I Think You all Have The Idea

I can't stress enough how valuable to you it is to buy a home to start your financial freedom.
It may seem like a huge step, or it may be more of a commitment than you were looking for
but the truth is, that if your reading this, there is something out there in your price range, so
go get it.

In the last article I mentioned Hedge fund Investing. This article is going to be based more
on what is known as an "Equity Index universal Life Policy" or E.I.U.L. The basics of
an EIUL is exactly what I have been discussing somewhat in every article, MANAGING YOUR
EQUITY. Let me give you a home equity scenario. Let's say that you are 3 years into a 30 year
fix on your home obviously leaving you 27 years until your home is paid off. Let's say you purchased this home for $300,000. in that 3 years I hate to tell you that you have only paid
down less than $10,000 to you principal balance. Ask how that is possible when your payments
are $2800.00 a month? You thought you have paid close to 75-80K toward your principal balance after all, you have paid over $100K in payments? Not true and this my friend is banking
lesson 101. This simple principal banker's call "Those Who Do Not Understand Interest Are Paying It." Check your "Truth In Lending" statement that your bank gives you every time
you borrow money. There is good news though. "Appreciation," your home gains value as it just sits there and does nothing. So let's say your appreciation is about 6% annually in an average
suburban market. After 3 years your $300,00 home is now worth roughly $360K. Would you
consider an interest only (To keep your payments the Same) cash out refinance. You can roll
that $60,000 into the EIUL and you have just diversified your investment portfolio. The mechanics of the EIUL are simple. It is a type of insurance that provides permanent protection,
has an unbundled premium structure, and has a flexible death benefit. Premium payments can be made according to the schedule in the policy, including "Stop and Go" and lump-sum unscheduled premium deposits. You can get into an EIUL that maintains a "Cash Value" and a tax free "Death Benefit." So why use your home equity? Because the cash value is invested and guaranteed by the insurance companies, of course there are caps and floors on how much they
will earn you but common companies like "New York Life" are paying 9% annually. Now are you
seeing the value? You just gained an extra 3% a year on your equity. Please contact me for more information on the EIUL, how it works and if you qualify for it. Every individual is different and this may not be the best deal for your specific goal. But I guarantee you what ever that goal may
be, I have an alternative income source that will help leverage your equity so your not paying back $730,000 on a $300,000 loan amount. Don't forget every time you pull cash out, you get
a higher tax write off because your loan amount goes up.

Which Home To Purchase

When Purchasing a home there is one major thing that you need to consider immediately.

Are you buying a home strictly for investment or are you looking for a place to love enjoy
and call home. If your looking for an investment please read the next article as this one is
going to be geared more toward a primary residence.

It can be very tempting to buy a new home. The beauty, neighborhood, and warranty
are just a couple reasons to live in a new home community.

With that being said there are many questions that most first time home buyers should ask
there new home builder. Be sure to get the answers to even if the sales agent does not know!

1) Do you provide a soil report?

2)Do you have a public report posted?

3)What energy efficient features does you builder include?

4)What mold prevention procedures does your builder use?

5) Does the builder use a crushed rock or sand covering to lay the concrete foundation on?

6)What type of insulation does you builder use?

7)Is the attic insulated?

8)How many coats of stucco does the builder use?

9)What is your contract rescission period?

10)What options and upgrades come standard in your homes?

11)Who warranties the appliances?

12)What is the standard builder warranty?

13)How is the community developing?

14)Are there any "Proposed" Power Plants, Schools, Churches, or dump sites nearby?


You may be wondering why you care what the 100 page public report states or what the
70 page soil report says. To be honest the only reasons you ask those questions is to make sure
your builder is in compliance. If they are, the builder has that much more credibility to move
forward in the transaction. Sand or rock foundation that is the question. I have researched nation
wide to find out the correct answer to this question because many builders put up a good argument on what they feel is correct. My personal conclusion is simple, sand is cheaper
therefore cutting costs to the builder, and we have all heard the saying "The Wise Man Built
His House Upon A Rock."

Investments Made easy

The first thing I want you to do is identify what the word investment really means.
If you look in the dictionary, "Investment" is defined as "to commit or use money or capital
for the purchase of property or a business, etc. with the expectation of profit." Pretty
straighforward right? One other point I want to make is the importance of Diversification.
Your investment portfolio should never have all your eggs in one basket. AVOID RISK

RISK:

• Risk of loss of principal
• Risk of loss of purchasing power, ie., inflation.
• risk of losing money due to inflationis the most misunderstood and largest risk retirees face. It can destroy their retirement security more often than the loss of principal
• Risk of taxation

In future articles I am going to show you all sorts of investment issues dealing with "Risk"

Until then be focused on your homes equity. Let me show you how to manage it using:

• Tic's
• Hedge Funds
• Money Merge Accounts
• Equity Index Universal Life policies

-Christopher Rockey