Wow!  I never guessed that it would take me over 8 months to post again on this site.  Many changes have occurred in my life over the past 8+ months.  The death of a family member in June, 2010 had the impact 0f absorbing months of my life as I helped with the myriad tasks in settling the estate.  It has been an educational process and one I will take time to learn more about as I pursue writing books to help consumers become more savvy in protecting and increasing their wealth.

RETIRED?  WELL, SORT OF…..

I retired from RE/MAX at the end of January.  After almost 8 years, it was a decision that did not come lightly, but I realized the time was right.  I still have a Colorado real estate license and have maintained my membership in Pikes Peak Association of Realtors, CAR, and NAR through 2011.  But I turned in my electronic lockbox key, sold all my lockboxes, and made the decision to spend my days pursuing a new course for my life - as an author and speaker on financial topics.

FIRST, A SABBATICAL

My first goal is to spend some time catching up on my personal life, so a 6 month hiatus from business is in order.  I still have a business association with 2 great RE/MAX agents and refer my clients and friends to them as the need arises.  This works very well for them and for my clients.  I like to help good people stay in business and I want to make sure all my great clients are taken care of when they need help with real estate.  But I also realized that instead of marching headlong into another career, that I needed to take a break, take some time to focus on personal matters, spend more time making art, and catch my breath before jumping into learning about a new industry (for me!) and building a new direction for my life.  So that is what I am doing.

During this time, I hope to post interesting commentaries on topics I consider relevant to the current real estate and financial markets, check out and report on more great local restaurants, and do a few book reviews.  Posting won’t be often or consistent over the next 6 months, but there will be things here from time to time, so stop by occasionally to see what’s new.

VISIT WITH ME

I also realize that I don’t want to become a hermit.  I don’t make a good hermit because I like to talk with people and hear their ideas.  So I am planning regular escapes from the house to work on some writing and meet with people who want to stop by and visit with me.  By April 1st, I plan to select a location or two around Colorado Springs to spend a few hours once a week to get myself out where people are.  I have my art groups and a networking and book club I attend regularly, but that’s different.  I’m looking for a place to hang out and have spontaneous conversations with people I meet.  No networking obligations, just a time to relax, have a cup of coffee, and chat with people.  I hope you will join me!

Live Your Dreams!

So until my next post, Live Your Dreams!  The economy is on the mend, but it won’t be an easy road.  With almost 25% of all mortgages underwater, we are looking at a different version of the real estate market than we’ve seen in the past.  In one way, not posting for months has given me a perspective I don’t think I would have had if I’d had my head in the computer every week.  But we’ll talk about that more in future posts.  See you then!

I’ve mentioned before that I see trends.  I think it is because I look for trends.  Everything we know points us to conclusions that are colored by what we believe.  Yesterday I read an article and thought, “well, duh!”.  Everything said was something that I had already identified and knew to be true.  The article just seems a little late to the party or am I prescient?  Certainly other people must see what I’m seeing.  If you read the popular press it keeps pointing out statistics that seem to show that the economy and real estate markets are improving.  From my perspective, we had an artificial blip produced by the tax credits and we have borrowed buyers from the future.  I don’t see new jobs being created and am not sure where they will come from, but perhaps China loosening their currency will help with exports.  Or perhaps it will help with cost of goods manufactured in the US so that they are more competitively priced so that we Americans will buy goods manufactured in the US.  That would help create jobs here at home.  Luckily for us all, nothing stands still and things will improve, but until people feel secure and feel they have options, the economy will be at a standstill.  The news isn’t all bad because the DJIA is still hovering around 10,000 and that indicates people are feeling more comfortable financially than they were a few years ago.  Let’s hope we can keep improving on that comfort level to the benefit of all Americans.

Oh yes, the article I read is right here for you to read too.  Enjoy!

Less Restaurant Consumers in 2008

After the stock market tanked in October, 2008, Colorado Springs restaurants were ghost towns for awhile.  We stopped eating out as much, which is better for our waistlines anyway, and apparently a lot of other people decided also that eating at home saved money.  I’m sure it was a very scary time for restaurant owners as they tried to keep their employees working with virtually empty dining rooms.  The good news was that when you went out to eat, you were seated right away, but at a huge cost to the local economy. 

Do You Think Service Has Improved?

Now, it is June, 2010, and when we do go out to eat we see more people in the restaurants, but I don’t think it’s at the same level it was during the summer of 2008.  I know we personally have cut down on how often we eat out and we made that decision first in an effort to eat healthier and also to save more money as we build our assets to get to retirement.  The thing we have noticed is that restaurants also seem to be appreciating their clientele more.  Service is much better in general than it was 2 years ago.  I don’t think we are the only ones not eating out as often so restaurants are competing for less customers.  If we get bad service we will think twice about going back.  If we get great service, we notice, and appreciate the effort of the servers and the training they are obviously getting to help them serve customers better.

Let’s Keep Good Service Going

When the economy is roaring, all boats float.  But when times get tough, you get to see who is left standing - those who understand what business is about and understand the value of their customers.  We aren’t past seeing changes yet.  In the long run, everyone will have a new perspective of what is important in life and I think we’ll be better for it.  Restaurants are not the only businesses affected by less business.  The real estate industry has definitely lost a lot of jobs.  We are seeing tightening across most industry segments.  As things improve and people “go back to normal”, I don’t think normal will be the same as it was 3 years ago.  We can all hope the lessons of providing good service continue to be kept top of mind.

Recent Stock Market Movement

As I expected, the drop of over 1000 points from the DJIA recently has pushed the DOW near 10,000 once again and not unexpectedly, we have a little bounce above 10,000 today as bargain hunters look for opportunities.  With another big drop yesterday, I received a call from my sister asking what I thought about the recent downturn.  My response was that she shouldn’t be concerned about day to day movements IF she has her portfolio positioned to represent her risk tolerance.  That’s what I have done and I can go about my daily life without fretting about what the stock market is doing because I have a plan.  Do you have a plan?  Do you understand what has been happening in the markets the past few years?  If not, read and learn and get the help of a competent professional if you are uncertain or afraid.  There is always risk in investing, but there is also risk in not investing.

The best thing you can do to sleep better at night is understand the amount of risk you are taking to achieve the return you desire.  Risk tolerance changes for most people over time, so look at when you need the money you are investing.  Remember to think about your money in at least three time frames - short term (up to 2 years), midterm (2-10 year needs), and long term (10 years or more) so you have a plan for the future and can still take advantage of growth to meet your goals.  You do have goals, don’t you?

Personal Finance Blogs and Saving

I took some time yesterday to look at a few personal finance blogs.  My daughter has been telling me about those that she follows, so I checked one out.  That blog is The Simple Dollar.  The author has a “picked myself up from financial ruin and improved my life” theme and he appears to post good common sense - which as you recall, is not so common anymore.  Reading his blog made my always synergizing brain start pumping out ideas for posts.  The real life of someone else is always a touch stone for others, whether they shake their heads in disbelief or nod because they relate.  The particular post I found interesting concerned snowflaking as a method to reduce debt or increase savings.  It is all about forming positive long term habits.

My Method for Saving While Still Having Fun

I always encouraged my daughters to save.  And those lessons carry forward because they are both still savers and investors.  That doesn’t mean they don’t have fun and spend money.  It just means they are intentional about their spending.  Being frivolous was not a way of life in our household.  It is something you do once in awhile to have a fun moment that you remember with glee.

So what is the savings lesson?  When I was a financial advisor I taught that there are 3 types of saving - one for short term or emergency needs, one for midterm needs (3 - 10 years) and one for long term needs (10 years or further away).  I am no longer an advisor and this column is not intended as professional advice.  I just know a lot about it and like to share ideas that can be helpful.  It is always important to have money tucked away in very safe accounts to meet those short term needs.  If your car breaks down or you have to go to the dentist, or some other non-negotiable event occurs, you need to be able to pay for it without racking up debt on your credit cards.  This money can’t be risked.  General guidelines will tell you to have 3-6 months worth of living expenses.  I say work towards a year’s worth of cash, especially with the employment situation the country is in right now.  Wouldn’t you like to NOT have to worry about where your money would come from for a year if you had no income coming in?  If you are retiring, it is good to have 2-3 years of income in cash just in case the market does what it did in 2008 and you will have some time for your longer term investments to try to recover.

Mid Term Savings and Long Term Savings

What things would you save for that might be out as far as 10 years?  How about paying cash for a new car or at least putting down a large down payment so you can pay it off in 2-3 years?  How about a real estate investment that you would like for an income stream from rentals or a lake house to use on weekends?  How old are your children?  Will they be going to college within 10 years?  Wouldn’t it be nice to have a cushion to help with those expenses?  I’m sure you can think of other desires you have for the next 10 years.  For retirees, these investments should include your less volative investments that provide income or future appreciation that you can tap into 5-10 years down the road.  Investments that won’t be needed for 10 years or more can be positioned to generate higher returns but they also typically incur greater risk.  Many people who are retiring soon think they need to get rid of all risk in their investments.  But the bigger risk is inflation.  Ask yourself this question - are you going to USE all your money within the next 10 years?  I didn’t think so.  So think differently about risk and read some good books on the topic.  You can start with titles in my Recommended Reading List on this site.

Saving for Fun

Well this is all well and good, but we did mention fun at the beginning of this post.  I’d like to share a story about my youngest daughter’s savings habits when she was still in elementary school.  She was perusing her savings one day and I stopped to chat with her about how she was doing.  She was a very wise child and said “Mom, I have 3 jars of money.  The first is for fun cheap stuff, like candy.  The second is for things that cost more, like a video game.  And the third jar is for the money I’m saving for something special I might want that is more expensive.”  I thought that was a pretty good plan for an elementary age saver.  She had already decided that some money wasn’t to be touched unless it went towards a specific financial goal.  We eventually put her “more expensive” jar of money into a money market account and she left home with it intact when she went to college.  And 8 years later I would bet she still has most, if not all of it.  That’s the way long term money is supposed to be handled - as if it doesn’t even exist.  And she still had the freedom to spend her short term (candy) and mid term (video game) money because she made a plan.

So make a plan.  Check out some good personal finance blogs (The Simple Dollar) has links on the home page to Blogs I Read), read some good books from the library, and keep coming back here for more insights to help you create wealth and breathe a sigh of calm because you are putting away 3 types of money.  You can afford a fun reward to celebrate all your efforts.  If you need to tackle debt first, read some of Dave Ramsey’s books to get you started.  Create good habits to replace the old bad habits.  Now, go out a buy yourself a little treat because a fun reward doesn’t have to be expensive.

Some words are tossed around easily and used in advertising unsparingly.  It takes the power away from them because they are seen so often they are dismissed as just more noise.  In thinking about that, I thought about the word Dedication.  My team and I are dedicated to our clients, but what does that really mean?  How do you know we are dedicated?  Is that a description of a business person that you’d like to work with?

Dedication According to Webster

Webster’s Dictionary defines dedication as self sacrificing devotion.  Wow!  That’s pretty heavy duty.  Soldiers are dedicated to our protection.  That’s the first thought that comes to my mind.  Firefighters who ran into the towers on September 11, 2001 were dedicated.  They saved a lot of people through their dedication and many of them lost their lives - self sacrificing.  Most people are dedicated and devoted to their children.  So does the word dedication belong in business?

Dedication in Business

To me, dedication in business is putting your clients’ needs first.  In a retail setting that would mean providing excellent service, going the extra step, and being available to assist customers skillfully when they need help.  In a professional service industry, such as accounting, financial advice, lending, banking, real estate, law, among others, it means providing the fiduciary service to the client that has been promised to them by commitment of the professional to their industry.

In my business, it is doing the absolute best for your client by providing advice, service, and skill that helps them achieve the goal they have set for themself.  Being dedicated also means being truthful upfront so the client knows what to expect throughout the process.  In other words, helping them avoid the unexpected by being diligent, knowlegeable, and communicative.  Better get out the dictionary, we are loading up on big words here!  But it all comes down to 2 words - dedication means acting with integrity and ethics.  That is the type of professional I want to work with - one who is dedicated.  They always rise to the top because they don’t know any other way to be - being dedicated is in their genes.

I first read a Seth Godin book when I bought The Dip.  It helped me understand personal energy and business and how they work together.  Occasionally I see references to his blog, but you know life is busy and I forget to check in and see what new things he has to share.  I now follow him on Twitter so I don’t forget to check in.  Seth likes to share.  He’s very smart about giving and that creates an interest in his books.  I hope he continues to be wildly successful.  Today I ran across a link to his blog again and it was linked to an article on buying a home.  Or as he puts How to Buy a HOUSE.  There is a difference.  We create homes and we live in houses.  Check out Seth’s blog to see what he thinks about it.  What do you think?

I’m a trend analyst.  Not by formal training, but by nature.  Trends help me try to make sense of the universe.  I really must be a math geek because I am always looking for patterns.  I guess that’s why stock trading appeals to me.  As the DJIA hovers around 11,000, my curiosity peaked and I decided to take a random, or not so random, walk through recent history.  A lot of people follow the S&P, but I like the DOW.  It’s a microcosm that tells us about America.  I use the S&P and Nasdaq to verify what I think I’m seeing.

RECENT HISTORY

So what did my walk tell me?  That being in the market and investing regularly is a good thing.  I’ve mentioned before how the market went sideways through the 1970s but people still made money.  They did it by continuing to invest smartly.  As I get close to retirement I have tempered my usual aggressive self somewhat, but if you still have 20 or 30 years to invest before starting to withdraw assets, you may find my trend analysis interesting.  Even you old boomer farts (like me) might want to follow along.

A SIDEWAYS TREND

We have been in a sideways trend between 10,000 and 11,000 for the past 6 months.  That is the longest sideways run since 2007 when the DJIA moved sideways in a 1000 point range for 9 months.  It will be interesting to see if we break 11,000 and move up or meet resistance for awhile.  After hearing my analysis, you decide what you think will happen.  Starting in April, 1999 the DOW hit 10,000 and didn’t look back until the market bobbles in 2001 and 2002, in effect a 3 year run before a major change occurred.  Then in May, 2002 the market started a slide to around 7500.  Recovery was quick - 10 months of hand wringing until the market started up in March, 2003 and was once again above 10,000 in December, 2003.  People who kept buying (that would be me) were happy and had a nice double digit increase in 2003.  The DOW stayed in a range between 10,000 and 11,000 when it once again started rising in February, 2006.  At that point the market kept going up and up for 20 months until the DJIA was over 14,000 in October, 2007.  It was a lofty year for stocks and real estate alike.  But then things started to change.  After such a heady rise for over 4 years, it was hard to appreciate that the end was near in October, 2007.  The DOW stair stepped it’s way down to 13,000 and dropped to around 11,000.  It was a confusing market.  The average 401k investor couldn’t tell if it was building resistance or support. (Check the recommended reading list if these are foreign terms.)  Hindsight tells us it was definitely resistance.

In August, 2008 the party came to a crashing end with a 3 1/2 month long freefall that caused people to start crying “depression”.  Those who had ignored everything occurring in the economy were blindsided and lost 40-50 percent of their investments.  A 28% drop occurred during those 3 1/2 months with another 16% decrease until the DJIA hit bottom in March, 2009.  With the mortgage debacle that was happening, bonds weren’t sacred either.  The chase for higher bond yields in funds put these investments at risk.  An interesting aside is that market volume started rising above 2 Billion shares in September 2005 and continued to rise until it hovered mostly above 5 Billion shares from August, 2008 until June, 2009.  Volume still is hovering over 4 Billion shares, double the rate in 2005.  Who is buying and who is selling?

THE GLOBAL ECONOMY

So now we’re touching 11,000 on the DOW.  We’ve been above 10,000 since November, 2009.  The real estate market appears to be recovering.  But where are the jobs?  Where will they come from?  The banks are sitting on their impressive returns after TARP money was handed out, but businesses need capital to grow.  Without business growth there is no job growth.  The government doesn’t produce anything so all the “stimulus” activity is just blowing sand until business owners start feeling confident enough to start letting go of the purse strings.  I don’t see that happening in the real estate market yet.  Realtors are conserving cash because they know (those that educate themselves) there is another wave of foreclosures coming that will affect real estate prices until 2013.  Arms are resetting.  One of every 6 mortgages is in default and 1 in 4 mortgages is underwater.  There is phantom inventory sitting in bankers’ portfolios and there are phantom short sales overhanging the market because some delinquent loans haven’t been foreclosed on….yet.  But does that all mean you should pull out of the market and hunker down for the long haul?  Everyone has to check their gut to see how they feel about that.  I’ve pulled back more than I normally do, but I have a short timeframe before I need to tap into my money.

For people with a long view, this market offers buying opportunities that are appealing for both stock based investments and real estate.  We could have a long sideways market.  We could see the market slip again if a lot of bad news hits the presses.  My gut is telling me that we’re not going to see any long sustained increases in the stock market or in real estate prices anytime soon.  Only time will tell me if I’m right.  The DOW is still 22.5% lower than at the height of the market in 2007.  We’ve been over 14,000 before and we’ll probably get there again.  We just don’t know when that will happen.  We not only are affected by what happens in the US but by what happens worldwide.  China owns a lot of treasury bonds.  The EU is having issues with Greece and trying to decide when/if to step in to protect the euro.  The EU is like a mini US now and they have to play nice with each other to hold things together.  It will be interesting to see what financially solid Germany does as things play out.

WHAT SHOULD I DO?

Some people are comfortable being contrarians and taking educated risks to try to take advantages of market opportunities.  Others are more comfortable pulling out, sitting back, and taking a wait and see approach.  Common sense for one person is very different for someone else.  I believe in knowledge.  The more you have, the more you can make educated decisions that feel like common sense.  So my recommendation is to read, listen, talk to people you trust, and educate yourself.  After awhile a pattern will emerge that makes sense to you so you can try to make sense of the universe.

Today is cleaning day - not only my office, but my web presence.  I was looking for old links that no longer work, posts that are irrelevant, and reviewing profiles for dated information.  What I discovered is that in the 5 years this blog has been in existence, a lot of what has been posted still offers valuable information for our readers.  We categorize the posts so you can easily find what you are looking for and to try to keep similar content together.  We try to be consistent about the tags we use so you can locate a post you read 2 years ago and wanted to reread.

So check it out!  There’s some good stuff squirreled away in the various categories.  If you want to help us improve, leave a comment and we’ll consider your thoughts.  We have many new ideas that you’ll see in upcoming months.  And those seminars we have been promising for the past year are getting closer.  You’ll be the first to know when our focus group seminar is scheduled.  There is a lot of information we want to make available and we want it to be current and user friendly.  We hope you will stay tuned.

Trying to pick up a quick lunch before going back to work?  In the car between appointments and feeling hungry?  After 14 years in Texas and another 22 in Colorado, I love anything with chilis.  Of course my favorite southwest food is at my favorite restaurants in New Mexico, but I can’t get there every day.  So what’s a girl to do?

When I’m hungry, I pick up a burrito at either Chipotle or Qdoba.  I admit I go to Chipotle more often because I’m a creature of habit and they came to Colorado Springs first, but both have fresh ingredients and lots of options.  Tell me if you think Qdoba’s website is more fun.  Another advantage is that they are both located all over town.  So the next time you feel hungry and want to “fill er up” give one of these local quick food shops a try.  Meet a friend there.  Friends will tell you if you drip salsa on your shirt.  Both restaurants provide napkins.