Loyalty: How We Treat Ourselves for Less

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One of the most common overspending traps that we fall into is the idea that we deserve that (expensive) purse, that (overpriced) gadget, or that trip to Hawaii. While that is a slippery slope to getting off track financially, we should still seek to have balance in our lives. Budgeting can quickly become a chore if we find ourselves giving it all up without receiving anything in return. That’s why it’s important to treat ourselves. But what is the best way to do it?

In our case, we make it a point to maximize our loyalty rewards program. We find a service provider we are happy with in a couple of categories and study their rewards program to see how we could best benefit. In our case, we have the trifecta of travel. My husband is an avid traveler. Personally, I’m not a fan of airplanes so my fear of flying often overrides my curiosity to see the world. However, we find the balance between satisfying his wanderlust and my desire for firm ground. Even with moderation, travel still remains our most expensive hobby. As a result, we have found creative ways to manage costs.

Flights: We stick with one airline as much as possible. That allows us to rack up miles and a certain number of trips in order to gain a certain status with the airlines. We also have the option of buying tickets with our miles or transferring them to partner loyalty programs. We have racked up thousands of miles with JetBlue and are saving them towards a future trip.

Lodging: Although we spend very little time there, a hotel is one of the most important part of any trip. Not only is it the most expensive, but it is a matter of comfort. We are fans of everything Marriott. They aren’t always the cheapest but as Gold members two years running, we enjoy having high speed internet at no additional charge, early check in, late checkout, bonus points towards future stays, complementary breakfast, welcome snack, discounted rates etc. We also like the general consistency that the brand provides all over the world. Sure, we have gone to Marriott brands or properties where the rooms have been smaller, but the service has always been impeccable and there have been no concerns about the cleanliness. And since both my husband and I travel for work, we make sure that we earn points with every business trip by staying at Marriott properties; points we use to subsidize our pleasure trips.

Credit Card: As American Express members who use the Premier Gold Rewards card, we benefit from no foreign fees on overseas purchases and can take advantage of statement credits ($75) for certain hotel spending and in-flight purchases and checked baggage ($100) that all but wipe away the $195 annual fee. That is in addition to bonus points in certain spending category. Using our AmEx for every purchase allows us to earn points an accelerated pace that we can later redeem for statement credits to offset our spending or AmEx gift cards.

This combination of loyalty programs, including our willingness to actively bargain hut, has been our ticket to cheap travel.

Have you thought about how you can treat yourself for less?

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Screen, Screen, Screen: The Real Estate Professional’s Protection Against Scammers & Time Wasters

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Disclaimer: Any resemblance to actual luxury wives, persons living or dead, or actual events is purely coincidental.

Location, location, location? If you’re a buyer yes. If you’re a real estate agent, due diligence might be your mantra. There have been stories in the news for decades about real estate agents setting up their final appointments unbeknownst to them. There are some very sick and dangerous people out there. I’ve seen cold and/or vintage cases on Investigation Discovery just like I’ve seen modern cases play out in real time on the news. Fortunately, I find that agents are becoming more aware of the importance of not doing blind showings. Furthermore, access to technology has given us the resources required to separate our personal lives from our professional lives. We can use email to get acquainted (and leave a paper trail), have a google voice number, use a PO Box or use office sharing (for smaller operations) to avoid linking any of our activities to our primary residences. Some agents have even begun to arm themselves to various degrees (mace, guns, knives) and the team model is becoming more popular, giving us strength in numbers. But not every dishonest inquiry will lead to physical harm. How do we protect ourselves against scammers?

With real estate being an appointment-based business, it means that efficiency is the key to success. We cannot afford to waste time on buyers who are unrealistic about their purchasing power. Or worse, waste time on those with no purchasing power at all, but simply seek photo-ops for social media attention where likes feed their egos but not their empty lives. I’ve had my fair share of time wasted and I will tell you it is incredibly painful. You can’t help but think of all the serious clients you missed talking & spending time with those who did not buy anything or bought elsewhere. However it can also be a liability to both your overall livelihood and your short term income.

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I was recently made aware that our resident dollar store Kardashians were claiming to be renovating a recently acquired multimillion-dollar mansion that was at some point the residence of actor/comedian Katt Williams. Perhaps in a desperate attempt to discredit my previous post about their true socio-economic status as routinely evicted squatters, they reached an apex in the web of lies they spun aggressively and without much foresight. They posted pictures and videos of the property online, including showing children playing in the pool. This would normally be very convincing, because, how many people get to hang out by a pool on 10 acres of land near prime real estate if we don’t have access to the upper echelon? Except, the pictures combined with the knowledge that the home was the residence of a celebrity, only made it easier for people to track down. The issue is that the home in question is still for sale. It was for sale at the time this post was written and it was definitely for sale when the pictures were being shared online last week showing children in the pool, while they claimed that they were settling in and renovating.

A perturbed individual with some superb detective skills (not me) was able to unravel the entire story within 24 hours. It turned out that the husband has a real estate acquaintance who was able to give them access to the property and allowed them to get a little too comfortable in someone else’s home. It has yet to be determined whether or not the showing agent was another victim of their scamming ways or a wiling participant but he was certainly instrumental in the (attempted) trickery. But I will give him the benefit of the doubt for the sake of this post & show how his lack of screening may have opened him up to liability.

Listing Agent: Within reason, the listing agent is responsible for securing the property & protecting their client’s privacy. That is why many sellers demand accompanied showings for properties over a certain price point. A listing agreement is a contract with the seller. While your primary duty is to actively market & subsequently sell for the highest price, there is a certain expectation from the seller that you will do what you can to protect their most valuable asset when they hand you the keys. After all, the house has not yet been sold, which makes it still the property of the seller & often times, their homes. Many people still reside in houses that are on the market until 24-48 hours before closing. This stunt could have cost the agent the listing, which at over $3 million, would have been quite the payday. As a seller, there is no way that I would be comfortable with continuing a business relationship with someone who failed to protect my asset. What would have happened if they began squatting & had to be evicted?

Showing Agent: Within reason, a showing agent should take responsibility for the potential buyers they bring in. While you’re not responsible for an unruly child who bumps into an expensive lamp, I cannot imagine the lack of ethics & professionalism it takes to allow 2 children in a pool at a house that is actively being marketed for sale. While the showing agent cannot control where the footage subsequently ends up, it is a clear indication that at the very least, there were no boundaries established, and at worst, he might have been a willing participant. He runs the risk of being reprimanded by his managing broker or worse, be reported to the licensing board.

This had the potential of being a PR nightmare for both brokerage firms. Rogue showing agents giving known grifters access to high end properties & listing agents perceived as careless for not keeping an eye on the foot traffic. But, could this have been avoided? Absolutely. A little bit of screening could have prevented this egregious violation of  privacy.

First, interview your prospective buyers. An 30-minute long conversation might save you many hours of driving around people with no ability to buy or those whose tastes far exceed their financial capacity. Not to mention, lies are not very hard to detect. The more outrageous the story, the harder it is to keep it from unraveling. Ask questions and if you have any doubts, ask follow up questions.

Second, request documented proof. For anyone who will be financing their purchase, ask for a pre-qualification letter. Do not accept anything older than 3 months. The most important function is to make sure that you show them homes in their price range. If someone is qualified for up to $500k, there is no point in showing homes in the $650-700k range. The secondary purpose is to discourage any window shoppers or scammers for wasting your time. The people in question have been known to forge wedding dress receipts so this might not have deterred them, but the vast majority of con artists aren’t that committed to a scam and will likely move on to someone else who isn’t going to ask those questions. You can further protect yourself by requesting a letter with a phone number on it & the name of the loan officer who issued it. The possibility that you might call the financial institution to verify, should put forgers on ice.

Third, be ready for cash buyers. Not everyone finances a home purchase. Some really well-off people buy houses cash. Scammers might try and use that to try and circumvent the pre-qualification request. In that case, demand proof of funds. If it’s true, the seller will demand it anyway when they get an offer. If they aren’t comfortable enough to provide you with that information, perhaps, they should look to hire an agent they trust.

Fourth, sign a contract. In a previous post, I discussed my unwillingness to work for free & I presume you feel the same way. A buyer’s contract is your sole protection from someone making you do the leg work, picking your brain but buying from their cousin Deedee who’s efforts did not extend beyond completing the offer contract. That particular safeguard will not protect against scammers, but the hope is that all the other barriers will prevent you from getting to that point with a scammer anyway.

Finally, don’t be gullible. Discernment is a great asset and it is time we use it to its full capacity. You are a professional handling the most expensive transaction most people will ever make in their lives. You are not a follower of a fantasy social media account desperate for a fairy tale story. You are therefore held to a higher standard and it is unacceptable for you to see and yet ignore a multitude of red flags. Question the statements and behaviors you find suspicious.

It might seem difficult to implement these rules, especially when we are eager for business, but most clients will gladly provide the required information to ensure maximum efficiency. You just have to explain that it is for your protection as well as theirs. They are more likely to respect your professionalism & your time as you’ve demonstrated the value you place on your schedule.

 

 

Your 7-Day Guide to Financial Discipline

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While you can’t strike it rich in 7 days, you certainly can organize your life enough in 7 easy steps (1 per day) to improve your financial management skills.

Monday: Maximize your retirement contributions, either to the maximum amount you can afford or to the IRS limit. If you have not yet started contributing, do at least the minimum that will get you a company match.

Tuesday: Create a budget. Budgeting is the building block of financial freedom. Start based on the new amount you will have left over in your paycheck after you’ve changed your retirement contributions.

Wednesday: From your budget, you will of course categorize a portion of your income as savings. Set up an automatic transfer that will happen around the same time every month. Saving in autopilot mode is the least painful way to set money aside because you don’t have to think about it.

Thursday: Set calendar alerts of all your upcoming bills. Nothing is more damaging to your finances like late or missed payments. They negatively affect your credit score reducing your chances of getting the most favorable rates and you face the potential of late fees that will chip away at money that you need to hold on to. Having your alerts pop up a day or 2 in advance if you’re paying electronically or a week in advance if you’re paying by check, will make sure you stay on top of everything you owe.

Friday: Clip coupons and know your cash back opportunities. I am not a fan of processed foods so I cannot always escape a high grocery bill. However, even fruits, vegetables and certain grains go on sale, particularly if they are in season. Familiarize yourself with the circulars throughout the week and clip some coupons. It will help you stay organized and maximize your savings.

Saturday: Set some goals for the upcoming week. Having specific goals gives us something to strive for and motivates us to improve on our previous efforts. Whether you want to start small by saying you will make coffee at home every day for the upcoming week to save money, or you decide on something more long term like paying off your credit card debt, setting goals will keep you motivated.

Sunday: Meal prep for the week. The markup on prepared foods is brutal. If you eat out regularly, you will hate yourself when you see how much it costs you monthly or even annually. The easiest way to avoid temptation so you can resist the convenience of prepared foods is through advance preparation. While you may either run out of food or get sick of eating the same thing, bringing lunch 3-4 days a week will still yield a better outcome than buying lunch 5 days in a row.

Persistence, Patience, Purpose

 

We grew up in the age of microwaves, airplanes and high speed internet, which means we want everything yesterday. The same is true for our financial security. However, no matter how quickly we can download movies or get from one coast to the next, we have to accept that short of an inheritance or the Mega Millions, we have to build our success one block at a time.

Having the level of comfort that we want, does not happen overnight. We must first set goals to have something to strive for (Purpose). But we will surely face obstacles, and worse yet, failure. We must continue to push forward in the face of adversity (Persistence). Falling short of our goals is not a condemnation of  our plan itself but an indication that our approach was not the correct one. But most importantly, we have to be able to wait to reap the fruits of our labor (Patience). Rome was not built in a day, neither will your first million. Few great successful self-made millionaires saw overnight success. While it does get easier over time, and the second million may be earned overnight (because it takes money to make money), your first break won’t happen that quickly.

These are the 3 Ps of success that will help you keep a fourth one in mind: Perspective.

I Don’t Work for Free: Why Asking for Real Estate Favors is an Insult

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I recently overheard my mom on the phone telling someone: “… yes, of course. And if you ever need anything or have questions, she’ll be glad to help.” This sounds like she’s doing some great free marketing for me and I should be happy, right? Well the problem is this is someone who specifically decided to NOT use my real estate services.

According to him, someone who owes him money happens to be a real estate agent. When the agent found out he was in the market for a home, the agent said: “Why don’t I represent you, that way I’ll use my commission check to pay you back.” I found out about that last minute arrangements after I had cleared my schedule & organized 4-5 property showings for him & his wife. Lucky for me I was able to make some additional  changes to reorganize my day & lucky for our delinquent borrower, I had not yet met with the potential buyer to make him sign a representation contract.

However, it turns out that the other agent is one of those “hands off” types. He expects the clients to do the legwork of hitting the pavement to look for properties alone. Later, he wants to show up at the 11th hour to submit offers & attend closing to pick up his check. This means he has not been very available to help them navigate the process as first time homebuyers. The buyer who is a family friend was sharing his woes with my mother when I heard her offer up my guidance. She doesn’t know any better & views it as “helping a friend”. The thing is, for me, real estate is a business. Not a charity, not volunteer work. I cannot do the work of another agent when I will collect none of the proceeds. If anything, family & friends tend to be your greatest source of referrals & your first opportunities for business. You cannot expect me to provide you with market information that I pay to access, dedicate time that I am taking away from PAYING clients to your inquiries free of charge. It is disrespectful because you are expecting me to work for free while you give your business to those who are not required to do much.

Real estate is an appointment & volume based business. Every minute I spend with someone is time I am not spending with someone else, time I am not spending marketing & generating business. I have to be discriminate with my time, effort & attention. Even paying clients can only get so much of my time since I have other people to attend to. Those who expect charity work or favors, will get none of my time. If I’m not good enough for your money, I’m not good enough for your questions.

You don’t work for free, neither do I. Call your agent.

Adulting 101: Big Girl Money

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Adulting is hard. It’s even harder for the millennials who came of age during or after the Great Recession. It certainly doesn’t help that financial literacy has always lacked in our society. So I decided to put together a list of 10 things you can do to manage your personal finances like a grown up.

1. Have a budget to help you keep tabs on money.

2. Set specific and realistic financial goals to make sure that you not only have something to look forward to but that you also stick with it.

3. Find a money role model who will give you something to strive for. S/he will make you realize that it is possible to get yourself out of debt, they can keep you accountable and they are a much better influence than your friend who says: “YOLO!”

4. Practice the art of ‘No’. Establishing boundaries protects your wallet as much as your sanity. Girls trip to Bali? Matching designer duds for the bachelorette week end? Expensive steak dinner after work? If you can’t afford it, say no & stay firm.

5. Don’t overspend. It sounds simple but if it were that easy, studies results wouldn’t show that 1/2 of all Americans are struggling financially. There’s no greater sign of maturity than exercising self control & being able to delay gratification.

6. Save, save, save. Emergency funds, retirement, short & long term goals. Save for all of them. Saving will prevent you from spiraling out of control under a mountain of debt.

7. Monitor your credit. There should never be surprises when it comes to your finances. Maybe except for pleasant ones like being ahead of your savings schedule or inheritance from a rich long lost cousin. You don’t want to find out long after you’ve started the process that your mortgage has been denied or after your clunker breaks down that you don’t qualify for a car loan. You should show up for credit applications equipped with enough information to negotiate from a position of power.

8. Be properly insured. When I landed in the hospital in late 2009, I couldn’t have imagined my life would change the way it did. In fact, I did 2-hour street parking outside of the hospital. I ended up leaving 4 weeks later & a month after that, I got $50,000 bill. All but $150 was covered by insurance. As a seemingly healthy 23 year old, I could have passed on coverage to save myself the $250 a month I was paying. Instead, I decided I needed to be properly covered like the adult that  I was & that decision saved me from financial disaster.

9. Start learning investment basics. You cannot save your way to wealth. You can only earn your way to wealth either through wages, investments or some combination of both. You don’t have to become an expert stock picker, but you should learn the difference between some key concepts like 401k v. IRA, stocks, bonds & mutual funds, associated fees & tax implications of different investment types, etc.

10. Track your net worth. Your net worth is a measure of your financial progress. It is also a motivating & financial management tool & that is why I began actively tracking my net worth late last year.

Financial Insecurity is Back in Style

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If you were reading this blog last year, you should remember this story.  Since this is an old story, you probably figured that, better late than never, but she has finally turned her life around. After all, she is (even) older and wiser and has faced enough challenges in her life to have learned her lesson. If that’s what you thought, you thought wrong. The money nightmares are back.

Back in March she bought herself a brand new SUV. Hot off the lot with all the bells and whistles: leather seats, GPS, sunroof, etc. Given her poor credit and the high cost of the car, she’s looking at a $480 monthly payment not including insurance which is another $250. Two weeks ago, she slipped down a flight of stairs and she is now collecting disability payment in the amount of $300/week until she completes rehab. Excluding all utilities, her share of the rent is $600. I’ll save you the trouble of doing the math: she has once again placed herself in a situation where is back on the brink of financial instability.

It is critical that people start making calculated and responsible financial decisions. It would be an understatement to say that I am disappointed in the constant self-sabotaging practices that we engage in. It is as if we are not just satisfied with being mediocre. We are behaving as though we find excitement in the struggle and we chase it endlessly for the thrill of living on the edge. There is no other explanation for why someone making $15/hour would buy a $40k SUV after losing 3 other vehicles to repossession.