Is Inflation A Good or Bad Thing, And Other Lies and/ or Distortions?

Economics, economic theories, and political realities often cross paths, and make many people wonder what's going on. We have offered heard about the dangers of inflation, the dangers of recession, and other similar terminology, yet most of us will hear the media, and especially the business media, one day warn of the risk of inflation, and another day cite the lower than anticipated inflation rate as something to be concerned about. There are even different sets of indexes, one that includes core items (whatever that really means) and another that measures the inflation rate including energy costs.
The only thing that most American consumers concern themselves about from day to day, is how these costs impact them. Is their cost of living going up, staying the same, or going down. I have not met anyone recently that has told me that he feels that things are costing him less. At the supermarket, manufacturers continuing their clever "game" of effectively raising prices by keeping prices the same but reducing the package size. Shouldn't pricing be considered for these cost of living indexes the way the unit pricing is required by a lot of states, that is, by showing the cost per ounce, or per serving? Most of us have observed increased costs in milk, most meats, fowl, fish, cans of soda, bottles of soda, etc. Yet, we are being told that there is no or little inflation.
Gas prices are constantly fluctuating, yet the pattern is that prices go up. About the only thing that has not kept pace with these increases is average wages. Many workers are being paid for fewer hours, while others have been laid off. The unemployment rate statistically is about 9.5%, but realistically is more than 15%. Many Americans are either under-employed or unemployed, and this has been going on for so long, that, for many, unemployment benefits are expiring. If these people's benefits run out, the statistics will show a lower unemployment rate, because the official statistics does not count people not collecting benefits. It also does not count individuals who owned small businesses, that had to go out of business, because owners of these types of businesses are generally not eligible for unemployment.

The bottom line is that statistics are misleading. There is an old saying that the difference between a recession and a depression is, that it's a recession when it happens to someone else, and a depression when it happens to you. It is time for the American public to demand that our government officials stop partisan politics, and realistically address the economy and the joblessness issues, making those the overwhelming top priorities.

Understanding Mortgages

When someone purchases a home, one of the most confusing and frightening aspects of the experience is getting a mortgage. There are so many different types, and so much confusing terminology.

There are 2 types of mortgages that most home buyers acquire: fixed rate; and variable rate. Historically, variable rate mortgages begin with a lower rate, and that rate is adjusted periodically, pegged to some economic index, such as Treasury bonds, etc., while fixed rate mortgages maintain the same rate throughout the term of the mortgage. However, in periods of very low interest rates, such as have existed for the last several years, there is very little rate difference between fixed and variable mortgages.
You may have read about the rate of a mortgage with points, or without. A point is an amount that one pays to lower the rate during the rest of the term of the mortgage. It is a "trade off" of paying more upfront to pay less on a monthly basis. One point equals 1% of the amount of the mortgage, so paying 1 point on a $300,000 mortgage would mean paying $3,000 up front to receive a lower monthly rate. In order to see if paying the "points" is beneficial, one must calculate the amount of savings per month, how much it would save over the term of the mortgage, and the opportunity value of the dollar amounts of the points. It is also important to understand that it might be necessary to pay "points" in order to bring the monthly carrying charge down, in order to qualify for the percentage qualifications that lending institutions use as a factor in determining qualification for the mortgage.
Mortgages also come in a variety of lengths. Most common fixed rate mortgages are: 15 year; 20 year; 25 year; 30 year; and 40 year. The shorter the term, usually the lower the rate paid, but since there is also a shorter repayment period, the monthly carrying charge may be significantly higher. Obviously, the shorter the term, the lower the total amount of payments. Not all individuals will be eligible for some of the shorter terms, because the higher monthly carrying charge would require a higher income for approval. If someone wants to pay off a mortgage in a shorter period of time, most mortgages today have no pre-payment penalty (Years ago, many more did). Adding a small amount to one's monthly payment voluntarily will reduce the term (number of years needed to repay) of the mortgage significantly. Following this approach, also has the advantage that the "required" monthly payment is lower than in the shorter term mortgages.

If one wishes to qualify for a mortgage, it is very important to make sure that one has a fairly pristine credit report, and a relatively high credit scores. In today's economic climate, most lending institutions will normally exclude anyone whose credit score (e.g. FICO) is not around 700, or higher. Before applying for a mortgage, one should request a free copy of their credit report, and if there are any inaccuracies, fix them. If there are any potential problems, it is essential to "fix" your credit before going for a mortgage. Lending institutions today are far more careful and cautious than they have been in the past.

5 Common Mistakes Made By Home Sellers

One of the most difficult things for many people is coming to terms with selling their home. Many have gotten emotionally attached over the years, and rather than looking at the home from a standpoint of how a potential buyer might view their home, they look at many aspects unrealistically. This often causes them to begin the entire process from a perspective that hurts themselves, and between this emotional attachment, greed and unrealistic desires, many homeowners put their homes on the market for more than they should, and thus inhibit the number of individuals who might offer to actually buy the house. That being said, the next five items often adversely impact the ability to optimally sell ones home, and are usually things that can, and should be easily addressed. As a Licensed Salesperson in New York State, I always advise my clients to pay attention to these easily addressed areas.

1. Avoid large displays of personal items and possessions. These include, but are not limited to: overwhelming amounts of family pictures, trophies, etc; excessive religious decor; lots of lawn decorations/ ornaments; or children's toys strewn about. Homeowners should either store these out of sight, or even temporarily take out a storage unit. They should also place excessive furniture and furnishings in this unit, so the house does not look cluttered, and excessive furniture also often makes rooms look far smaller than they actually are.
2. If your house is an unusual color or shade, many potential home buyers might be turned off. It is far better to have a neutral, but attractive color to put your house in the best perspective.
3. Clear out your garage, at least sufficiently to put your car in their during home showings, as well as when pictures are taken. Remember that a seller wants to make the buyer feel as comfortable as possible, and first impressions are most important. At the same time, unclutter the driveway and front lawn area, for precisely the same reason.
4. The first impression a potential buyer gets when he sees the house is most important. Address any potential distractions, or eyesores. These include peeling paint, broken shutters, dirty appearance, awnings or shingles that need repair,broken sidewalks or driveways, unpainted railings, rusty areas, etc. Take a look from the front of your house from every angle, and address any areas that may be turn- offs.
5. Don't neglect lawns, gardens, etc. Make sure the lawn is trimmed, mowed and seeded for maximum positive impact. If the weather permits, make sure there are some colorful and attractive plants, and make sure all areas are weeded, clean, and welcoming.

These are all relatively easy areas to address. Homeowners often cost themselves time, opportunities, and substantial dollars because they overlook these items. I recommend that a home seller discuss these types of things with his real estate professional, and heed the advice given.

Is This A Good Time To Buy A Home?

As a New York State Licensed Salesperson in real estate, I am often asked by individuals considering purchasing a home, whether or not this is the right time (or at least a good time) to buy a home. While there is no simple answer to that question, the answer is to a large degree dependent upon individual circumstances, including needs, employment, credit rating, etc.

1. As we all know, the United States (as well as almost all the rest of the world) has been undergoing a prolonged period of economic distress that has not been this widely witnessed for eighty years. In many parts of the country, house values have plummeted, while in others there has merely been a large reduction in market value. While most areas have seen a resurgence in value, some of the country is still in a period of stagnant, inconsistent pricing. With these lower (or stable) prices for houses, combined with record low mortgage interest rates, a home buyer will have a significantly lower month carrying charge than in the recent past. In fact, some areas are seeing the lowest home prices in a decade! However, today's real estate market is also different for buyers in the sense that most lending institutions are being far more strict about down payments (most requiring 20%), and are requiring significantly higher credit scores to qualify for a mortgage. In addition, house appraisers are far more conservative in stating values, which means that the 80% that the bank is willing to loan is based on a lower home price, and thus, could, under certain circumstances, require an even larger down payment by the buyer. However, if all these conditions are met, the buyer is operating in a Buyers Market (more sellers than qualified buyers), and thus is in a fairly good negotiating situation.
2. Does the buyer have a home he is selling at the same time? If he does, it might take longer for his house to sell, and he will receive a lower amount for his house than he would have a few years ago, in some scenarios. However, in most cases, the trade- off of also buying another home for less money combined with the low mortgage interest rates will generally be advantageous to the individual.
3. Many potential buyers today are wary because of the market, and their fear of their own job security, or income consistency. Most potential buyers are acting more cautiously, and some are only making offers that even determined sellers are finding insulting because there is a "want to get it at a steal" mentality. When determined sellers and qualified buyers both look realistically at the market place, and don't take a what was type of attitude, buyers are often doing quite well.
4. Is the potential buyer looking at this purchase from a long- term or near- term basis? While nobody can know for sure how long any downturn will continue, it is always best to look at home ownership from a longer - term, need - oriented perspective, rather than merely instant gratification. Some individuals who purchased homes three to five years ago have seen their houses values drop, but others who have lived in their homes for much longer still have tremendous equity in their homes. Most experts still believe that houses are good long- term assets, because they historically have out- performed the inflation rate. For those looking short term, there is always more risk!
5. When the real estate sales market has slowed, in most areas, the rental market has seen higher occupancy rates. With the lower home prices and mortgage rates, combined with the fact that personal real estate is still one of our few substantial tax deductions (the interest and real estate taxes are deductible), in many circumstances, it is actually more economical to buy than to rent. However, like everything else in real estate and in this economy, this varies dependent on area of country and the individual's circumstances.

Is it time to buy a home? It all depends on your qualifications, credit, personal circumstances, needs, and your objective, but for many qualified people, this is a great buying opportunity!

Negotiations- An Art and a Science - How Cooperation Gets It Done?

Although nearly everything in life is negotiable, few people either understand the nuances of the art and science of negotiating, or adequately prepare themselves for negotiations. However, in one of life's ironies, it appears that negotiating is often considered easy and many people believe that anyone can negotiate. There are many simple and basic examples from everyday life that clearly demonstrate the need to be a better negotiator, from the car buying and home buying processes, to wage negotiations, etc. While these circumstances certainly put some individuals at a competitive disadvantage, the results are generally personal, and thus not that impacting on larger groups or society. When organizations are in negotiating situations, how well they handle these circumstances often dictates their eventual success or failure. Whether the negotiations relate to a group's needs, or how a real estate professional will perform the process, there is perhaps no single skill that is more relevant to our final results, and the relevance of our efforts.

In my more than thirty years as a professional negotiator, I have learned how essential negotiations are. Many inexperienced negotiators falsely believe that negotiations is a contest, where one party needs to best the other. In fact, the best possible scenario is invariably when the negotiations end up being win- win (meaning both sides are content with the result). In many cases, the victories are far more subtle, and while one side gets what it wants and feels it needs, the other side is also satisfied.

1. One of the best examples comes from the event planning world, where an event/ conference organizer is dealing with a hotel. In order to get the best result, the organizer must first do his homework, and understand the needs of the hotel, and what it seeks and needs. Some inexperienced negotiators push too hard for certain concessions that may be harmful to the hotel. What invariably occurs is either the hotel terminates the discussions, resolutely refuses, or in a weakened state, agrees because they desperately need the business. When the last scenario occurs, the hotel will often adopt an inflexible attitude after the contract is signed, and thus the group generally loses in other areas. When there are open and honest discussions, and the group explains its budget, what it needs, etc., and permits the hotel to suggest alternatives (for example, serving in specific rooms, tweaking menus, piggybacking other groups menus to create economies of scale for the hotel, etc.), the optimum resolution to the negotiations often results. For this to occur, however, the group's negotiator must be totally prepared and know the group's needs in advance, such as audio- visual requirements, special dietary needs, guest room needs, etc. When the two negotiators build their relationship based on mutual trust and respect, negotiations have the best chance of being resolved to both sides satisfaction.

2. Many groups falsely believe that they save monies by doing their own negotiating rather than hiring a professional negotiator. While occasionally that is the case (for example, if the group happens to have in- house a qualified and experienced negotiator), in most cases, a professional negotiator will attain results which will end up best serving the group's needs. One caveat, however, is that the group or organization must carefully interview the professional negotiator, and clearly make sure he understands the needs and the group's philosophy. Like in most consulting situations, many claim to be experts, but few can and do actually deliver. For example, in my years of negotiating professionally, I have found that I will generally save a group at least 30%, which is often the difference between the event being a rousing success or a dismal failure.
Negotiations are essential, and the most groups that utilize proficient, skilled and expert negotiators generally save time, money, aggravation, as well as ending up with a far better overall situation.

3. In real estate, there is always some degree of negotiation. Those real estate professionals that learn what both sides needs (his client and the other side/ party) propel the process forward in a win - win manner.

The Basics of Giving A Quality Presentation

Although many of us are called up frequently to give some sort of public presentation, a large percentage of individuals become nervous, queezy and uneasy when this occurs, often feeling considerably out of their comfort zone. Unfortunately, this form of oral communications has often been largely either ignored or paid little attention to, and because of that, many presentations and presenters present an atmosphere of discomfort, boredom, and somewhat of a feeling of "why did I bother attending this," amongst attendees. Like most acquired skills, learning to, and actually giving a quality presentation requires dedication, commitment and an understanding of the process and the requirements/ needs.

1. You'll rarely give a consistently quality presentation until, and unless, you thoroughly are prepared. This presentation means determining the goal of the presentation (i.e. what you want the attendees to walk away with), whether or not there is a need for accompanying visuals, doing your research and homework, understanding the group and its dynamics, etc.
2. Once you've formulated your information and materials, practice your presentation, and rehearse. This rehearsal should enhance your comfort zone, and anticipate questions and concerns that might be asked by the attendees.
3. Just like actors rehearsing for a new show, an effective rehearsal is never a one - shot event. The procedure must be repeated until your level of comfort with, and knowledge of, the materials, is nearly second - nature, and automatic.
4. Review your content in detail. Are you providing too little, too much, or just the right amount of information? Is the group that is attending prepared for the information you are giving? Will they welcome, or close their minds to new information, ideas and alternatives?
5. Are you comfortable going in front of a group? Are you so uncomfortable that your nervousness will create an impediment to a quality presentation? Rehearse in front of a mirror, look at your body language, continuously change the inflection and tone quality of your voice, and remember to speak more slowly than you feel you need to (because invariably nervous speakers rush). One's confidence is an essential of a quality performance!
6. Finally, consider your delivery, your performance, and whether or not you are engaging the group in an interactive manner. When one gets the audience more involved, it enhances the bond and thus the attention that the crowd will give you.

There is no one - step, easy procedure for enhancing your presentation skills. However, paying attention and being consistent, and thus using these basic six steps, helps to put you in the best scenario.

Basics of Meaningful Budgeting

Nearly every organization, whether it be public, non - profit, or related to a for - profit group or scenario, has some sort of budget process. Unfortunately, far too often, the attitude towards the significance and relevance of the budget process is often a diminishment of the need for this process. Meaningful budgeting must always begin with an attitude of understanding and appreciating the reasons and needs for the process. When done correctly, it enhances one's ability to do a thorough and relevant analysis of needs and priorities, as well as direct a process in the right direction. This should assist in the prioritization process, and make this a step towards functionality, rather than merely an exercise. Once this is understood, many believe that only by using a zero - based budget process, does the document serve the maximum purpose.

1. The vast majority of individuals tend to feel that creating a budget is merely a guide, rather than a directive. Because of this, once they get the budget approved, they often ignore the document, and merely resort to shorter term or crisis management form of leadership. On the other hand, when budgets are used properly, they set the tone, create priorities and direction, and do so in a responsible and effective manner.
2. Effective budgets begin with a commitment to thorough analysis. This permits groups to set goals, create meaningful prioritizes (based both on needs as well as goals and visions), and to effectively plan for the upcoming period. When use properly, budgets are an essential first step in realistic strategic planning.
3. Does your group have needs and priorities, and do they plan to address these in a manner that includes budgeting for them, or do they simply take haphazard steps in a less than meaningful manner?
4. Budgets must be used as a guide to which actions to take, and how to get the maximum bang for the buck. When this is done, organizations have the ability to prioritize providing value to their constituents and other stakeholders.
5. For more than three decades, I have prepared and assisted in preparing numerous budgets, and have become an advocate for the need for using zero - based process. Zero - based means avoiding the tendency of merely extending meaningless budgets year after year. When groups merely look at what they are doing, and just either maintain a line item expenditure or increase things by a specific percentage, groups lose an opportunity to improve and become more efficient and effective. Zero - based means one must justify each non contractural item on a needs, priorities, best ways, and relevant manner. Only when this is done can most organizations plan effectively in a non - crisis manner, and evolve before they must.

Don't consider budgeting to be merely a process or exercise! When that is the approach and attitude, opportunities are squandered, monies and time wasted, and true leadership diminished. Commit to use your budget as your ally.