Wear sunscreen and retire early.

This morning I was reading an article from one of my favorite blogs: Early Retirement Extreme. I thought you would enjoy it.

Don’t wear sunscreen



Spoken to the tune of “Wear Sunscreen”.

If I could give you a single piece of advice. This would be it: Live beyond your means. The long term consequences of living beyond your means have been demonstrated to lead to bankruptcy whereas the rest of my advice is only intended to poke fun at consumer culture.

Buy as much house as you can afford. In fact, buy a bigger house than you can afford. Get a no money down ARM. Don’t worry. Real estate always go up, so if money Logo Sunscreengets short, get a second mortgage. Buy a new dining room set. Your current set is sooo yesteryear. Keep the lights on. Turning them off wastes energy. Keep the heat turned up. If it gets too warm, wear shorts even if it’s winter outside. So go buy some shorts. Buy a new car and replace it every second year. Fully loaded is the way to go. Fill your garage with stuff that no longer fits inside your home. Fully loaded goes for your garage as well. Besides, parking your car outside while keeping your garage door open leaving all your stuff for the world to see will impress the neighbors. Buy a second car. A jeep that never leaves the road is a classy choiceand demonstrate your sense of adventure. Marry the person you fell in love with four months ago. Get a divorce four years later but not before you have had at least two kids. Buy hydroxycut and two gym memberships to get in shape for the beach. Remarry. Repeat and rinse. Eat out at restaurants. Order food in. Party. Get a 250+ channel cable subscription but keep renting movies. Build your own home cinema. Build your own game room. Build a home bar. Install a heated pool for the garden. Charge everything on credit cards. Make minimum payments. When you can’t make payments, consolidate, and keep charging. Get a second job to pay the bills. Worry about money. Wonder why there are never any money around at the end of the month to make ends meet. Get a payday loan. Think about bankruptcy. Everybody deserves a fresh start, right. Oh yeah, and forget about the sunscreen, you will spend the rest of your life working.

Visit website at: http://earlyretirementextreme.com/dont-wear-sunscreen.html

Urgent: Mortgage Debt Forgiveness ends 12/31/12

Too many people are feeling quite a squeeze on their finances with job loss or pay reductions, divorce and other factors that affect their income. Some of the worst things I see are people attempting to do the right thing, and subsequently deplete their savings accounts and 401k Plans to pay their mortgage, max out their credit cards with normal expenses like groceries and gas, all to avoid losing their home – only to come to the result in the end anyway and now with nothing left behind them.

One major factor that made this situation astronomically worse is the fact that any debt that is forgiven (mortgage debt included) must be reported on a 1099 and claimed as taxable income. Because there were so many Americans in this situation and it was adding such a great amount of insult to injury, the IRS passed temporary legislation called “The Mortgage Debt Forgiveness act of 2007″. This allows for any mortgage debt related to the purchase of your primary residence to be exempt from this taxable income requirement. The issue with this now is that this act will be expiring December 31, 2012.

What this really means is that you should absolutely be evaluating if it more advantageous to you to short sell your house now so that you can take advantage of this temporary legislation. I discussed in another article about if you should consider renting the property until the market gets better, but in reality, you are most likely to end up selling long before the market improves enough to make any difference for you at all, and then at that time, you will no longer have the benefit of this exemption of taxable income for 2 reasons. The property will no longer qualify as your primary residence and the deadline will have expired.

Make no mistake….this should not be taken lightly. Often times the debt I see forgiven on mortgages ranges from $80k to often times several hundred thousands of dollars. Imagine having to pay tax on that at your taxable rate of 32% or whatever). And this is money you have certainly NOT seen in your bank account!! Do not confuse this with capital gains or losses…this will be straight taxable income on the sale as if it were on your W-2 without ANY withholding!!!

In considering this strategy, make sure to take into consideration the time it takes to sell a property in this market as well as the time it takes to work the short sale. Start early to make sure you have plenty of time to complete everything well prior to the end of the year.

Larry Winget’s 12 Ways to Go From Getting By to Getting Ahead

Yesterday, it was over 106 degrees in town, even with AC on the house was warm, so we decided to head over to a “Cool Zone” Border Bookstore in Redlands, California. While There I found a book by  Larry Winget called:  You’re Broke Because You Want to Be.

I found this on page 200, I wanted to share with you:

12 Ways to Go From Getting By to Getting Ahead

1. Know where you are. This is THE BEST place to start. Like Larry says in his book, most people don’t know how much they owe nor do they know how much they make. You gotta figure this out if you really want to make changes.

2. Take responsibility for the situation. Although it may be easy to play the victim of your circumstances, it won’t get you anywhere. Accepting responsibility for your situation is actually liberating.

3. Feel bad about it. Experience remorse. I’m of the opinion that if you don’t feel remorse, you’ll simply do it again. It’s kind of like when I get after my kids for doing something wrong. If they show no remorse, I’m almost certain I’ll be getting after them for the same thing in the future.

4. Make the decision for things to be different. I have nothing to add to this.

5. Know exactly what you want your life to look like. As Larry suggests in his book, write down exactly what you want your life to be like. How much do you want to make? Where do you want to live? How much do you want in your retirement account? Write it all down and memorize it.

6. Create an action plan to get there. If you’re currently earning $30,000 per year but you’d like to be making $100,000 per year, you’re gonna have to make up a plan to get you there. Do you need to go to college? Do you need to network with others in order to get where you need to go? Figure it out and make a plan.

7. Know what you are willing to give up to get what you want. If you have to make changes, you’re gonna have to give up something to make those changes. If you don’t, you’ll still be in the same position one year, five years, and ten years from now.

8. Spend less than you earn. DUH! You’ll never be able to outspend yourself to prosperity!

9. Figure out ways to earn more. Take a second job? Start a blog? There’s lots of different ways to earn more money.

10. Stop all unnecessary spending. This goes hand-in-hand with number 7. If you’re spending $500 more per month than you make, you’re gonna have to cut $500 (or more) from your spending. Make a list of all your bills and outgoing expenses and prioritize. If it’s not absolutely important, cut it out for now.

I am looking forward to this and seeing where we can cut back, especially the cell phone and Cable. Huge waste of money!

11. Pay off debts as quickly as possible and only go into debt for things with long-term value. You’ll be amazed at how much more you can do when you have no credit card debt. A reasonable house note is an example of acceptable debt. Notice I said REASONABLE HOUSE NOTE!

12. Build a cushion. Save! An emergency fund is absolutely critical to long-term financial success. Why? Because emergencies are ALWAYS going to pop up. Being able to pay for them without piling on more debt will give you the warm fuzzies. Trust me!

I like this list.

Larry goes into detail for each of those twelve points in his book.

Alert: Will Banks requiring 7 day notice to make withdrawals?

My job is to stay in touch what is happening out in the credit and financial world, I recently sent the article by close friend, and found it quite interesting. I think it’s good think to keep an eye on or at least beware…

Your friend,
Carlos Samaniego

Article from http://www.preparednesspro.com

Given my heightened awareness in the last couple of years regarding a financial collapse in the U.S. (and subsequently the world) I took sharp notice of this article that I came across today.

Citigroup has notified all of its account holders that as of April 1, 2010 that they will require 7 days notice of any withdrawals from checking accounts!  I suspect that this will not be the only instance and that other banks will follow. Also, expect slower payments on debit and check transactions.

Mind you Citigroup claims that they have no intention of enforcing this new policy, but that they were required by federal law to disclose it.  Yeah, right. Sorry, not buying that. I see it as a blatant defensive move.  As such I strongly encourage people to put a high priority on getting their bills paid three months in advance, and having $500 in small bills handy.

The article is here: http://www.prisonplanet.com/citigroup-warns-customers-it-may-refuse-to-allow-withdrawals.html

Dave Ramsey

This is power message by Dave Ramsey, who is one of my mentors I been following for last few years!