The evening was quite the spread of delectable snacks and free notebook-folder things. But really, the presentation was the show. Doug talked about maintaining balance between family, finances and everything else that draws on your attention. He then enumerated the rules of a successful investment: safety, liquidity and return. I've been to a lot of financial seminars, but this one was great.
The foundation of his presentation was optimizing your assets to follow these three rules. But we spent the majority of our time talking about the home equity. Investing in your home is a sound financial decision, but it isn’t liquid, it’s only safe if nothing happens to you home (and the market doesn’t go down, hmmm...), and although equity goes up over time, there is no consistent return. Doug questioned why everyone is so interested in adding extra money onto their monthly payments to pay their home off faster because there are significant tax breaks for mortgage interest.
Now, have an open mind for just a minute. I know we have some very defined values in the LDS church about morgages, and my parents have taught the “pay off your home strategy to life” since birth. But, Doug recommends a different approach, separating the equity from your home, to make your investment safer, more liquid and guarantee a return. We don’t take equity out of a home to consume rather to conserve. When you follow this investment strategy, you double the productivity of your assets. Because we need to guarantee the investment, Doug recommends insurance contracts. They can be linked to the S&P 500, capturing an average 10 percent return during bull markets and a guaranteed 1 to 2 percent during bear markets. Pretty nice, huh?
As you can tell, I am excited about Dougs ideas and I want to learn more. I am going to purchase his book Millionaire by Thirty. The book is written to people my age or younger with a entry level income. Lets read it together, any takers?
Anyway, I want to know what you think, that is if you care about financial planning. Do you think pulling equity out of your home to invest is every a prudent decision?
6 comments:
I will TOTALLY read it with you. One can never have too much financial stability in his or her life.
hey scott!
i had no clue you had a blog! well our blog is
xxcarolynxx.blogspot.com
So, who is Stephanie?
I'll read it too. Let me know when you start and where you're going to get it.
Well done Scott. I would say that is a very accurate recap. Just remember that diversifying your assets only works if you are disciplined enough to leave your money untouched. Nice picture :)
ok so I would like pictures from Mexico as well as a summary of events/happenings posted ASAP
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