteers and supporters long to have that excitement continue with door to door knocking, phone banking, and holding signs up around busy intersections to notify voters that there is an election going on.  With that, they start to get involved in smaller campaigns, like school board or council races.  As the election season gets closer to November, you’ll start to see more candidates yard signs go up in your community.  If it is your neighbor, a simple question like “where did you get the sign from” could spark a conversation that gets you the information for the headquarters and gets you in the door to volunteer. 

       Volunteers are so crucial to campaigns because they generally can’t afford to pay the sizeable staff they need to execute their objective.  So college students have become a big target.  One who is willing to work for little or nothing to get the experience, come in early, leave late, and has an expendable amount of energy.  A lot of people think you have to major in something like political science or some major remotely similar to politics, but that is not the case.  My major just so happened to be business administration and a friend of mines was nursing.  That just shows you that all walks of life participate in this process and that your only qualification is the passion to help the candidate get elected to office.

       If you find yourself wanting to do more in this upcoming election and have the urge to volunteer and don’t know where to start, then call the national parties of each and see what you can do to find campaigns locally!