Over the next five years,
home prices are expected to appreciate
3.22% per year on average and to grow by 17.3% cumulatively, according to Pulsenomics’ most
recent Home Price Expectation Survey.
So, what does this mean for homeowners and their equity
As an example, let’s assume a young couple purchased and closed
on a $250,000 home in January. If we look at only the projected increase in the
price of that home, how much equity will they earn over the next 5 years?
Since the experts predict that home prices will increase by 4.4%
this year alone, the young homeowners will have gained $11,000 in equity in
just one year.
Over a five-year
period, their equity will increase by nearly $43,000! This
figure does not even take into account their monthly principal mortgage
payments. In many cases, home equity is one of the largest portions of a
family’s overall net worth.
Not only is home ownership something to be proud of, but it also
offers you and your family the ability to build equity you can borrow against
in the future. If you are ready and willing to buy, find out if you are able to
FIVE SIMPLE QUESTIONS TO TEST YOUR FINANCIAL HEALTH
The Federal Reserve Bank of St. Louis recently concluded a 20-year study involving 38,385 families. (Click here to view.) They discovered that the answers to five simple questions determined whether those families were able to improve their financial status and grow their wealth over time. As you consider your own finances, it may be useful to focus on these five questions:
If you answered yes to 1, 4 and 5, and no to 2 and 3, you received a perfect score! You're on the right track… keep doing what your doing. But if you answered no to 1, 4 or 5, or yes to 2 or 3, you've just identified the area(s) of your financial health that need improvement!
Please contact me and let me know if I can help in any way as you seek to improve any of these areas.
THREE WAYS TO SAVE MORE
When it comes down to saving money, I've found three rules to be useful:Rule #1: Involve your emotion, not just your logic
It's not about accumulating more money… it's about what accumulating more money will mean for your life. You'll get motivated real quick (and stay motivated) if you tie your savings goal to something real and tangible in your life such as:
Rule #2: The problem is usually very simple to identifyA lot of times we overcomplicate things… and we overlook the most simple things in life. The reason why we aren't saving enough right now really boils down to one of two things. Either:
It's that simple! Of course, it's often possible to find ways of making more money... such as adding another job or advancing in our career path. But those ideas can often result in a negative impact on our lifestyle. That's where Rule #3 comes into play:Rule #3: Evaluate every spending decision in the context of the overall financial plan.A lot of times we take on debt (car loan, credit cards) to finance a short-term financial need. The problem is that this debt ends up eating into our cash flow and preventing us from saving toward our longer-term financial goals. Sometimes, it's not just the debt that pressures our cash flow, it's the unexpected or un-budgeted expenses. To remedy the situation, I've found it useful to create a budget that I reference and re-evaluate from time to time.Let me know if you'd like for me to pass along my budgeting template and I'd be happy to forward it to you!