The middle class is steadily facing thousands of questions surrounding the economic climate. “What shall we do?” The experts lend got helpful advice.
Last night, I caught a re-run of Suze Orman on The Joy Behar Show. She pleaded with callers to not dig into their 401k, to take regular jobs (no matter the pay) and to rent instead of purchase houses you can’t afford. “You can’t afford?” Suze expresses that “if you can’t put 20% down and have a 8-month emergency fund, you can’t afford to purchase a house in these times.” But what if you can create a 8-month emergency fund?
Suze as well as other experts fail to connect the dots for you. What if you were wanting to purchase a 100k house and needed to put 20k down as your 20%? Now you gotta ask yourself: “is this house worth 100k?” In another response to a caller, Suze says you should negotiate to purchase a house that’s listed at 150k for 120k.
Now lets go back to my original scenario with the 100k house. Well if you’re approved for a 100k loan, then you’ve created 20k for yourself which kills two birds with one stone, your down payment decreases and you can negotiate earnest money so that you have to pay none. Remember people are desperate to sell. Furthermore, you can use that 20k for investment or as a part of your 8-month emergency relief fund. Right?!
Here’s the clip from last night. We must become independent thinkers if we are to create wealth independently from our nation’s climate, like Buffet, Jobs, Winfrey have done. Watch and listen to the experts and then follow all money trails. Some experts will give you advice to keep you middle class; others will challenge you to take a risk that just might pay off in the long run. Hence, Buffet “it’s a good time to buy.”
Next time, Panachers!!