Author - Bridget Sullivan Mermel, CFP®, CPA

1
Should You Really Fear a Government Default?
2
Don’t Worry About Tax Hikes
3
Don’t Max out Your 401k
4
Is Now the Time to Get into Real Estate?
5
What Should I Be Asking My Mortgage Broker?

Should You Really Fear a Government Default?


Dear Bridget,

Is there anything we can/should do about the pending debt-ceiling deadline?  Should I be getting cash out of the bank to pay for bills and groceries, for example?  A recent article I read makes me kind of anxious.  It says that if the politicians don’t figure something out, banks will be SOL leading to a massive cash-run on banks.

What do you think?

This isn’t a dumb question!

With the pundits out there beating fear drums, it’s difficult to ignore the drama playing out in Washington.  Talking about a run on banks is a doomsday prediction.  The markets, …

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Don’t Worry About Tax Hikes

Don’t believe the hype on tax hikes. And certainly don’t spend precious energy worrying about them.Don't Worry About Tax Hikes

A Kate and Joe were in yesterday. They are professionals raising four kids, who, between the two of them, make around $350,000 a year. They were bemoaning the fact that, according to the media, their taxes are going to go up.

When we actually looked at their numbers, I had a different prediction: their taxes won’t go up. How could this be? Please excuse me while I get a bit tax-geeky (and simultaneously simplify the tax code and the political system for explanatory purposes.)

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Don’t Max out Your 401k

If you were to get on the Internet and poll the financial gurus, the message you would get load and clear is: Save Money. No matter how much you’ve saved, you will be woefully short when you get to retirement.

The first suggestion of these pundits? Put money in your 401(k). (I will use “401(k) as a surrogate for all retirement savings plans: 401(k), 403(b), SEP, SIMPLE etc.) I’m not against 401(k)s. Actually, I’m a big fan. However, I think the advice is wrong.

Here’s my message: Save 10% of your income. Put your money in a savings account. …

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Is Now the Time to Get into Real Estate?

I’m not very interested in predictions about how long the current economic downturn is going to last. What I’m interested is in the thinking behind the predictions. Here’s what I think about the segment that started the downturn: Real Estate.

My basic formula is that we’ll see the bottom when foreclosures have brought prices down enough so that it costs as much to own as it does to rent. That sweet spot gives investors the incentive to buy rental property.

The first caveat is that, in a particular area, if there is a lot of property in foreclosure, the

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What Should I Be Asking My Mortgage Broker?

There has been a big upsurge in refinancing of late, so a lot of people are contacting new mortgage brokers to determine how they can get the best rates.  I recommend calling at least 4 or 5 new brokers to give you a good basis of comparison.  Even if you have a current broker relationship, it is important to ask the right questions when you begin the process.  Here are the right questions you should be asking your mortgage broker:

1.How many refinances did you close in the last year? I’m not looking for exact statistics, and I wouldn’t disqualify …

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