Be Wealthy & Smart

Learn how much home equity Americans have, how many Americans own their home free and clear and if it impacts your wealth. Recently a friend told me she'd rather rent than buy a home. Is it still a good idea to own a home? Listen to Be Wealthy &Smart podcast #137: "Should I own a house or rent?" Ever wonder how much equity most people have? According to the Urban Institute, it's a little over $150k. Not only do you have to come up with a 20% downpayment (not always), but you're also paying into principal each month. The forced savings is powerful, even if the home doesn't appreciate. Americans over age 60 hold 52% of all home equity; under 50 hold 23%; and those under 40 owned 17%. Of 73 million homeowners, 46 million have some debt on the home and 27 million have it paid off. Homeowners tend to have more wealth in areas where real estate has increased more. Makes sense, since it's most peoples' largest asset. Read podcast reviews.

Women in households across the US manage $5 trillion! More than half of women with investible assets of $1 million think their financial advisor doesn't understand them, according to a 2014 study by the Center for Talent Innovation, a NY think tank. A study by National Bureau of Economic Research in 2011 found that FA's ask women fewer questions than men in the initial meeting and 40% are likely to tell women than men that they must first transfer their portfolio to the advisor's firm before receiving any advice. It goes along with what I've been told…that FA's don't speak to the woman, even if she's the breadwinner, they look at the man the whole time, don't ask her goals, etc. According to Wells Fargo, the median retirement balance in women's accounts is $500k vs. $700k for men. On average, women drop out of the workforce for 11 years to care for children. That amounts to $224k lost in lifetime earnings and SS benefits, according to AARP. Less than 25% of advisors are women, with no change in a decade. By 2054, $40 trillion in wealth will be passed on, much of that falling into womens' hands according to the Center for Talent Innovation. Seventy (70%) percent of women leave their financial advisor after their husband's death. Women with $1 million in investible assets 45% were deemed financially literate, but only 30% said they felt confident in their knowledge vs. 39% of men deemed financially literate and 34% of men felt confident. Men were more interested in performance and investment choices and women were more interested in services, charitable giving, tax management, & long-term care. I want to encourage women to learn through the podcast. Share with your friends. Financial literacy is important.

Learn why independent researcher Steve St. Angelo of SRSrocco report believes there is a coming shortage of silver. See charts at www.lindapjones.com/srsrocco

Learn why a 30 year mortgage can be better than a 15 year mortgage when investing in real estate. Here is our listener question this week: Hi Linda, You talk about using leverage to purchase rental properties as well as making an extra payment each year to pay down the mortgage quicker. I have a rental property that currently has a 15 yr note at 4% and we are paying approximately $360 per month out of pocket to cover the mortgage (incl. taxes, insurance, and PMI). We refinanced about 4 years ago into the 15yr in order to reduce our interest rate and pay down the principle faster since we were underwater at the time. Now we are back in the black and were considering refinancing into a 30yr mortgage (which would also be at 4%) in order to increase our cash flow and invest the savings each month either in the market or save it toward a down payment on another property. Our payment would go from $1260 to $760. I wanted to hear your thoughts on this plan. We currently receive $900 per month in rent, which is slightly above market value, so I would not expect rent to go up for a few years. Thanks so much. Love the show. I love this question! This is why I don't like 15 year mortgages! 1). All debt is not bad 2). Debt will enhance your return. Example: $100,000 cash vs. 10% down 3). A 30 mortgage will shift your cash from from negative to positive cash flow 4). You can still pay off your 30 year mortgage early by making extra principal payments. 5). You control the payoff, not the bank. 6). Pay extra to get rid of PMI payment. Need to get to 20% equity. Can pre-pay, get a new appraisal, refi, or remodel. 7). $1260 current payment - $760 new payment = $500 per month less, which would cover the $360 negative cash flow. Why not? Then: $900 rent - $760 payment = $140 positive cash flow All this talk that debt is evil is bunk! Debt is your friend in real estate. It's called leverage and helps you get higher compounding rates.

Learn what asset is near the top of its cycle and which asset is near the bottom of its cycle. What asset is in a bubble? Bonds - IOU's that pay the investor interest. Interest rates move in 30 year cycles. Near the low in interest rates. It's a process. In Europe, some countries have negative interest rates (NIRP - Negative Interest Rate Policy). Investors pay to own sovereign bonds. Fear of losing money or default and want a guarantee. What asset is near the bottom? Silver. You can see cycles in the chart. Go to my website to see it: www.lindapjones.com/silver Chart shows cycles and the MACD. Shows the moving averages or calculations that show the trends and help you see the direction of movement and when it is turning into the opposite direction. Also can see it is peaking here, short term. Waves of energy flow through everything, even investments. You can see the cycles of the energy waves in this financial chart of the price of silver, which is our #1 holding and the #1 performing investment year-to-date, up 42%! Turning into the down part of the cycle now before it moves higher. We have a clear indication silver is about to move lower. It's normal to have regular corrections in the price before it moves higher. Don't be scared when silver moves lower, it's expected right now. There's a lot more on the upside for silver long-term, so I'm not getting caught up with short-term trading because the greater risk is that you could be out of it and miss it when it finally blasts upward. So hang in there. Don't be a buyer here, that time will come again in the next month. If you want to know what to buy and what NOT to buy to take advantage of silver, that's what the BWS VIP Experience is for. Go to www.lindapjones.com/joinvip

I went to San Diego a couple of days early and stayed in an Air Bnb for the first time. Moved to a suite at the Westin on Broadway for the mastermind meeting. What is Masterminding? Is it another form of brainstorming? Yes, it's similar. It comes from a term used in the book, Think and Grow Rich. It's when everyone brainstorms and focuses on ideas for one business at a time. It's incredibly powerful and kind of like a mini-focus group research project. The "mastermind" is the group and the activity of spending an hour talking about plans for new services, products and implementation is extremely valuable. For video of Angela Ahrendts, former CEO of Burberry, go to my fan page to watch. www.facebook.com/lindapjonesfanpage My friend buys companies. The big issue is mindset. Afraid to fail. Sarah Blakely, billionaire & CEO of Spanx read Wayne Dyer's book - How to Be a No Limit Person. Her father taught her to embrace failure. How did you fail today? Are you afraid of failure? Is it keeping you from even trying? Are you afraid to not be perfect?

Learn how much money the average worker has saved in retirement, 3 steps to take if you're behind on saving enough, and why you need to prepare for early retirement even if you don't think you need to. 77% of workers have less than $250,000 saved for retirement. The next largest group has less than $1,000 saved! If you save 1% more of a $50,000 income, then: 4% for 30 years @7% grows to $217,370 5% for 30 years @7% grows to $271,000, a 25% increase! 3 things you can do: Boost savings. Delay retirement. Cut spending. Use catch up provisions to save more. Traditional and Roth* IRA's allow for an extra $1,000 catch up or $6,500 contribution instead of $5,500 when you're over age 50. Pay attention to modified AGI limit: Single $117,000 - $132,000 Married $ 184,000 - $194,000 Roth contributions are phased out at these levels. SEP IRA $53,000 maximum on $265,000 considered compensation (25% of compensation) 401(k) and Solo (k) Standard contribution is $18,0000, catch up is $24,000 (over age 50) Simple IRA Employers match up to 3% Standard contribution is $12,500, catch up is $15,500 (over age 50). Boost Social Security 8% annually for each year you put it off. Only take 4% out of your retirement plan and you likely won't outlive your income. Retirement income + Pension + Social Security + Side Hustle = Retirement Income Can you downsize your home and use equity for retirement? Save more on the front end and save more for retirement as soon as possible. Start saving in your 20's if possible. The sooner the better!

Explore why many Americans retire earlier than planned, with 60% citing hardship as a key reason. Discover the surprising statistic that 45% retire when expected, while the same percentage retire sooner. Motivations vary: from financial readiness to pursuing new passions or coping with workplace changes. Key challenges also emerge, revealing the financial confidence gap and the impacts of unexpected life events on retirement readiness.

Learn about buying your first home, what to look at, and things to avoid so you have a smooth transaction. It starts with having a financial/economic plan for buying a home and do lots of due diligence before buying a home. Get a thorough inspection. Jules also covers documents, title insurance, closing costs, etc. Jules can be reached at his website (along with more information about real estate transactions at www.JulesHaasAttorney.com. His phone number is 212-355-2575 and email is Jules.Haas@verizon.net.

Listener question Friday - Linda, I used to have a self-directed IRA but closed it. Now I'm planning on opening one up again to invest in things, including precious metals. It's saying XX Bullion prefers XX Depository, but will ship your metals to any depository you choose. If it has to go into a depository, what depository would you recommend?