Here are the highlights from this past week's show.

Bulletproof Your Financial Future - Real Estate Bubble II

 

If you thought that the recent sub-prime mortgage bust was bad, we could be in for another wave of nasty foreclosures over the next couple of years. The poor performing adjustable rate mortgages will be replaced by an even more horrible "optional adjustable rate mortgage" bust. These types of sub-prime mortgages were often used for individuals with poor credit who could only afford to make the minimum payments.

An option ARM gave borrowers the option to pay the interest each month or skip it and have it added to the principle owed until the amount reached a certain percentage of the loan (110 - 120%) or up to five years.

The problem is not only that housing values have dropped, eliminating any potential equity, but also that most of these borrowers owe more than their original loan amount. Unable to refinance, and seeing that they are as much as 40% underwater in their home, experts say that many option arm borrowers may simply choose to strategically default on their loans.

So what's the smart thing to do now? Tune in this week to Bulletproof Your Financial Future on KNRS - now on FM 105.7, Saturday at 1:00 pm MST!

*** Resopnse to property owner ***

We are not really sure how great the economic impact these defaulting option ARM loans will be. Alan Greenspan said the economy could withstand another 5% drop in home prices, but if they fall much beyond that, more conventional mortgages will be underwater. My guess is that it is not going to be very good, and our research shows that this new wave of defaults could be pretty nasty. In my opinion, there could be a lot of opportunity in the future to purchase, once this next dip is over.

I hope that all goes well with your commercial property. Right now the commercial market is looking to be pretty saturated, so hopefully you will be able to stay competitive with falling lease prices.

Thanks for your comments!
- Bruce

Recently, I wrote about Cap and Trade: see previous post.

Experts, as in the the guys who originally came up with the cap and trade concept, say that there are far too many limitations to effectively implement the program effectively.

Check out this article.

Here are the highlights from this past week's radio show Bulletproof Your Financial Future.

Radio Show - August 1, 2009

 

We have posted a new edition of our Monthly Newsletter - Bulletproof Your Financial Future

AUGUST NEWSLETTER

In this month's issue:
Roth IRA Conversion Saves You Money - Part 1
IRAs - Frequently Asked Questions

I thought it might be interesting for my listeners to get a glimpse of what it is like on the radio. Here are some of the highlights from the last show on Roth IRAs. 

Bulletproof Your Financial Future - Roth IRAs 

Why is the Justice Department so incredibly inept at prosecuting securities fraud? The reason is they don't have anyone devoted to prosecuting these cases. In fact, there is not a single attorney in the entire Justice Department that is trained in the area of securities. Should a case come up, that they might want to prosecute, they'd probably have to look up the word securities in the dictionary to see what it means.

This is a completely untenable situation. It is imperative for the Justice Department to have its own division devoted exclusively to securities, set up with the best attorneys they can get their hands on. We know that the big firms are going to try and hire the best of the best to defend them so, it is time to even the playing field.

How are they going to do that? I believe that the best way to do that, again like what I said regarding the SEC, is to go out to the private sector, hire the best people as outside consultants to work on given cases. In an even fight, and with the right people on their side, I am confident that the Justice Department would have a pretty good chance at getting the job done.

The War Against Wall Street

Can you spare some change?
Deciding to convert a traditional IRA to a Roth IRA just got easier thanks to the Democrats. Obama, like a kid in a candy store, is spending like crazy and driving up the deficit. Cut through the sugar coated rhetoric and, once the economy starts to recover, you'll find one hefty bill left for taxpayers!

It's time to pay the piper.
So, what are you going to do? Did somebody say, "Impeach Obama?" Hmm... I like where you are going with that, but that could take years and right now you're better off with a Roth IRA. Think about it: with higher taxes looming in our future and the market nearing bottom, the time is ripe to give the government their share. After all, I'd rather pay 25-35% now than 60% later. The government has been your partner ever since you started saving, waiting to cash in on his portion of your retirement. Now is your chance to buy him out for cheap; plus, you won't have to worry about him coming for his cut later.

Go long!
A Roth Conversion especially makes sense now if your investments are down, and you expect them to go back up as the market recovers. Convert to a Roth IRA now, and pay the taxes on the depreciated value of your portfolio, then you can sit back and watch your investments grow tax free.

Everyone deserves a second chance.
Are you still worried that converting to a Roth IRA might not be a good idea? Well go ahead and swing anyway, because if you change your mind next year- you get a mulligan, baby! Roth IRA conversions are reversible. If you can't decide between converting now, in case they raise taxes, and waiting until 2010 so you can spread out the taxes over 2011 and 2012. Do it now and you can reverse it later if they don't raise taxes next year.

Double take.
In fact, you can reverse a Roth conversion and then reconvert it back to a Roth IRA again. If you already converted back when your portfolio was worth more, reverse it and then reconvert it back so that you are not stuck paying taxes on the balance before it went down. There are so many benefits, I can't think of a reason not to do it. A Roth IRA conversion truly is a beautiful thing!

We have posted a new edition of our Monthly Newsletter – Bulletproof Your Financial Future

JULY NEWSLETTER

In this month’s issue:

                Inflation – Short, Medium, and Long Term Outlooks

                Five Secret “Assets” to Build and Preserve Wealth

                Online Banking Security Alert