Hey guys, sorry it’s been a while since I updated. It seems that the sagging global economy has even affected the best of us. If we’re not scrambling to make ends meet these days, we are pissed at some random person for some random act, that we would never have given a second thought in a better economy. The downward spiral is getting out of control, and it has even affected our physical health. We need to take back control people. And the first step is identifying the problems. So, what every day activities may be threatening your financial health? Here are seven:

1. Using a debit card without writing down the transactions in your account register.

Debit cards are expected to account for 60 percent of transactions this year, but debit-card users tend to lose track of their money: Swiping plastic triggers 44 percent of overdraft fees, while paper checks account for just 27 percent.

Why write down debit spending? Because swiping a card doesn’t feel the same as laying out cash. The discipline of recording the transaction may reduce mindless spending and makes money easier to track. Simplify your money trail by using online bill pay for all your regular monthly bills, rather than having money withdrawn from your account by outside companies. Then take 30 seconds a day to log on to your account, add the pending transactions in bill pay to the outstanding checks and debits listed in your register that haven’t cleared yet. Subtract from the current balance. If the result is nearing zero, add money to the account. Voila! No overdrafts, no fees.

Sounds simple, but it’s more difficult than you think. Start small. Baby steps. Once you see what a dramatic difference it makes, you’ll want to apply this sort of order to every aspect of your life.

2. Tossing out the “junk mail” from your credit card company.

The Credit Card Holders Bill of Rights Act goes into full effect in February. Ahead of that deadline, companies are changing the terms of customer agreements. For example, the new law prohibits raising the interest rate on existing balances unless a customer pays more than 60 days late. To skirt that provision, firms are notifying customers that their cards are now “variable rate.” (Translation: We can jack up your rate whenever we please.)

So watch those benign notices, and be ready to call and demand a fixed-rate card or take your business elsewhere. Amid these tactics, a new bill calls for moving up the deadline on the credit card law to December 1st.

I just got one from Bank of America. The basic “rock and a hard place” ultimatum they gave me was, cancel my card and stay with the 9.9% APR until pay off, or keep my $10,000.00 limit and get raped (excuse my French) for 29.99% every month. My solution? After I gave them the finger, I transferred the amount to another card. Always keep a few open folks.

3. Ignoring new bank charges.

You may have noticed banks are a bit desperate these days to make a buck. One of the more recent innovations is dinging customers who make electronic transfers to an external account.

For example, last year, Wachovia started charging customers $3 per transfer to an outside bank. Let’s say you automatically stash $100 a week into a savings account at an online bank offering 1.8 percent interest (the current top rate). Smart move. Except Wachovia will now ding you for 3 percent of that weekly deposit. Annual cost? $156.

Meanwhile, Wachovia doesn’t offer any savings accounts that compete with a 1.8 percent rate. The solution? Find a local bank or credit union with no transfer fees, so you’re free to access higher returns.

4. Investing time in the wrong things.

Maybe you’re someone who will drive 20 minutes to a store on your lunch hour to get $5 off a $20 sweater. Or you’ll spend 45 minutes on the phone protesting a $3 error on the cable bill. It’s just not worth it sometimes. But, it’s still money you argue.

Well, let me tell you what is worth your time. Joining the 401(k) plan at your company. Don’t just leave your contribution languishing in a money-market account.

Make a weekly to-do list of your financial decisions (savings and spending) and then prioritize them in terms of bang-for-the-buck over time. When you do the math, you’ll see why paying off credit cards in full and contributing to a retirement plan that offers a match should be at the top of the list.

5. Spending with no goals to guide you.

One definition of insanity, attributed to Albert Einstein, is doing the same thing over and over again and expecting different results. Yet that’s how some people approach their finances. They earn and spend and earn and spend, and wonder why they aren’t making any progress.

Break the mindless cycle by figuring out what you value most, whether it’s world travel, returning to school to change careers, home ownership, a peaceful retirement or a debt-free college education for the kids. Then set specific goals, with real time frames, and track your advancement on a monthly basis. Make this a daily discipline by putting a list of those goals in your face: the fridge, your desk at work, your wallet.

Remember what I said about those monthly meetings with your significant other? This is what I was talking about. Or, just set up a day each month and sit with yourself to go over these things. It will pay off. I promise.

6. Failing to track spending.

You can’t succeed at No. 5 if you don’t know precisely where your money is going. When I first started working, I carried a pencil and paper around and wrote everything down. Today, there are numerous desktop software applications and Web sites that will aggregate your finances and track your spending and savings. If you own a smart phone try Mint.com.

You can pay upfront for software. Choose an online program that’s free, but supported by sponsored ads and offers you’ll see when you log in (and the service may sell your data). Or you can pay a monthly fee for a site with no outside ads or offers.

7. Failing to exercise.

How can this hurt your finances? Daily physical activity lowers the risk of a multitude of ailments, from heart disease to diabetes to certain kinds of cancer, which are obviously expensive to treat, even for people who have health insurance.

A study has found medical bills are behind 60 percent of U.S. bankruptcies, and more than 75 percent of bankrupt families had health insurance at the onset of the illness.

Meanwhile, a regular work-out might even get you a raise. Studies have found exercise can improve your performance at work by boosting cognitive skills and productivity, and reducing stress and absenteeism. And, the most important factor, you’ll just feel better!

Thanks for staying with me guys. See you in seven (promise!).

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Even with the current rainfall we here in the Bay Area have experienced as of late, there is still a shortage of water for the coming summer months. While we are close to facing mandatory cutbacks, the rest of you could use the money savings gained from our tips to conserve water.

The following tips can have households achieving a 10% reduction in water use by saving about ten gallons a day. Here is what you can do to help meet the challenge of cutting back.

Take shorter showers. Each minute you cut saves 2.5 gallons of water!

Turn off the faucet when you are brushing your teeth of washing the dishes. As I stated above, each minute you cut saves 2.5 gallons.

Don’t pre-rinse dishes. Scrape food waste directly into the compost bin. While this probably won’t add up to a minute, you can still save the proportionate amount of time it takes you to do all the dishes that month.

Use the Dishwater. Surprisingly dishwashers are often more efficient than hand washing. A modern dishwasher’s cycle uses as little as five gallons per load. Compare that to running the faucet at two plus gallons per minute.

Wait for a full load. Full loads are the most efficient way to wash clothes. A traditional clothes washing machine can run at forty plus gallons per cycle.

Use a broom. Hosing down sidewalks, driveways, and pavement is a wasteful practice. Running a garden hose can waste up to ten gallons per minute.

Install aerators on faucets. Installing aerators on kitchen and bathroom sinks can reduce indoor water use by about four percent. Inquire about FREE aerators from your local water department (the SFPUC for the local folks).

Check for leaks. Do you hear the toilet running or your faucet dripping? You could be wasting thousands of gallons per month. To check for leaks, turn off all water taps inside and outside your home. Locate your water meter, and if the dial is moving you may have a plumbing leak.

Adjust your sprinklers. This is so that water remains on the landscape, not the pavement. Reduce evaporation by watering during cooler temperatures at night or in the early morning.

Hope these tips help guys. See you in seven (-ish).

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Hello readers! I just finished a book called The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach. While I do not agree with every idea in his book, I do want to share with you his main point, the juice of his book, or essence if you will. The biggest secret to building financial security and wealth is automating your savings. And once you know how, you too can get rich automatically.

Step One: Put a minimum of 10% of your income into a 401k or similar retirement fund every month straight from your account. Better yet, put in the maximum amount your employer will match. Increase your contribution to 20% of your income when you can. Invest this money in portfolios that are appropriate to your age and risk tolerance. The key is to set up an automatic transfer. After a while, you won’t notice that the 10% is gone and you will make due without it!

Step Two: If you have any credit card debt or other consumer debt, put 20% of your income toward paying the balances down to zero. Do not use the cards until that is done. Give yourself a cash allowance each month for necessary expenses. When the cash is gone, stop spending. If you do not have any credit card debt, bravo! You are well ahead of the curve. In that case, invest more!

Step Three: Pay off your full credit card balance every month. Do not skip a month for any reason. This will be difficult for most Americans, just because we are a nation built on debt (LOL!). In that case, refer to Step Two first. The goal is to carry no consumer debt beyond your house and cars (if you must). Work towards the day when you are debt free. Pay off consumer debt first and then pay extra on your mortgage. Even $100 a month extra can save you tens of thousands of dollars in interest on a typical mortgage.

Step Four: Put money aside automatically with automatic fund transfers by your bank for major expenses such as taxes, insurance, vacations, wish list items, college, etc. A good budget will let you know how much you’ll need. Remember, my advice on setting aside one day out of the month to go over finances? Do it!

Step Five: Live on the difference. You will know you are doing okay if you can pay off your credit card balance every month and you have cash left in your pocket and checking account. On the flip side, you will know there’s a problem when you can’t pay off a credit card balance right away or your bank balance starts dropping instead of going up. Those are your signals to adjust your budget, your spending and your savings. Monitor your money. Get rich.

While not everything here comes from David Bach’s book, all of it was inspired by it. I’ve have found that the most commonly used method among rich people is the automatic deduction and automatic savings. As I mention earlier, “After a while, we just didn’t miss it,” is the common saying.

Take care guys, and see you in seven!

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This year I have started a monthly habit of going over my finances every month on an appointed day. I have chosen the 15th of every month, and have vowed myself to drop everything on that evening to take out and update my debt and asset column.

Therefore, last Thursday evening I looked over my list and was happy to see that my debt column had gone down, and my asset section had gone up. However, that wasn’t enough for me. We are at an economic decline. I needed to find more ways to make myself rich and keep myself that way.

During periods of economic decline, we all find ourselves squeezed from both ends; facing both rising prices and loss of income. The media is not making it any better either by reporting that we are heading into a recession. So, while we may not have control over the economy, we do have control over how we prepare for financial difficulty.

Here are my top ten things to do (forgive me if I have said it before, it just means it’s that important to mention it twice):

1. Bring your own breakfast and lunch to work everyday instead of purchasing them. Food is always cheaper at a supermarket than a restaurant. Just think how much you will save if you just eat cereal or oatmeal from home versus a $5 breakfast sandwich with your $6 double soy latte from $tarF*ck$? Bringing your own lunch will save you even more money. Typical lunches run from $10 to $25. Packing your own only costs you $2-$5 if you know how to buy.

2. Separate “wants” from “needs.” Every time you are tempted to buy something, ask yourself this, “Do I really need this?” When money is tight, it should not be spent unless absolutely necessary.

3. Pay for unreimbursed medical expenses and dependent care with pretax dollars using a flexible savings account. This means using money from your paycheck before you get taxed. This is the same money that goes into your retirement accounts. Check with your employer for availability.

4. Keep track of all your spending. As simple as this sounds, the act of writing it down will help you give it more notice. If you know where your money is going, it will be easier to make changes if you need to.

5. Avoid using credit to pay your bills. While it may make things easier now, using credit only increases your monthly payments in the future.

6. Set up a direct deposit for your paycheck, and have some of it directly deposited into your savings account. Having this automated system set up is the key to gaining longterm wealth. I will come back to this tip in the future.

7. Avoid spending a significant amount of money on periodic purchases, like gifts and vacations. Other things to avoid are magazines, newspapers, and typical novelty drinks. While you may feel good while you are spending the money, you probably will be wishing you had the money back later.

8. Cut or downgrade your services. Can you live with cheaper cable services or no cable at all? If you have a cellphone, consider cutting your land-line.

9. Instead of buying a book, buying a magazine, or renting a video, use the library. It’s free!

10. Try to lower your energy bill. Turn off appliances and lights when they are not needed. Purchase energy efficient light bulbs. When you can, try using a fan instead of air conditioning and putting on a sweater instead of turning on the heat.

Okay, till next time guys, be smart, invest smart, and save smart.

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Happy New Year dear readers! I was schmoozing with a few fellow party attendees on the 1st, when I realized that many people still don’t truly understand what “Agency” means. It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in transactions. Ask your salesperson to explain what type of agency relationship you have with him or her and with the brokerage company next time you buy or sell.

1. Let’s begin with the Seller’s representative (also known as a listing agent or seller’s agent). A seller’s agent is hired by and represents the seller of the property. All fiduciary duties are owed to the seller. Now, I know what you are wondering: What the heck is fiduciary duty? It means that your agent owes you the duty of utmost good faith and must not put him or herself in a position where his or her personal interests and his or her duties may conflict. The agency relationship is usually created by a listing contract.

2. A Buyer’s representative (also known as a buyer’s agent) is a real estate licensee who is hired by prospective buyers to represent them in a real estate transaction. The buyer’s representative works in the buyer’s best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer’s representative may be paid by the seller or by a commission split with the listing broker.

3. A Subagent owes the same fiduciary duties to the agent’s principal as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not representing the buyer as a buyer’s representative or operating in a nonagency relationship, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.

The reason I bring up the subagent is due to the fact that there was a lot of referral fees being asked for and paid a couple of years ago during our real estate boom.

4. Disclosed dual agent. Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it’s vital that all parties give their informed consent. In many states, this consent must be in writing. My advice is always put it in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them is legal in most states.

5. Designated agent (also called, among other things, appointed agency). This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. However, the broker still has the responsibility of supervising both groups of licensees.

6. Nonagency relationship (sometimes called a transaction broker or facilitator). Some states permit a real estate licensee to have a type of nonagency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.

My personal advice? If you are a seller? Insist on agents from two different firms represent you and the buyer. Both would be focused on their respective clients, and therefore no conflicts of interests will arise. Don’t penny pinch and try to save on your fees by hiring one agent to do both jobs. If you are the buyer, i would suggest you find your own agent as well. What do you care? You, as the buyer, are not paying the commission anyways!

See you next time guys!

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