Three Steps to a More Powerful Self Image

What does it mean to act “out of character?” In Hollywood, when an actor breaks character, it means they are acting in a way that isn’t consistent with the character they are portraying. Sometimes an actor will get so enmeshed in their role that they argue with the writers and directors proclaiming, “My character wouldn’t do this!” You may not be an actor, but I can assure you that you also have a character that you cling to and defend. If you’ve ever said, “That’s not me!” or “I could never do that,” it may be time to re-write your character so you can start to live your best life without limits and without fear.

Last week a good friend of mine couldn’t wait to tell me how proud she was for getting up early and going to the gym. “I don’t know what came over me,” she gushed, “it’s so out of character for me.” This innocuous comment illustrates both a tragedy — when you cling to a less than optimal version of yourself — and an opportunity — when you can recognize that you have the ability to break free from your own limits.

Who you have been doesn’t have to be who you are. You are not computer code, which once programmed, cannot change, grow or adapt. Your life is shaped significantly by the character you create and the story you tell yourself about the kind of person you are, what you’re capable of achieving and how you should behave.

But what happens when we desperately want a leading role, but our character has a bit part? What happens when your view of who you are actually holds you back? Is there something that would propel your life forward, but that you just can’t bring yourself to do? If so, it’s time for you to create a different story and character that embrace what you’ve been resisting.

Here are three steps to help you create a more powerful self-image:

1) Who do you think you are? You are who you think you are, so let’s find out what you think about yourself. Write down everything you can about how you think about yourself, especially any negative labels you use, such as shy, dumb, guilty, angry, etc.
2) Get real. Focus on the characteristics that are holding you back and think about them rationally. Are you really a terrible public speaker? Really? What proof do you have? Are you’re not the kind of person to get up early and exercise? Really? Are you a vampire? Do you have a medical condition that prevents you from getting your butt out of bed at 6 a.m.? Excuses often turn into habits that then create our character.
3) Create a better character. Stop being half the person you could be by creating a new character — one that does what you’re afraid to do or wouldn’t do.

What would be “out of character” for you? Standing up for yourself? Taking a risk at work? Saying no? Trusting? Questioning? Speaking up? Starting? Finishing? Becoming healthy? Staying sober? Showing up on time? Starting a company? Sticking to your guns? Reading a book? Writing a book?

The next time you find yourself saying, “I couldn’t do that, that’s just not me!” Yell, “Cut!” and re-write yourself a better character.

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Ok. You Win. Stop Listening to Real Estate Agents.

Each day we attempt to give truthful insight on the current housing market. If we report what is perceived as negative news, some in the real estate community come down on us hard. However, when we explain that we think now is a great time to buy, we get an avalanche of feedback from the general public attacking us for being nothing more than puppets for real estate agents across the country. Today, we don’t want you to listen to what we think about the opportunities that exist for buyers in this market. Instead, we want to report on what some members of the investment community are saying.

The Wall Street Journal

Jim Woods wrote an article earlier this year for Market Watch, part of the Wall Street Journal’s digital network. Its title: Why your best investment is a house. Mr. Woods compared the investment potential of real estate against other asset classes such as stocks and precious metals. Here was his conclusion.

One reason your best investment right now could be a home has to do with the relative upside of getting in on an asset class while it’s at the bottom versus buying into other asset classes that could be near a top. Consider for a moment the tremendous upside we’ve seen in stocks, precious metals and agricultural commodities over the past 12 months…

If you’re a long-term investor looking to put money to work, now is not really the best time to get into any of these three asset classes. However, with home sales starting to improve, and with prices now possibly forming a bottom, real estate could well be the asset class that represents the best low-risk buying opportunity out there today…

Mr. Woods went on to talk about the financing portion of the purchase:

Yes, mortgage rates still are near historical lows, but if we see these rates rise, then the cost of a new home could climb significantly. So, now could really be the best time to pull the trigger on that home purchase — and it could also be your best investment right now.

Fortune Magazine

Shawn Tully, senior editor at large for Fortune penned an article last week which was titled: Real estate: It’s time to buy again. In the article, Mr. Tully explained:

Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.

Let’s state it simply and forcibly: Housing is back. Two basic factors are laying the foundation for dramatic recovery in residential real estate. The first is the historic drop in new construction … The second is a steep decline in prices, on the order of 30% nationwide since 2006, and as much as 55% in the hardest-hit markets. The story of this downturn has been an astonishing flight from the traditional American approach of buying new houses to an embrace of renting. But the new affordability will gradually lure Americans back to buying homes. And the return of the homeowner will start raising prices in many markets this year.

Bottom Line

Neither of the two media sources mentioned above has ever been accused of cuddling up to the National Association of Realtors. However, both have come to the same conclusion. It’s time to buy real estate. Perhaps we should listen to them.

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Double Dip or Double Your Money?

Last week, MacroMarkets LLC announced the results of the March 2011 Home Price Expectations Survey, compiled from 111 responses of a diverse group of economists, real estate experts and investment and market strategists. Many media sources reported on the survey’s comment about a projected ‘double dip’ in prices. What the media didn’t aggressively cover was the other projection in this same report. Today we want to shed light on both portions.

Double Dip

There is no doubt the survey looked negatively on house prices through the rest of 2011. Robert Shiller, MacroMarkets co-founder and chief economist said:

“Overall, the sentiment among our expert panel regarding the U.S. housing market outlook continues to deteriorate. Now they are expecting only a weak recovery, and even that is not until 2013. This uninspiring view must be influenced by the persistently weak market fundamentals – high unemployment, supply overhang, an unabated foreclosure crisis, and constrained mortgage credit.”

Terry Loebs, MacroMarkets managing director commented on the dreaded ‘double dip’.

“Many more experts are now projecting a double-dip after witnessing the double-dead cat bounce that came in the wake of expired government stimulus programs. In December, only 15% of our panelists were projecting that a new post-crash low would materialize for national home prices. Now, just three months later, almost 50% foresee a double-dip happening this year, and not a single panelist expects national home prices to recover to the pre-bubble trend in the coming 5 years.”

However, the longer term view of home prices was much more optimistic.

Double Your Money

The experts projected that by the end of 2015 home prices would attain a cumulative level of appreciation of almost 10% (see chart below from the report).

This means, if you purchased a house today with a 10% cash down payment, you could double your cash in five years; even taking the projected double dip into consideration.

Shiller also noted that there continues to be significant dispersion among the panelists regarding their individual home price forecasts:

“A few respondents do see a real recovery, predicting prices up 20% or so by 2015.”

If that happens, you would have TRIPLED your cash.

Bottom Line

If you are thinking of selling in the next 12 months, you should do it before the projected ‘double dip’. If you are thinking of buying and you plan to live in the home for at least five years, your financial investment will be fine.

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Did Modification Programs Work?

The government decided early on that the market would not be able to absorb the number of foreclosures that the financial crisis was creating without crushing house values. This was one reason that they funded the Troubled Asset Relief Program (TARP). This past week, the Congressional Oversight Panel (COP) weighed in with their opinion on TARP’s success.

Today we want to concentrate on the parts of the report that pertain to real estate. TARP funds were to be used:

…in a manner that protects home values, college funds, retirement accounts, and life savings; preserves homeownership and promotes jobs and economic growth; maximizes overall returns to the taxpayers of the United States.

Did TARP Accomplish Its Housing Goals?

One way TARP was to accomplish ‘protecting home values and preserving homeownership’ was through the Home Affordable Modification Program (HAMP). According to the COP report:

…when the President announced the Home Affordable Modification Program in early 2009, he asserted that it would prevent three to four million foreclosures. The program now appears on track to help only 700,000 to 800,000 homeowners.

We want to say that, if hundreds of thousands of families averted the devastation foreclosure can bring, we consider the program as worthwhile. Successful? That’s a different story.

Another program initiated to help was HOPE for Homeowners. It was established by Congress in July 2008 to permit the FHA to insure refinanced distressed mortgages. However, as the report explains:

HOPE for Homeowners was initially expected to help 400,000 homeowners, but it managed to refinance only a handful of loans. This was likely due to the program‘s poor initial design, lack of flexibility, and its reliance on voluntary principal write-downs, which lenders were very reluctant to make.

The Only Good News?

The only silver lining is that TARP didn’t cost the taxpayer as much as was originally estimated. At what expense to troubled homeowners? In discussing the falling cost of the program COP stated:

… a separate reason for the TARP‘s falling cost is that Treasury‘s foreclosure prevention programs, which could have cost $50 billion, have largely failed to get off the ground. Viewed from this perspective, the TARP will cost less than expected in part because it will accomplish far less than envisioned for American homeowners.

Bottom Line

TARP was set up to avoid home values being crushed under the weight of foreclosures. To that regard, it seems to have done nothing but delay the inevitable.

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Homeownership: What Americans Think

There is a growing number of people debating whether the government should continue its level of support for homeownership. Mortgage assistance is being pulled back and even the mortgage-tax-deduction is now up for debate. We want to look at how the people of this country view owning a home and the reasons they buy. Last week, Fannie Mae released the National Housing Survey. Here are the survey’s more interesting findings.

Belief in Homeownership

-96% of all homeowners said homeownership has been a positive experience.
-84% of Americans still believe that owning a home makes more sense than renting. Even 68% of renters believe owning makes more sense.
-64% consider buying a home as a safe investment. Buying a home was considered safer than buying stocks by over three times the number of people (64% vs 17%).
-2 in 3 Americans believe that lifestyle benefits of homeownership (65%) are superior to the financial benefits (32%).

Top Non-Financial Reasons to Buy a Home

Lifestyle Benefits: The broader security and lifestyle benefits of homeownership, such as providing a good and secure place for your family and children, where you have the control to make renovations and updates if you want, and in a place that’s in a community and location that you prefer.

1. It means having a good place to raise children and provide a good education
2. You have a physical structure where you and your family feel safe
3. It allows you to have more space for your family
4. It gives you control over what you do with your living space (renovations & updates)
5. It allows you to live in a nicer home
6. It allows you to live in a location that is closer to work, family, or friends

Top Financial Reasons to Buy a Home

Financial Benefits: The financial benefits of homeownership: its value as an investment (especially compared to paying rent), its value as a way to build up wealth for retirement or to pass on to your family, and the tax benefit.

1. Paying rent is not a good investment
2. Buying a home provides a good financial opportunity
3. Owning a home is a good way to build up wealth and pass it along to my family
4. It is a good retirement investment
5. Owning a home provides tax benefits
6. Owning a home gives me something I can borrow against if I need it

Bottom Line

The people of this country have always seen great value in owning their own home. They still do. We believe we should never underestimate the importance of homeownership as a crucial piece of the American Dream.

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