01 Jun 2011

Don’t Worry, Be Wealthy: Easiest Time Ever to Make Millions, Author Siebold Says

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The world maybe headed for another recession, but there seems to be no better time to be a millionaire or billionaire.

Global wealth hit a record $121.8 trillion high in 2010 or $20 trillion above pre-recession levels, according to a new report by Boston Consulting Group (BCG). And, the number of millionaire households jumped 12.2 percent to about 12.5 million.

The trend will continue up to about $162 trillion by 2015, “driven by the performance of the capital markets and the growth of GDP in countries around the world. Wealth will grow fastest in emerging markets,” says the report.

There are a couple of bright spots for all of you out there that do not fall in to the uber-rich category.

The United States is by far home to the most millionaires, according to BCG. In 2010, 5.2 million households in the U.S. had more than a million in assets under management compared to 1.5 million in Japan and 1.1 million in China.

And here’s the really good news. If you want to make your millions, there is no better time than now, says Steve Siebold, author of the new book How Rich People Think. In the next five years, he predicts the United States will see more self-made millionaires emerge than in any other time in history.

“This is the easiest time to become a millionaire in America than I have ever seen by far and I think the wealthy see that an that is why they are getting wealthier,” he tells Aaron in the interview above. “But, on the other side, anyone has the chance to become a millionaire in America, more right now than ever before.”

Why? Because this country has got lots of problems that are in dire need of solutions.

There are all these new ways to get rich, say Siebold. “There are so many new problems to solve. There are so many new opportunities that did not exist before the great recession”

Over the course of 27 years Siebold interviewed hundreds of millionaires and high net worth individuals. His book mixes the wisdom and advice of all these people who have created self-made fortunes.

Most people don’t think like millionaires because we don’t look at money in the right way, he says. We tend to learn about money at a very early age from people who don’t have any. “We almost have no chance from the beginning because we are programmed by people that don’t have any money and don’t understand how to think about it,” he says.

The Millionaire Mindset

There are key differences between the way rich people look at money and the way the rest of us do, according to Siebold:

  • Wealthy people look at money in positive terms and as an opportunity, where as most of us live in fear of being laid off or not having enough money for retirement.
  • Instead of worrying about running out of money, soon to be millionaires are thinking how to make more money. World-class performers are finding problems that are profitable to solve. They know that just because a solution hasn’t been discovered yet doesn’t mean it doesn’t exist.
  • Millionaires tend to move towards what they want, rather than move away from what they don’t want, which is what the masses most often do.
  • World-class thinkers have the guts to be optimistic right now in these shaky times and reject the middle-class cynicism that plagues the masses. It’s not comfortable for a millionaire in the making to forge ahead when everyone around him or her is negative, cynical and unsupportive, yet the great ones push forward and are rewarded with riches for the rest of their lives.

Siebold’s bottom line: “Take inventory of your consciousness and the way you think about money and ask yourself: Is this the way a rich person thinks or someone in the middle class thinks about money?”

30 May 2011

Short Sales, REO’s and Foreclosures

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Short sales and bank-owned properties sold for 42 percent less in Newport News than homes not facing foreclosure in the first quarter. Hampton short sales and bank-owned homes sold for 26 percent less, according to RealtyTrac, which monitors foreclosure activity nationally. The number of Peninsula-area foreclosure sales, 187, has fallen — dropping 27 percent from the fourth quarter of 2010, when it was 257, and 28 percent from the first quarter of 2010, when it was 259. Is that good news?

It depends on whether the trend continues over the next few months, said Dale Chandler, Virginia Peninsula Association of Realtors president. Banks have slowed processing foreclosures after they discovered mistakes from moving them through too quickly. And they’re under remendous pressure to offer loan modifications, and then short sales, before resorting to foreclosure, he said. “It’s way too soon to say it’s turned,” he said. In fact, the Hampton Roads Planning District Commission released a report Wednesday showing more
homes heading toward foreclosure. About 58 percent of foreclosure inventory is prime mortgages, unlike the earlier wave of subprime and alternative loans, according to the Richmond Federal Reserve. Based on delinquencies, roughly 10,500 homes with prime mortgages are likely to enter the market in the next year or two, plus 8,500 more that are distressed with subprime or interest only mortgages. With initial unemployment claims still up and job growth slow, foreclosures will continue. “This will add more homes (supply) to the total market, and put
further pressure on falling home prices,” the HRPDC report said.

The inventory of homes listed for sale will need to drop below a six-month supply before prices start appreciating. If new home construction and household formation hold steady, it’ll take 3.3 years to clear an excess supply of about 24,000 homes, assuming home sales maintain a 10,500-a-year pace, the report said. The average price of the 88 short sale or bank-owned homes in the first quarter was $105,646 in Newport News. It was $124,684 in Hampton for the 40 sales and $249,120 in James City County for 24 sales. York  County had 11 foreclosure-related sales with an average price of $237,986. The average sales price was $225,525 in Gloucester County, which had 12 foreclosure-related sales. It was $295,083 in Isle of Wight County for eight sales and $261,633 in Poquoson for four sales. Foreclosure-related sales in the first quarter accounted for 36 percent of Hampton sales, 37 percent of Newport News sales, 17 percent of York sales, 20 percent of Gloucester sales, 13 percent of James City sales, 14 percent of Isle of Wight sales and 22 percent of Poquoson sales.