Will 2008 Be A Good Time To Buy Real Estate?

For me, the answer is "it depends." If I were previously considering buying real estate, e.g. a personal residence or a rental property, the answer for me would be "yes." If I wasn't in the market, the answer is "no."

Since we already own a home, don't need a vacation home, and am not financially able to consider investment property, our answer is "no." Just because something goes on sale doesn't mean I should buy it to save money:-) However, here are situations in which I would consider this year a great time to buy a home:

1. Bargains: The sunny side of the real estate slump by Judi Hasson at MSN Real Estate shares some yes situations I would consider if I were in that situation:


2. Renters - When mortgage, taxes and insurance are less then current rent. In the article, a renter reduced her monthly "rent" payment by $200 a month. This is a great deal if one can avoid moving for a few years.


3. Craftsmen - If one has skills to rehab, can get a great price, and live in it while doing the work. Being able to do it oneself and live it in provides a good margin of safety.


4. Investors - An experienced and successful real estate investor and have cash available. Having one's cost of goods decline is a great way to increase profits.


5. Playing the Housing Slump - Time to Make Your Move? by Jonathan Clements in The Wall Street Journal offers another situation I would consider, i.e. helping one's children buy their first home.



6. Finally, The Brighter Side of Housing by James R. Hagerty of The Wall Street Journal shares how people previously priced out of the housing market are now able to purchase homes that were previously "unaffordable."

While it's tempting, I am not looking at the housing crisis as an opportunity to become a real estate investor, landlord or vacation home owner. At this time, I don't have the experience, time, or available money to do any of the three.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial or real estate advice. Please consult a professional advisor.

Compost and Mulch At A Big Discount

My wife found a great deal on bulk compost and mulch from our local waste management company, which recycles yard waste for our county. They charge $10 per cubic yard, with a minimum charge of $25. This is the cost for pick up at their location, and which includes loading. My pickup truck holds about 2 cubic yards and two truckload just about cover all the tree and flower beds in our yard. This compares to the 75 to 100 bags of mulch that I buy for about $4 each.

We decided to use to compost this year to mulch our planter beds and trees. We were very satisfied with the quality of the compost, and will likely make the trip again in the fall. The only downside is the facility location is 10 miles farther than our local garden store. However, based on the savings and the quality, I think it's worth the trip.

Finally, to note, the compost and mulch sales was not advertised. Also, relevant websites did not provide enough details and it took several phone calls to the county municipal waste office, a civic garden club, and the local waste management company to get the information. However, once I did find the right contact, the service has been excellent.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

Photo Credit: morgueFile.com, Mary K. Baird

This is not financial or gardening advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC

4/28/08 Stock Purchase Update - Maintaining Gains

With the market decline of early 2008, these stock purchase updates have not been as fun to write. However, I am going to remain disciplined and do a weekly update until I sell the positions from the portfolios. The original portfolio was based on a 10/15/07 updated buy list of Potash (POT), Southern Copper (PCU), CNH Global (CNH) and BHP Billiton (BHP) and a January, 2008 stock pick update of Apple (AAPL), Research in Motion (RIMM), Intuitive Surgical (ISRG), Priceline (PCLN), Core Labs (CLB), and Google (GOOG).

The overall portfolio gained 0.6% last week and now has total return of 17.8%, with the remaining holdings all being slightly positive. I was able to sell Apple as it continued to rally above my purchase price. Here's the current status of the stocks in the portfolio:

	My Wealth Builder 10/15/07 Buy List
Stock [purchase date]	Shares	Purchase Price	Current Price 4/25/08
Potash (POT) [6/7/07]	50	$71.59	$204.67
Southern Copper* (PCU) [11/13/07]	40	$108.24	sold 2/19/08 @ 109.05
CNH Global NV** (CNH) [11/13/07]	50	$55.22	sold 4/07/08 @ 56.87
BHP Billiton*** (BHP) [11/27/07]	50	$71.54	sold 2/19/08 @ $73.98

*On 1/18/2008, the system gave a sell signal for PCU.
**On 2/1/2008, the system gave a sell signal for CNH.
***On 2/15/2008, the system gave a sell signal for BHP.

	My Wealth Builder January, 2008 Buy List
Stock [purchase date]	Shares	Purchase Price	Current Price 4/25/08
Apple** (AAPL) [1/17/08]	25	$160.93	sold 4/25/08 @ $169.06
Research in Motion (RIMM) [1/17/08]	25	$88.71	sold 2/22/08 @ 103.23
Intuitive Surgical (ISRG) [1/18/08]	20	$261.81	$288.50
Priceline (PCLN) [1/18/08]	25	$92.33	$129.43
Core Labs* (CLB) [1/25/08]	25	$116.25	sold 2/19/08 @ $121.67
Google** (GOOG) [1/25/08]	20	$582.66	$544.06
Google** (GOOG) [2/1/08]	10	$521.27	$544.60
Google** (GOOG) [2/26/08]	10	$457.44	$544.06

*On 2/8/2008, the system gave a sell signal for CLB.
** On 3/7/2008, the system gave a sell signal for AAPL and GOOG. I currently plan to hold GOOG since it is part of my core holdings. However, if GOOG rallies into the low 700s, I will sell an equivalent number of shares purchased earlier at a lower cost, and effectively close out these positions.

The market appears to have risen significantly from the near term bottom. As of the close on 4/25/08, the Dow, Nasdaq and S&P 500 indices were respectively down 2.10%, 8.65%, and 4.21% year to date, still up from lows of 9.37%, 16.58% and 11.86% in my 3/17/08 Stock Purchase Update.

I continue to believe that the probability of a recession in 2008 is relatively high, if we are not already in one. The multitude of negative factors will eventually outweigh any actions by the government and financial institutions. Originally, the Fed interest rate cuts and other actions led me to expect that the bull market would last through summer, 2008. However, the economic data in early 2008 has caused the bull market to end earlier. For either case, I expect the market to continue to be choppy in 2008 with many short term rallies and declines. For now, I do not plan to add any more to the amounts that I have already invested in the above tables and may take some profits on long term gains at a 0% tax rate on Potash and Google when possible.

Full disclosure: I own all the stocks mentioned in this post that are not indicated as sold.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC

Not Enough Time To Do Everything

"Time is what we want most, but what we use worst." - William Penn

I confess, I stopped using a calendar to schedule my life when I retired in my forties last year. I wanted freedom from a schedule. The upside has been having the flexibility to do fun activities with family and friends at a moments notice. However, the downside has been a reduction in project completion. For example, I have only done 50% of the fall/winter maintenance projects that I had planned.

At this point, it's not clear to me whether my loss of time is due to: 1) Too many projects; 2) Inefficiencies in doing each project; 3) Sleeping 8-9 hours instead of 5 hours; or 4) Too many fun distractions. In any case, I think I need to begin using a slightly more rigorous project planning and calendar system. However, since I am retired, I will try to firmly schedule no more that 4 hours per day. I'd still like the majority of my time to be "free." I try this for a month and see if it is a reasonable compromise.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC

An Elegant Solution For Those Wanting Higher Tax Rates

A liberal is a person whose interests aren't at stake, at the moment. ~ Willis Player

Republican John Campbell has introduced the "Put Your Money Where Your Mouth Is Act" that would amend the tax code to allow for "contributions" above one's normal tax liability. In the future, Warren Buffett won't have to wait for his proposed higher tax rates, to pay more taxes. He can voluntarily do it.

For perspective, the Treasury already accepts voluntary donations to reduce the national debt. and $2.6 million was received last year. Perhaps, if wealthy liberals voluntarily increase their donations, tax rates won't need to be increased :-)

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or tax advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC

Retiring Early - How I Might Do It Differently :-)

Since retiring in my forties in 2007, I've been getting a lot of surprised looks when I tell people I've retired. The comments range from "You're too young" to "Really, what are you doing next?" If I could retire early again, here's what I would do differently:

1. Win the Mega Millions or Powerball lottery. No one is ever surprised when a big lottery winner "retires." It seems winning a lot of money entitles one to retire, but saving a lot doesn't :-) The trouble is that counting on winning the lottery is A Very, Very Bad Retirement Plan.



2. Dye my hair gray. To many people, gray is old, not gray is not old. My father didn't start becoming noticeably gray until his seventies. I guess I'll have to wait that long before people think I am old enough to retire.



3. Have a passionate interest or dream job to do right away. A colleague who also retired early is doing a cross country (i.e. Pacific to Atlantic) bike trip with his wife. Upon retiring the first time, my father-in-law consulted for a small company and then took over as president, retired again and became a professor at a local university. My sister started a business. Others I know did more volunteer work or mentoring. I don't have anything exciting to report. I'm just living more or less the same life, without the work part :-)

Seriously though, retiring early was a great opportunity for me and I'd do it again, even without winning the lottery, graying early or having a dream activity or interest to do.

For more on Reaping the Rewards , check back every Friday for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC

When Was Life Harder - Then or Now?

Older generations like to say that they had it tougher than the current generation. Many have heard the story of the elder who walked "ten miles to school, barefoot, in the snow and uphill both ways." Of course, this statement shows the exaggeration that can happen when talking about the past:-)

For example, my high school football coach routinely told us how we weren't as tough as his undefeated teams from a previous generation. To note, our team was in transition (2-7-1) in our coach's first year and would soon become pretty good. We would be 7-2-1 the following year and make the state finals in the two succeeding years, winning in our second attempt. One day, while we were practicing offensive plays, the coach told us that his teams used to put their hands behind their backs and fall on their face masks for a warm up drill. One of our lineman named H----- said, "That isn't so tough." The coach replied, " H-----, that isn't something you would do," and proceeded to show us the play again. Suddenly, we heard a thud. H----- had put his hands behind his back and fallen on his face mask. The coach looked at him with amazement and exclaimed, "That's the first time I've ever seen anybody do that." H----- had outbluffed our coach. The players all had a great laugh that day.

Where does truth lie? For me, the answer is it depends on which aspect of life one considers.

I think the older generations, generally, had harder physical challenges. When I was a child, our family did all of our daily tasks ourselves, e.g. child care, cleaning house, yard work, and cooking. In many cases, there were fewer appliances and services to help do the work. We didn't have microwaves, computers or cable TV we now take for granted. In other cases, we didn't have the financial means. For example, for many years, we were a one car family and only had one black and white TV.

While shielded from many of the physical hardships, the current generation lives in a world that is much more complex and competitive, making life more challenging than for previous generations. When I played football, few of starters did weight training and we played other sports in the off season. Today, young athletes often work out year round, attend sports camps, and play on select teams to make the cut on their school teams. While doing well in school was important, the top students tended to take advanced courses based on interest, even if AP courses only gave a 4.0 for an A. Today, it seems that top students manage their high school curriculum to improve chances for admission to college. Finally, when I graduated, most college degrees enabled one to get a good job, and people could stay at one company for their entire career.

While I can't predict the future exactly, I know my three year old will face an even faster changing and more complex environment than today, requiring her to make different choices and decisions. Our challenge, as parents, will be to provide her an education that prepares her find the opportunities no matter what future is.

For more on Crossing Generations, check back every Saturday for a new segment.

This is not financial or parenting advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC

How I Could Have Made Almost $30,000 In One Day And Why I Didn't Do It

Last week's rally by Google showed how option buyers could make a lot of money on big move by a stock. On Friday, April 18, 2008, Google rose nearly 90 points on the strength of the earnings results provided on Thursday after the market close. For those who owned Google, this was great since the stock was down 35% year to date. However, one could have made significantly more by owning Google options that expired on April 18, 2008.

On Thursday April 17, 2008, Google closed at 449.54 the April 510 calls closed at $0.60. One day later, Google closed at 539.41 and the same options last traded at $29.90, for a net gain of 4883%. In other words, $600 used to purchase 10 calls on April 17 would have been worth about $29,900 on April 18, excluding commissions.

Knowing what I know now, paying $600 to make almost $29,900 appears to have been a "reasonable investment." While I briefly thought about buying a few out of the money call options, here's why I didn't do it:

The investment required a significant gain in only one day. It clearly depended on whether Google had great results and it required at least a 60 point gain in order to be in the money. These were two big "ifs." Even for Google, 60 points was a very big gain. 90 points was the largest advance ever by Google. For perspective, I thought Google might advance 20-30 points on good results.

Typically, out of the money options with one day to expiration become worthless. The 510s were far out of the money, by over 50 points. Buying such a option would be a long shot gamble, with a high probability of loss. On Thursday, I didn't think there was much chance Google would reach 500 on Friday.

My track record of predicting daily fluctuations is not that good. If it was, I'd be day trading and I'm not. While I was hoping Google would meet expectations, I thought there was a reasonable chance of miss. Over the long term, I would likely have more misses than big returns like Google.

To demonstrate my ability, or rather inability, to predict daily stock price, I'll do an evaluation of options for Apple and Amazon, which both report after the close today. Since I expect Amazon to beat estimates and Apple to meet expectations, I would consider the Amazon May 90 call for $2.04 and the Apple May 195 call for $1.90. At 11:00 AM today, Amazon and Apple are at $80.70 and $163.20, respectively. With this information, I will hypothetically buy one Amazon May 90 call. I will not buy the Apple May 195 call since the stock has not made a 32 point move during a month in the past.

I'll report back after the close on how well my hypothetical position performs.

Disclosure: I own shares of Amazon and Apple. I do not own any options for these stocks.

4:40 PM Update : Amazon closed at $81.00 and the May 90 call closed at $2.24. However, after Amazon announced earnings that beat expectations, the stock began to drop, reaching $77.49 at 4:40 PM. Apple closed at $162.89 and the May 195 call closed at $1.45. Apple's earnings also beat the street estimates, but the stock dropped after hours, to $161.50 at 4:40 PM. It's good that I didn't buy either of the call options :-)

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial of investment advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC

Great Jobs for The Class of 2008

In about a week, the class of 2012 will be deciding which college to attend. As to thinking about a future major, they may want to read Top 10 Jobs for the Class of 2008, at MSN Careers by Nathan Lippe. The top job categories, group by career area, were:

Financial - Financial Analyst (1), Accountant (4), and Financial Manager (7)

IT - System Analyst (2) and System Software Engineer (3)

Engineering - Civil (5), Chemical (8), Electrical (9), and Mechanical (10)

Marketing - Marketing Manager (6)

The median salary ranges were between $55,600 and $98,700 and growth for these jobs was in the 4 to 34 percent range. When considering an area of study, it's probably worth reviewing the majors cited in the article that can help one be considered for these jobs.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial or career advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC

4/21/08 Stock Purchase Update - Big Gains From Google and Potash

With the market decline of early 2008, these stock purchase updates have not been as fun to write. However, I am going to remain disciplined and do a weekly update until I sell the positions from the portfolios. The original portfolio was based on a 10/15/07 updated buy list of Potash (POT), Southern Copper (PCU), CNH Global (CNH) and BHP Billiton (BHP) and a January, 2008 stock pick update of Apple (AAPL), Research in Motion (RIMM), Intuitive Surgical (ISRG), Priceline (PCLN), Core Labs (CLB), and Google (GOOG).

The overall portfolio gained 8.2% last week and now has total return of 17.2%, due primarily to the strength of Google's rally. Potash, Apple and Priceline also advanced significantly. The only decline was Intuitive Surgical which dropped about 45 points due to disappointing forward guidance, even though this quarter's results beat expectations. I was correct when I wrote last week that the portfolio return would depend highly on Google, which rose almost 90 points last week. Here's the current status of the stocks in the portfolio:

	My Wealth Builder 10/15/07 Buy List
Stock [purchase date]	Shares	Purchase Price	Current Price 4/18/08
Potash (POT) [6/7/07]	50	$71.59	$204.67
Southern Copper* (PCU) [11/13/07]	40	$108.24	sold 2/19/08 @ 109.05
CNH Global NV** (CNH) [11/13/07]	50	$55.22	sold 4/07/08 @ 56.87
BHP Billiton*** (BHP) [11/27/07]	50	$71.54	sold 2/19/08 @ $73.98

*On 1/18/2008, the system gave a sell signal for PCU.
**On 2/1/2008, the system gave a sell signal for CNH.
***On 2/15/2008, the system gave a sell signal for BHP.

	My Wealth Builder January, 2008 Buy List
Stock [purchase date]	Shares	Purchase Price	Current Price 4/18/08
Apple** (AAPL) [1/17/08]	25	$160.93	$161.04
Research in Motion (RIMM) [1/17/08]	25	$88.71	sold 2/22/08 @ 103.23
Intuitive Surgical (ISRG) [1/18/08]	20	$261.81	$288.50
Priceline (PCLN) [1/18/08]	25	$92.33	$129.43
Core Labs* (CLB) [1/25/08]	25	$116.25	sold 2/19/08 @ $121.67
Google** (GOOG) [1/25/08]	20	$582.66	$539.41
Google** (GOOG) [2/1/08]	10	$521.27	$539.41
Google** (GOOG) [2/26/08]	10	$457.44	$539.41

*On 2/8/2008, the system gave a sell signal for CLB.
** On 3/7/2008, the system gave a sell signal for AAPL and GOOG. I will try to sell AAPL in an upcoming rally. I currently plan to hold GOOG since it is part of my core holdings. However, if GOOG rallies into the low 700s, I will sell an equivalent number of shares purchased earlier at a lower cost, and effectively close out these positions.

The market appears to have risen significantly from the near term bottom. As of the close on 4/18/08, the Dow, Nasdaq and S&P 500 indices were respectively down 2.42%, 9.40%, and 5.51% year to date, still up from lows of 9.37%, 16.58% and 11.86% in my 3/17/08 Stock Purchase Update.

I continue to believe that the probability of a recession in 2008 is relatively high, if we are not already in one. The multitude of negative factors will eventually outweigh any actions by the government and financial institutions. Originally, the Fed interest rate cuts and other actions led me to expect that the bull market would last through summer, 2008. However, the economic data in early 2008 has caused the bull market to end earlier. For either case, I expect the market to continue to be choppy in 2008 with many short term rallies and declines. At this time, I plan to sell AAPL into this rally and continue to hold the balance of the portfolio. For now, I do not plan to add any more to the amounts that I have already invested in the above tables.

Full disclosure: I own all the stocks mentioned in this post that are not indicated as sold.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC