Perhaps the best part of summer is the fact that a variety of projects can be completed and the temporary improvement in weather gives us permission to take a break from the routines established in the fall, winter, and spring. At least that’s the excuse I use living in the Pacific Northwest when summer time hits. Unfortunately, not all routines should be tossed to the back of our (or maybe just mine) minds so quickly. It’s the reasoning that says because it’s summer and “I’ll be playing softball once a week for two hours”, I can quit the workout regime, I mean routine, at the gym. Or it’s the thought that just because the temperature has increased and the grill is fired up more often, I should eat steak dinners every night (grilling at home is economical after all!).

Ah yes, summer break can take its toll on many a budgets and leave us dazed and confused when we returned to reality in September. So do yourself a favor and awaken from the heat induced slumber that has lulled you away from the healthy budget you had in the spring. Get back to work on making your financial plan work and set yourself up for a strong finish to the year financially speaking. Remember, a good financial plan requires routine commitment. This is one area we can’t take a break from regardless of the season!

It’s been two years, one month since Alan and Dawn decided a change was in order for their financial situation. They were living paycheck to paycheck despite having a nice income and they were tired of it. Tired enough to get motivated to make some tough changes. Tired enough to do what neighbors, friends, and co-workers were unwilling to do despite facing similar difficulties. Alan and Dawn changed their behaviors towards money and the results are amazing.

In May of 2007, Alan and Dawn had $131,000 in consumer debt  including a BMW ($22,200),  mini-van ($12,100), one credit card ($10,500), two student loans ($17,500 & $37,000), a personal loan ($28,000), and a handful of miscellaneous smaller debts ($3,700). In addition to the consumer debt they had $259,000 on a negative amortizing home-loan. Combined, Alan and Dawn had a pile of debt adding up to around $390,000. To tackle this debt they had a take-home pay of $5,200 when they started…..and then they got to work!

They “downsized” their expenses by selling their two vehicles for two much cheaper ones, cut the budget (and the credit card!) in every possible way, and stretched every penny as far as it could possibly go. Doing this dropped $17,000 off their total debt, and saved them thousands of dollars worth of interest. About six months into the process they decided to take the big step of selling their home and renting until they became debt free. Not only did they knock $259,000 worth of debt out, but it reduced their total financial risk and dealt with the terrible loan situation they were in. They ended up with monthly expenses (including minimums payments on debt) around $5,000, leaving about $100.00 each month to throw at the remaining debt.

Two years later Alan and Dawn are doing great. The once $390,000 pile of debt has been reduced down to $69,537 without having received any significant pay increase or bonus. Taking any extra money they could find from garage sales, gifts, or the odd job resulted in taking a nice size hit out of the debt. Only the two student loans (now $16,500 & $33,687) and the personal loan ($19,350) remain to be paid off, and at this rate they will meet their goal of  being debt free in less than 5-years!

What Alan and Dawn have accomplished in such a short amount of time is amazing to say the least, but it’s not impossible. It has taken them hard work and caused them to be intentional to the penny every month for two years. I’ve sat with them when it was tough and tears were rolling, and I’ve witnessed the multiple little victories along their journey. Most people living paycheck to paycheck would like to be free from the stress and limitations that situation creates, but few are actually willing to do what it takes to change the situation. It’s tough! Anything worth anything typically is. But it’s completely worth it if you will commit to it! I know Alan and Dawn are going to make their goal and I’m excited to see how their life flourishes in the future because of the decisions they are making today. Great job guys, keep up the great work! I’m so proud of you!!!

Owning a commercial property management, consulting, and development business is great, but not a week goes by that some type of challenge presents itself. Each challenge gives me the opportunity to grow the business in one of two directions: positive growth or negative growth. I thought I’d share an experience from the past few weeks that displays us going in the right direction when it could have gone very differently.

Basically, my company took over the management of an older commercial building that has been going down hill for several years now (financially and structurally speaking) from a combination mismanagement and ownership neglect. It’s a 40,000 SF property with only 50% occupancy in a tough sub-market around Everett, WA. Beyond the maintenance woes, we inherited several tenant vs. tenant issues that needed quick attention, and a few of the tenants had/have serious financial problems within their businesses as well. Since the property hasn’t been performing well for several years, the income it currently generates doesn’t cover all the property expenses and the owners mortgage. Still, the property needs several big ticket items (aka lots of cash from owners) addressed to keep from losing what tenants are left (aka remaining income stream). Tough cookie huh!

Well, I enjoy challenges like this. At least I enjoy them until attorney’s get involved! Unfortunately for everyone, an attorney did get involved on behalf of their client (a tenant at the property) who made a checklist of claims against previous property managers, the property owner, and even us (who wasn’t even empoyeed at the time stated). Essentially, half the claims were fair while half were pulled out thin air, but regardless we had address the issue. We went back and forth via official letter this and certified that, while nothing positive was really taking place. Finally, I decided to make the call. Enough with the back and forth games, let’s get to the heart of the matter and deal with the real issues at hand. I called up the attorney sending me the wheelbarrow loads of paperwork and said, “let’s talk!” After listening to his concerns and detailing our position and action plan for the property, we came to a mutual agreement that made everybody happy within a few minutes. What had been a three week merry-go-round of letters and sidestepping was resolved within 15-minutes of a phone call. While there are times for tough negotiations and cloak and dagger like maneuvering in business, sometimes it’s more effective to just make the call.

In case you haven’t heard, the market is actually up! Surprised? You shouldn’t be, unless your only source of information is found between the hours of 5:00-7:00pm on one of the three doom and destruction….I mean….quality news networks. Seriously, when is the last time you watched the local or national news and heard more positive stories about the economy, people, and cultures than you did about the bad things taking place? More than likely the answer is never. I’ve heard that “if it bleeds, it leads.” Unfortunately that phrase is all too true from the majority of today’s media outlets.

So if you’ve only been listening to all the garbage (IE. ABC, NBC, CBS, and CNN’s “news cast”) coming out of the tube, here’s a quick reality check of what is actually taking place in the local and national scene:

1. The Dow Jones Industrial Average (DJIA) is up to 8,500.00 and climbing. This is an increase of 29% from the market low just 3 months ago, and it’s up 6% in past 30-days!!! Where’s the news on that story? Even if the market didn’t move an inch up or down until March 2010, the annual return would 29%, and yet we still have another 7 months in the year to take advantage of the low market prices!
2. There 304,059,082 people out of 304,059,724 in America that are not infected with the Swine Flu (there are only 642 confirmed cases in the USA as of today, and only two people have actually died according to the CDC). In case you’re still concerned that you may become infected with the “world-wide pandemic of the decade” and you’d like to know your chances of catching this new flu bug, here you go….you have a .00000211% of a chance. If you happen to catch this little bugger you should buy a lottery ticket the same day because you must be one of the luckiest people alive according to the numbers!
3. Mortgage interest rates are near 50-year lows, meaning you can get a 15-year fixed rate mortgage at 4.5%, or a 30-year fixed rate mortgage under 5.0%. If you avoided the stupidity of interest only, “arm” loans, and other terrible mortgage products that we’re being offered everywhere during the past few years, then you’re in a great position to go buy that first home. (PS – There’s plenty of inventory to pick from, especially if you’re fond of Phoenix, Detroit, or anywhere in Florida!)
4. The Seattle Mariners are actually leading the American West by half a game and it’s May (Hey, it’s my blog so I can be proud of my hometown teams if I want to be).

There is an awesome event coming up this week that will be taking place at over 6,000 locations this Thursday (April 23rd) called “Town Hall for Hope”. Dave Ramsey, the nationally syndicated radio and television host of The Dave Ramsey Show, will be discussing the TRUE state of our economy, how we got here, what it will REALLY take to get out, and then he’ll spend an hour answering your questions live!

There are already over 1,000,000 people registered to attend at one of over 6,000 host sites internationally. Visit the “Town Hall for Hope” site link below to find the host site location nearest to you, or if you’re in the north Seattle area come join me at The Rock Church in Monroe, WA with seating available for 500 people, with the event beginning at 7:00pm sharp!