- RT @ScottATaylor: The Guys on "Pickers" should just follow the "Hoarders" teams around- perfect mashup #
- PI/PNK test: http://su.pr/2umNRQ #
- RT @punchdebt: When I get married this will be my marital slogan "Unity through Nudity" #
- http://su.pr/79idLn #
- RT @jeffrosecfp: Wow! RT @DanielLiterary:Stats show 80% of Americns want to write a book yet only 57% have read at least 1 bk in the last yr #
- @jeffrosecfp That's because everyone thinks their lives are unique and interesting. in reply to jeffrosecfp #
- @CarrieCheap Congrats! #CPA in reply to CarrieCheap #
- @prosperousfool I subscribe to my own feed in google reader. Auto backup for in between routine backups. Saved me when I got hacked. in reply to prosperousfool #
- @SuzeOrmanShow No more benefits? I bet the real unemployment rate goes down shortly thereafter. in reply to SuzeOrmanShow #
- Losing power really make me appreciate living in the future. #
The Evils of a Reverse Mortgage
Picture it: Sicily, 1922.
Sorry, wrong channel. Let’s try again.
Picture it: 20, 30, 50 years from now. You’re old. The money you’ve been failing to save so you could stock up on Fritos and obsolete video game consoles(to survive the zombie apocalypse in style) would come in handy about now, since the end of the world never happened. Note to self: Never trust an ancient Mayan.
You’re 70, with no savings and no income aside from the Social Security check that hasn’t been adjusted for inflation since the Palin(Bristol) administration.
But you own your house and that nice young man down at Yersk Rude Bank recommended a reverse mortgage. That could give you all of the money you need to live a comfortable retirement and pay for a bit of a funeral.
Right?
Nazzofast.
Of all of the possible social security strategies, this is one of the worst.
What is a reverse mortgage?
In a traditional mortgage, you’re given a chunk of money guaranteed by your home. You have to pay that money back over time, or you’ll lose your house. In a reverse mortgage, you’re still converting your home’s equity into cash, but you don’t have to pay it back until you die or move, including moving into a nursing home. You are effectively abandoning future-house in exchange for now-money.
Who qualifies for a reverse mortgage?
If you are 62 or older, and live in a home you own, you qualify. Credit and income are not considered.
Why would you want a reverse mortgage?
If money is tight and you have no prospects, a reverse mortgage may be a valid consideration. A better consideration would be to take out a traditional loan and make monthly payments out of that lump sum, or sell your house outright and move someplace more affordable.
What are the downsides of a reverse mortgage?
You lose your house. Technically, your heirs lose your house. A reverse mortgage becomes due when you die. If your heirs can’t cover the loan, the house will be foreclosed. Also, this is a loan. It accumulates interest, even if you aren’t paying it back. If you borrow $200,000 and die in 10 years, your estate may owe $400,000 on the reverse mortgage. If this is a treasured family home, losing it could come as a shocking blow at a time when your family would already be reeling from the loss of, well, you.
What if you really don’t like your heirs?
I’d still recommend getting a traditional mortgage. You can throw a killer party and then, you’ll rebuild equity over time. That way, if you live longer than you expect, you can refinance and throw another killer party. If you go this route, don’t invite the kids, but be sure to hire a videographer so they can see how you’re spending their inheritance.
I’m not a banker or a financial advisor, but I’d recommend against a reverse mortgage in almost all circumstances.
How about you? Would you get one, or recommend one? What’s your preferred method to hurt your ungrateful heirs?
Automatic Everything
In an effort to simplify my finances, I’ve automated every bill I have. For years, I resisted, fearing a lack of control over my money. A few months ago, I re-examined the bill paying options on my bank’s website and changed my mind. This is one thing that USBank has done right.
The first thing I did was set a budget. Without a budget, it’s not possible to let your money take care of itself. I did this months before I decided to automate.
All of the bills that offer a budget plan–a plan that averages your payments to avoid fluctuation–went on the plan. It means I do overpay some months, but it also means I get to underpay some months. Most important, I always know what will be due. These bills were scheduled in the bank’s online bill paying system as is, along with the rest of the bills that do not fluctuate.
All of the bills that do fluctuate went in to the bill paying system at their highest level. For example, I don’t pay for text messaging on my cell phone. Some months, I send and receive text messages. I pay my cell phone bill assuming that there will be a few messages. This is slowly building a credit on my account. If I don’t use all of the credit, I will get to skip a month of payments sometime next year.
I keep track of all of this using Quicken. Every one of these bill is in the calendar. They are all scheduled to be entered into the register on the first of the month, to post of the actual day of payment. This lets me see, at a glance, my cash flow for the entire month.
But wait! What about the non-monthly payments, you ask? They are also in Quicken, broken into monthly line items. There’s a “Set aside for property taxes” item, a “Set aside for web host” item, and a few other items.
My time to maintain this has been reduced to comparing the bills to the bill-paying system every other week. At the same time, I consolidate all of the “set asides” so I don’t have 10 property tax entries when one will do.
I know this is an inefficient method of saving money, but my goal isn’t to save money, it’s automating money and removing one layer of stress from my life. It has transformed bill-paying from an hour or two per week to 20 minutes, twice per month and very little stress.
Ending A Streak
The first year I decorated our yard for Halloween was 1999. The first year we through a Halloween party was 1998.
Our parties tend to fall on the legendary side. Between setup, cleanup, and out-of-town guests, the party is a 3-4 day affair. People reserve our spare beds a year in advance. The day of the party itself, we’re going from 10AM until 5AM, cooking, drinking, and talking. Over the 10 hours the party is actively going, we have 50-60 guests in and out.
Our yard is a neighborhood attraction. We’ve been on the news and in the newspaper. By the end of Halloween night, the path through the yard is nearly worn down to bare dirt. The spot the large coffin sits takes 6 weeks to rejuvenate in the spring. I’ve literally scared kids right out of their masks. Little old ladies have jumped out in the air, shrieking, only to ask me to hide again, so they can bring their husbands over to enjoy the startle.
This year, we end the 13-year unbroken streak of fear and debauchery. We’ve been doing this since before any my oldest kid was weaned.
It’s hard to take a break, but…
Dealing with my mother-in-law’s house has been far too much work for us. We spent all summer cleaning out the hoarding mess.
And fixing up the yard.
And replacing the boiler.
And fixing the plumbing.
And updating the electrical system.
And fixing up the basement.
And patching the walls.
And selling the cars.
And sorting through 30 years of every scrap of paper that has ever come through the house.
And dealing with all of the memories, and the pictures, and the past.
It’s been too much, and it’s not done.
Now, it’s the middle of October, and the idea of stealing the extra time to add the extra stress of setting up the yard and throwing a big party makes me want to break down.
Two days to set up the yard, only to have some kid steal my favorite, irreplaceable pieces, then two days to pack it all up.
A day of decorating inside, followed by a party and a hungover day of cleaning it all up.
All of that, while losing time from the side business and pushing through to the end of the property preparation from hell.
I can’t do it, so, as sad as it makes me, we’re taking the year off. No Halloween events at my house this year.
Daytrading Bitcoin and Cryptocurrency
For the past 6 weeks, I’ve been playing with Bitcoin and Litecoin.
I can hear you from across the internet. You’re asking, “What the hell is Bitcoin?”
I’m glad you asked. It’s a cryptocurrency.
And now you know as much as you did before.
Cryptocurrencies are anonymous internet-based money. You spend it just like money, though granted, there are fewer places that accept cryptocurrency.
The big name in cryptocurrency is Bitcoin. In second place, trying to play silver to Bitcoin’s gold, is Litecoin.
So what do I mean by “playing with” Bitcoin and Litecoin?
I’ve been daytrading, which is generally a horrible idea…when you’re doing it with stocks. Daytrading is gambling. It’s the art of doing short-term flips on a stock. You buy it today to sell tomorrow, hoping it goes up. With stocks, I play a long game. I buy and hold. I buy a stock that I believe has long-term value, and I hold it for months or years.
That’s not the game I play with BTC and LTC. I play a short game, rarely longer than a week. When the coins are at a low price, I buy, then I immediately sell when they price is higher. When it’s high, I short the coin, essentially selling coins I don’t own to trade back when the dollar-price is lower. When I’m paying attention, I make money as the coins go up and I make money when the coins go down.
Why is this a good strategy for cryptocoins?
Because they are extremely volatile. As I’m writing this, Litecoin has had a 10% swing today, from $4.03 at midnight, to a current price of $4.16, with a peak of $4.36. On Thursday, it was floating around $4.60 all day. In the last 30 days, it’s been as high as $8.65 and as low as $3.18. Go back to May and the low is $1.29.
Traditional wisdom says that volatile investments are bad. In traditional investments, that’s true. But when a stock is this volatile, nearly every bet is a good one, as long as you’re patient. If I buy LTC at $4.20 and it drops to $3.90, that’s bad. I lost money. But, if I wait a couple of days, it’s almost definitely going to climb back up. Except for large-scale sell-offs, it’s usually going to bounce 10% in a given day. You can buy in the dips and sell at the peaks all day long, turning 5-10% profits with each time. If you’re brave or stupid, you can short at the peaks and make 5-10% on every downturn, too.
For example, today started at $4.03. Buy. Today’s peak was at 7:15AM at $4.36. When the graphs start swinging down, sell short. Two hours later, it bottomed out at $4.20 for a 4% return. Then, buy while it’s low. Ninety minutes later, it was at $4.31, another 3% return. Short it again, then close the position at 7PM for $4.13.
Let’s walk through this.
Buy $10 worth of Litecoin at midnight, sell at 7:15AM. You have $10.81.
Turn around and short the same amount until 9AM. You have $11.22.
Buy that same amount to sell at 10:30AM. You have $11.51.
Short it again before closing out at 7PM and going to bed. You have 12.01. That’s almost a 12% return in 12 hours, assuming you guessed all of the major swings right. If you guessed some wrong, you’d just have to wait until the next time it swung your way, and it will. Did I do that well? No. I bought in at $4.008 yesterday and sold today-once-for $4.32. I will not complain at an 8% return over 12 hours.
The only exception to that is during major buying and selling streaks. On July 5th, a major buying run started. By July 8th, the price was run up to $8.65. A huge sell-off happened then, dropping the price to $4.36 on July 9th.
If you bought at $8.65 you’d be hosed.
The lesson there is, don’t buy at the peak. I’ve had a number of trades that could have been huge scores if I would have held onto them longer, but I’m a wimp. I sell as soon as I’ve gotten enough money to make me smile, then I refuse to regret the decision. That also prevents me from holding on to my positions too long. I avoid all of the crashes that way. That giant buy-in happened while I was on vacation, so I wasn’t paying attention. When I’m not paying attention, I leave my money in US dollars, so there’s no risk…and also no reward.
Also, an important caveat: while I am learning the cryptocurrency ropes, I’m playing with a non-critical amount of money. I put $75 into the exchange in June. Not enough to cry over losing, but enough I can play with all of the different investment options. As I said, I’m a wimp, although a 30% return in 7 weeks is pretty sweet.
Next up, I’ll show you how to get started investing/gambling with Bitcoin.
WWE: Money in the Bank, or all Hype?
Most people will never realize what it’s like to lose $350 million in a single day, but if you’re Vince McMahon you know the feeling all too well. However, before you start collecting money to give to the WWE CEO, let’s remember that despite that setback he’s still worth a cool $750 million. So while he got knocked out of the billionaire’s club, he’s still a full-fledged member of the multi-millionaire’s club.
World Wrestling Entertainment, thinking anything it does is money in the bank, has been busy lately securing television deals for its various programs such as Raw and Smackdown. While Mr. McMahon got the deals finalized with networks owned by NBCUniversal, the price he got was considered by analysts to be far lower than what he was looking for. As a result, WWE stock prices plunged nearly 43 percent in a single day, costing Vince his billionaire club card.
However, despite the rough financial spot in the road, don’t think the WWE is ready to tap out anytime soon. The WWE Network, an on-demand streaming service launched by the company earlier this year, is already approaching one million subscribers. Despite what will probably be an initial loss of $50 million for the fledgling network, McMahon and other WWE executives believe the network will eventually become a money-maker for the company.
So while Triple H, the Rock and John Cena have helped make the WWE what it is today, there are many other superstars who are helping take the company to even greater heights. In recent years, perhaps none are more well-known and liked than the company’s Divas. Whoever said sex sells sure knew what they were talking about, because it seems the wrestling fans simply can’t get enough of the beauties who fight it out every week for glory and gold. With the show Total Divas on the E! Network for the next several years, fans will continue to get their weekly dose of the ring beauties there as well as on the other shows in the WWE camp.
So while it’s not money in the bank that all of the company’s ventures will pan out as hoped, it’s a good bet Mr. McMahon and those associated with the WWE will continue to figure out what fans are wanting and deliver it to them on a regular basis. And whether or not you are a wrestling fan, you’ve got to admit the WWE is a captivating experience in sports entertainment that keeps fans coming back for more each and every week.
