The Malachi Group

Christmas is now behind us. It turned out to be a very joy filled day for our family. Now that we are empty-nesters we decided to only buy each other one small gift. As a gift giving alternative we decided to support a lady who became a widow this fall, her adult daughter & family, and another adult daughter. That brought us much more joy than showering each other with gifts that we don't need or sometimes even want. We did have fun with giving the granddaughters small gifts and stocking stuffers. But as life has taught us some of the best parts of life are being with loved ones and giving affordably priced gifts to others. In the evening we had a single man come to our house for dinner. His children live hours away and he didn't have anyone to celebrate with. As the night advanced and our feast had been consumed I felt compelled to give him the Christmas gift Mary Jo had given to me. So I did, without him knowing it was my Christmas gift. What an understanding wife. Mary Jo accepted me giving away my gift without hestation or remorse. Mary Jo had baked some cranberry bread which we delivered to our neighbors Christmas Eve. They were pleasantly surprised. So I proclaim Christmas 2008 as one of the very best Christmas' ever. No credit card debt was encountered, family was thoroughly enjoyed and we brought a new spark of life to some others. Hope yours was the same.

Retirement Killers

1) Not having a clue of how much to save. The 2008 Retirement Confidence Survey reports only 47% of workers have calculated how much they need to save for retirement. If you don't know how much you will need when you retire and what age retirement can begin you don't have any idea if you can make retirement work for you. To calculate your retirement savings program go to www.dinkytown.net. They have a free retirement calculator. You need to have Java installed in your PC. Be patient it takes about 30 seconds to load the program once you click on it. This calculation will give you the exact amount you will have at a certain age based upon your current 401k balance, savings rate and estimated return (which you input). You can also include an estimate of social security. The program will also tell you when you run out of money.

Remember the following statistic when calculating how much you will need for retirement. You need to eat! The average American lives 22 years in retirement. Most of us will have a spouse. let's say you are really money conscious and can eat on $5 per meal. Multiplying that out - three meals a day, 365 days a year, at $5 per meal for each of you for 22 years = $240,900. So just to keep you fed you need almost a quarter of a million dollars! I just heard this morning that the average American eats at a restaurant 207 times a year. Hard to imagine that can be done at $5 per meal.

2) Cashing in your 401k when you change jobs will kill your retirement and make the government wealthier. A Hewitt Associates study found that 45% of workers cash in their 401k when they switch jobs. The workers take the money and then pay a 10% penalty on the money, and income taxes if they are not yet 59 1/2 years old. Many workers are under the impression that they will only have to pay a 10% penalty which is not the case. They haven't paid income taxes on the 401k money so they will have to at tax time. What a miserable awakening to realize you will have to pay the IRS taxes on the 401k money you spent. A shocking surprise, that angers most people. Unfortunately there is no way to rectify the situation. By tax time you owe and all you can do is pay the IRS. If that isn't painful enough workers have taken out of their retirement plan and effectively have pushed their retirement age out further because workers have spent there retirement money now. Workers spent the retirement money that was going to accumulate and grow for years and years, but now is gone. History shows that with good years, OK years, so so years, difficult years and painful years the market return has averaged just over 10% for the last 70 years. For me, investing in diversified investments in the stock market for the long term is the best return for 401k's that I find.

"Having been somewhat successful in our ....business for nearly a decade, my husband and I found ourselves in unfamiliar territory during the downturn in San Diego over the last couple of years. We were struggling to maintain our lifestyle and manage the loss of income at the same time. ...... A friend of mine from church was going through a difficult situation as well and while sharing and trying to encourage one another one day, she mentioned knowing a 'financial guy' who was also a Christian and who 'really knew his stuff'. So, I took his name.
A few days later my husband and I found ourselves under the gun to make a financial decision the following day (Saturday) with one of our creditors. Never having been in this position, we had no clue what the ramifications of our decision, one way or the other, would be. I mentioned jerry to my husband and he thought we should try him.
So, I called Jerry on a Friday evening at about 6:00 pm., left a message and just assumed I would hear back from him on Monday. That evening about 9:15 pm I received a call from Jerry. He was familiar with the scenario I described and encouraged us that we could buy more time from the creditor before making the decision, so he could analyze the situation. He offered to meet with us Monday morning at 9:00 am. Wow! That was impressive enough, until the last part of the conversation that night. As we were ending our conversation, Jerry made a point of encouraging us by reminding us that we needed to be looking forward and that there would be no judgment on his part, whatever the circumstances. He was clearly a Godly man and Christ shone through him that night.
We did meet with Jerry that next week. His vast financial knowledge and experience were immediately evident. Since that time our family has been through extremely difficult challenges and trials. We have had to make some of the toughest decisions of our lives and Jerry has been there with us every step - always just a phone call away. He has seen us cry, he has seen us at our most stubborn, he's seen us laugh and he has made us laugh. He has become so much more than a financial advisor. He has become a source of encouragement, a Godly counselor, a confidant, and a friend.
We would highly recommend him to anyone looking for an honest, forthright, and knowledgeable, sincere person to handle their finances.
Sincerely,
K & L

The Malachi Group is excited to announce a new venture in bringing financial literacy to our area.

We have been asked by the Poway Adult School Education to bring our "Mastering Money - Financial Liberty" class to their venue at the Rancho Bernardo High School, 13010 Paseo Lucido, San Diego. The first series will be held on Tuesday September 16th and 23rd. It will be from 6:00 to 9:00 pm in room 505. The fee is $45, payable to Poway Adult Education. You may go to their website
www.powayadultschool.com to register.

We are looking forward to this new opportunity to help teach others a way to take control of their day to day finances to plan for a new financial freedom.

Spread the word!

Being a recovering "compulsive" shopper, I agonize long and hard over all the purchases I make - from dishtowels to candles, ink for the printers, airline and hotel reservations, and of course, the most important of all, chocolate. The choices seem endless, and if I am only going to buy one, it has to fit my budget and please my palette!

These days, my trips to buy groceries take longer and longer, as I read labels for "wheat free", protein content, fat content, organic, sustainably grown, calories, and then, the worst part - the price.

How can so few items in my grocery cart add up to so much at the end? Today the cashier looked at me and smiled as she said "You saved $25.43 today - the total is $91.61. That's not so bad.... anything under a hundred is pretty good!" I replied, "Maybe so, but I just wish my cart was full." (no comment from the cashier)

As I unload the groceries at home, I think to myself - how is a family of four or six or however many, surviving? Are they buying a lot of macaroni and cheese dinners? Which by the way, are not wheat free.

No wonder so many groceries are bought with credit cards these days. How can the average American family, especially here in Southern California, buy enough food for the week on a budgeted amount that was meant to last for the month? In a recent article by Gary Weiss, I read that the average American carries four credit cards in their wallet. And we all use them more than we should. Today, the credit card debt in the U.S. has reached a record high of nearly $1 trillion dollars, according to the latest figures from the Federal Reserve Board. The average American's household debt from credit cards has risen from $2966 in 1990 to $9984 in 2007. Now, I am guessing the "average" American he is referring to does NOT live in San Diego.

To make matters worse, credit card companies try to lure the young and financially unstable consumers into their clutches. If you have had trouble paying your bills in the past, you can expect to receive tons of new offers for transfers and new credit cards. Mr. Weiss writes"During the first quarter of 2008, for example, 30% of credit-card mailings were specifically targeted to customers who already were steeped in debt."

So I was also pleased to read that both Congress and the Senate are working to pass some legislation to establish a Credit Cardholders Bill of Rights, and set some strict guidelines for the credit card companies. And the Federal Reserve Board is proposing tougher rules to protect consumers. These things won't happen soon enough, in my opinion. Yes, we the consumer, are at fault for overspending what we do not have. But it infuriates me that these companies that are worth mega-billions, take advantage of the already downtrodden and financially undereducated consumer.

In the meantime, be sure you know what you are agreeing to when you fill out those credit card applications and transfers. Read the small print. Always pay before the due date. Pay off your balance if at all possible. Read what comes in the mail from your credit card companies. Watch out for hidden fees and penalties.

Don't use your credit card just to buy an item that is "on sale". You will still have to pay for it, and you haven't "saved" a penny. Write down a list of your credit card debts, and pay off the smallest balance first, while making your regular payments to the others. This will give you a sense of accomplishment!

Lastly, save your loose change to buy the chocolate - and try to keep it under $3.

Mary Jo Troyer

It still rings true. Financial trouble is one of the greatest problems experienced by couples and families. Statistics sight that financial issues are the third greatest reason for divorce. With that said we assist our clients in overcoming financial obstacles by helping them identify what all of their living expenses include. Whether expenses are a monthly expense or a non-monthly expense, a calculation is made to address them in the "planned spending program". Also, we identify what is the actual and specific amount of discretionary spending. A compilation is then made in a specific "planned spending program". This is a true and accurate measurement of the comparison of income to expenses. Normally there is a need to re-evaluate spending once the results are totaled. The old adage is still true that living within your means brings contentment. Living outside of your means on increasing credit, leads to financial crises, financial baggage, emotional disruption with family members and discontentment with ourselves. Living on credit leads to financial disaster. A question we often ask our clients is what will you do when you can't get any more credit?

If you are in a financial predicament right now, want to pay your obligations, but don't know where to turn, look to us. We have assisted many clients in financial crises. Our staff of experts has been able to help hundreds of clients who couldn't find the answer on their own.

If you are nearing the stage where you don't know where to turn but know you have to change the way you handle your finances, contact us, we can help before it is too late.

Wouldn't it be great to drive down the highway being content and enjoying the drive instead of stressing over your finances and how you will meet the next payments?

Are you in a financial dilemma regarding your delinquent home loan? You have thought about options - foreclosure, short sale, or just walking away. Perhaps the options have financially racked you. Repeatedly. There is yet one other option to look at before you do any of the above.

If you have a mortgage loan of 81-100% LTV (loan to value) you may want to consider speaking with your Private Mortgage Insurer. The PMI(Private Mortgage Insurance) provider has guaranteed the bank/mortgage lender that if you don't pay the bank/mortgage lender, they will reimburse the bank its losses after the foreclosure. The bank, not the borrower, is the beneficiary. If all sides agree to sell the house for less than the loan balance (short sale) the PMI provider will then pay the bank the amount of the bank's loss.

As long as you originally took out only a first mortgage loan for more than 80% of the original appraised value you may be able to construct a work out plan through the PMI provider and your bank/mortgage lender. You may contact your PMI provider directly. If you are currently delinquent they may have already contacted you. Two major companies that provide PMI are MGIC and Genworth. If you have PMI and are paying premiums but you don't know the company name you can review your closing statements or call your bank/mortgage lender to find out which company you pay. These companies are very interested in reducing their financial losses. Some have taken the following positions to reduce their losses.

1) Seek a lump sum payment from the borrower. (Seldom a viable option for the borrower.)
2) Try to fashion a plan for the borrower to repay the past due amount within a year or 18 months.
3) Discuss modifying the mortgage by changing the rate or the final payoff date or even forgiving some debt.
4) If none of the above options work the homeowner will have to proceed with a short sale, foreclosure or returning ownership to the bank.

Genworth recently introduced its first "foreclosure prevention scorecard" a quarterly report about its loss-mitigation efforts. The insurer worked directly or indirectly with 2,871 borrowers in the first three months of this year, and 2, 613 worked out deals to remain in their houses. A little more than half of the delinquent borrowers got repayment plans and 37 percent got mortgage modifications. 1

Before you throw in the towel check to see if PMI premiums are included in your mortgage payment. If so, check in with the PMI provider and see if there are any other options available.

This is one last option you must address. PMI providers are ready to address your situation today!


1 Bankrate.com - Mortgage Insurers try to reduce foreclosures.

The Malachi Group was founded on the principal of helping Americans further their financial education to achieve their goals, plans and desires. With over 36 years of financial services experience, the company specializes in training families to eliminate debt through a series of informational workshops. These simplistic workshops have helped Americans take control of their finances so they can focus on their lives again. Learn more about our interactive TAKE CHARGE programs and get started today.