This is a Good Time to Put Your House in Order

This is a Good Time to Put Your House in Order

If you’re one of the unfortunate caught in a nasty financial situation because of the upheaval in the economy, you have our sympathy and sincere wishes for a successful recovery. If real estate is an element of your dilemma, we’d be happy to help you in any way we can.

For people who need to just weather the storm, this is a perfect time to put your house in order. By that we mean taking a good look at where you are, where you want to go and how you’re going to get there.

Getting a Perspective on Wealth

In 1992 Joe Dominquez and Vicki Robin came out with a national best-seller called Your Money or Your Life. One of the key elements in the book is the idea of diminishing returns.

If you chart the quantity of possessions and material wealth along the bottom of a chart, with zero at the starting point and increasing as you move to the right, and plot on the vertical axis the happiness and satisfaction that come from those possessions, you get a bell curve that rises steeply at the beginning (acquiring basic possessions yields considerable happiness), but becomes flatter, and at some point the curve turns down.

The high point is the point of diminishing returns, which means that stuff and wealth can turn from giving pleasure and adding happiness to becoming a burden. In other words, there’s a point called enough.

Building a Fresh Foundation

A lot of people are being forced to reprioritize, for others it’s a choice. Either way, it’s a good time to think about your life, your lifestyle and your priorities so that you can move forward from a more solid foundation when the economic clouds begin to lift. Chances are good that the decades of excess are over, and it’s time to shift to more conscious and more disciplined living. You can start working on your own foundation by:

·   Getting clear about your personal priorities (What do you want out of life? What is “enough” for you in terms of material wealth?)

·   Determining your net worth (Without an inventory of belongings and other assets you don’t know if you’re over or under insuring, and you may be paying for real estate or storage to house things you no longer want or need—do a major clutter clearing. Get rid of unneeded, risky or losing assets.)

·   Getting clear about your means (How much discretionary wealth do you actually have? Is it enough? What can you do to increase discretionary wealth if you want more?)

·   Monitoring your spending (If you don’t already do it, track all your spending so you know where every penny goes. Write down every expense, even if it’s change—you’ll be surprised at how many little “leaks” there are that drain your energy and wealth. Otherwise you can’t know if you’re living within your means.)

Use the new Making Work Pay tax credit that is part of the federal stimulus package to improve your money management skills. A few more dollars in each paycheck may not seem like much, but use it to pay off some debt or to invest. See what happens if you manage that little bit of extra money with more mindfulness.

The Real Estate Piece of Your Plan

Your home is probably the biggest part of your net worth, and for many it is not the asset it once appeared to be. If you do decide to get organized and to get on top of your financial situation, you should know what your property is worth. We can give you a good estimated market value at any time.

After reviewing and re-setting your priorities you may decide it’s time to downsize. Give us a call and we’ll help you determine your options.

Maybe you’ll discover that you no longer need to be a renter; that with historically low interest rates and federal tax incentives you can become a home owner. Contact us to determine what size loan you could qualify for and the kind of property that would be right for you.

It’s a perfect time to put your personal house in order.

Contact The Ron Howard Group @ 410-814-2404 or email Ron @ ron@livebaltimorecity.com.