COPING WITH NEW REALITIES.

We have to fight them daily, like fleas, those many small worries about the morrow, for they sap our energies. (Quote from unknown source.)

Wildwood by Moonlight.

This Says It All. It's very difficult to do and I'm no better than most others in dismissing my concerns about the future. Especially, when it appears that the those who run the companies in which we invest have let their greed get in the way of the best interests of the shareholders and the government, which claims to know how to fix things doesn't have a clue as to what really needs to be done. One thing I believe is that doing more of the excessive borrowing and spending that got us here in the first place will not get us out of the mess we find ourselves in. At this point, I can be optimistic in the fact that I can still see the moon shining over the lake in my back yard, the azaleas are starting to bloom like they do every spring, and I can hear the birds singing in my back yard (if I put my hearing aids on).

Self Reliance Is The Key. If we can't depend on industry or the government to bail us out, I guess I have to go back to what got me out of poverty in the first place: My own talent and work ethic, with a little helping of luck. My main focus is to continue to increase my cash flow. Perhaps a few more writing assignments, some more prudent investments, and looking at ways to eliminate unproductive spending. Of all these, the safest way to make sure I can survive is via controlling my living expenses. I would encourage everyone to ignore the government urging us to spend more and do what you need to do to control your expenses.

I'm looking at A Reverse Mortgage. I have always considered these to be a good vehicle for seniors to increase their cash flow. You can get a lump sum to use for any purpose, a monthly income, or a line of credit. The most attractive thing about a reverse mortgage is that you don't have to make payments and, regardless of how much you borrow, you and your spouse can live in the house as long as you live. When you die, your heirs can inherit the house but they have to pay off the current mortgage which increases every month. If they can't find new financing or sell the property for more than the loan balance, it belongs to the lender. The lender cannot make any claim upon the heirs or on other assets in the estate. The worst characteristic of this loan is the high closing costs which are based on the value of the house not the loan balance. If your tenure in the house is short, these costs are significant; however, they are don't amount to near as much over the long term. To summarize, this loan makes sense if you intend to occupy the property for the remainder of your or your spouse's life and if your heirs prefer to inherit other assets instead of the house; however, if this is your family home with significance to your heirs or if you plan to move in less than 3 years, you probably want to pass up this idea. The first problem I have encountered is the poor responsiveness of lenders who don't seem to be all that anxious to call you back.

The Denver Housing Market Shows Signs of Recovery. If you are one of the few investors who still has cash, the housing market is improving. Builders are building less, interest rates are lower, and the current excess inventory is being absorbed. While I don't recommend rushing into the market, it appears that there will be some real opportunities in 2009. If you have to change your residence for good reason, you might want to consider renting it out for a couple of years until the market rebounds. Don't forget that you have to live in it for two of the past 5 years to avoid tax on the gain (If you still have one).

I Am Coming To Denver. I will be there the week of Feb 23 to March 2. If you want to schedule a meeting give Susan a call. Her number is 720-449-0200. I look forward to spending some time with you.