Hi Lisa, First I appreciate all of the generous time and energy you spend on this forum answering questions like mine. Thank you. YOu are welcome... and WOW, you are tossing up a DOOZY for me here.... We just received bid from contractor. Amount stated above. Please detail out for us what exactly you are planning to remodel... how these improvements compare to the homes within a 2 block, and then 1/4 to 1/2 mile radius of your home... and why you are desiring to do these remodels at this particular point in time. We have no credit card debt and have 8 years left on a 15 year home loan (we owe $160k). This tells me that you are putting a quite large amount of your monthly investable growth funds into market-risk non-growth real estate equity (which simulates treasury bonds in your family balance sheet... except without any yield/income.) Are you sure this is the best choice of account at this stage of your financial life? Our mortgate runs about $1800/month. We have a car payment of $600; normal utility bills; and money taken out for our retirement and childrens' college funds. Are you completely tapping out your qualified allowances in tax-deferred and tax-free ivnestment accounts? We are wondering what would be the best way to pay for our extensive remodel? My husband has stock that we're planning to sell when it gets to $50 and will be worth about $70,000 take home. Until that happens, we can't sell and must assume we'll need to finance the entire amount. A) Why can you not sell now? Why would you not sell if the stock is not performing? B) Why WOULD you sell if/when the stock begins upward momentum and proceeds through the $50 mark? SO, should we go with a home equity line of credit our refinance? So many more important questions to explore.... HOW to get the funds is much less important than WHETHER you are proceeding along the best and safest path. In the current and foreseeable future environments, your cost of funds will be less (likely much less) with a HELOC tied to Prime... but again, that's the least of importance of all your considerations. I hate to put our hopes on the stock but feel it will eventually get to the amount we need in order to sell. Stock accounts are not a savings account... savings accounts pay interest that you can accumulate, and have a planned exit when they reach the accumulation levels you desire. Stock accounts are shares in business ownership, and you are tossing your hopes in along with the waves & tides of not just the particular business, but its industry segments, as well as the overall economy. If you want a stable, reliable, safe accumulation account... stocks ain't where to do that. Also, we cannot rely on end of the year bonuses in this present economy. Last year my husband received his entire year's salary as a bonus but we're pretty much guaranteed that won't happen this year. He's hoping that might change year from now but, again, that's not a sure thing. So, thanks for any advice you can offer. Sounds like you also need to build sufficient reserves and proper income insurance to protect for the variability of your husband's career income. Higher-end executives, financial and legal professionals often face these issues, and you can't afford to ignore it & simply "hope for the best." MUCH to cover here... and not enough details to responsibly serve you generically. Hope the above helps, at least in bringing for the gravitas of the situation, and the greater depth of exploration it all deserves. Cheers, Dave Donhoff Strategic Equity & Leverage Planner

Greetings everyone. Some folks may find some useful advice in the posts above. All that I said in the previous post still applies. The guy whose system I spoke of, whose Canadian system, using solid stocks, takes about 2 hours per year to operate, as one can choose a basket of 10, or 5, or 4 stocks and several of the chosen stocks, usually about 6 to 10 of the list of 10, continue unchanged, year to year. The system has a growth rate averaged over 20 years of about 14% ... at low (for Canadian residents) tax rate on current income, plus much of the gain stored up over a number of years till one sells, then there's a tax advantage on the gain, in Canada. But if one puts one's asset into the bank, where it produces interest ... one must pay part of the interest to the income tax people ... and interest is taxed at top rate. The borrowing agency guarantees that the number of dollars that you lent them won't shrink: the parallel guarantee that they never mention is the number of those invested dollars won't grow, either. So folks who put those grow-proof dollars into the bank must put some of the interest with the principal to maintain purchasing power, to counteract inflation. I expect my stocks to increase in value, at least partially offsetting the inflationary costs. I'd rather buy (part of) the bank! Not only have my bank shares' values grown, directly, over those years ... ... the dividend rate grew from a nickel or a dime, 41 years ago, to $3.48 annual rate, last year. Taxed at a low rate in earlier years, but the tax rate on that kind of income dropped again, last year. As that mutual fund manager said, "I like to buy a Dollar ... for 60 cents". I agree - but I'll buy it myself, saving the management fees that he charges. I'm sad that so many investors, when stock prices fall ... rush to the exits, instead of getting ready to buy more, and buying them. Further ... had some of you U.S. guys chosen to buy some Canadian money to have bought those stocks 5 - 6 - 7 years ago, 65 - 69 - 75 cents U.S. would have bought you CAD$1.00. If you were to choose to sell those stocks now (and I don't know why you would) every CAD$1.00 now does not buy only 69 cents U.S. ... but within a couple of cents either way of $1.00. Which would have meant an additional 1/3 - 1/2 growth of your invested asset. In addition to the growth over those years. I've written recently of a guy's mixed Canadian and U.S. system that, running for 16 years, has produced 5 year growth rates averaging 16 - 36% (a difference of 20) ... and 10-year growth rates averaging 19.6 - 29.3% (a difference of 10): note the lower rate of volatiity over the ten-year periods, please. The longer you leave quality stocks ... the better they do. Remember how the skilled advisors say to invest your dollars in good stocks, watch them a little in case the company gets crippled, but don't sweat blood if a $20.00 stock goes down $1.00 ...or $2.00 ... or $3.00 or more. If it's a quality stock, it'll likely recover. In fact, while the market is dropping, remember what a mutual fund manager told a group of us sales people almost 25 years ago ... "I like to buy a Dollar for 60 cents". During a substantial drop in the market, recruit some extra money in addition to the regular investment program that you follow. As you don't know when the bottom will appear, invest some funds from time to time, in a regular fashion. Would you rather buy coffee that's worth $1.00/lb. usually ... ... for $1.20 ... ... or, after a drop in the market - for 80 cents. As long as the quality is there, I like the last scenario the best. How unfortunate that so many investors buy a stock for a Dollar ... and when the market goes down, they get upset, angry and scared ... and sell for 60 cents! Good wishes for learning more about how the markets work, every month and every year. It's a hobby that pays well. Maybe use mutual funds for a while in the early years of your investing program, for diversity, but later learn how to buy various stocks from time to time, building your own diversity? The fees that you pay to regular mutual fund managers are substantial - comparable to the rate of income tax that you pay. And, if you put the money into the bank in "guaranteed" financial products, you must take some of current ernings to add to the principal to keep the purchasing power of your dollars even. When you put $20,000. into the bank 15 years ago, the bank would pay you (rather slim) interest every year, as agreed. If you need your $20,000. now and go to collect it, they'll pay you exactly $20,000. - which would have bought a nice car, 15 years ago ... but not now - cars are more expensive, as are most things. So, you must pay income tax on the current income, and at the top rate, by the way. You must put part of it with the principal to maintain purchasing power. I don't like earning interest! Good wishes to you and yours. And teach your kids about how money works, O.K? Please! They'll use that information every day of their lives! ole joyful

logic wrote: "dreamgarden, great article....brings a whole new meaning to "what a tangled web we weave when we practice to deceive".... And there you have it in a nutshell. However, I can see why it is more comforting for all too many to simply blame the lowly homebuyer....as one can then continue to remain in denial that of the fact that in essence, our entire finance system is one HUGE scam. Thanks. The more I read about the subprime mess, the more I realize what a "shell game" the bigger interests are playing with everyone's money. Even UK chancellor Alistair Darling has joined growing calls for a probe into the role that credit agencies have played in the world financial crisis. Darling censures rating agencies news.bbc.co.uk/go/pr/fr/-/2/hi/business/6995699.stm Its too bad the U.S. didn't follow Canada's example for insuring mortgages. "All high-ratio mortgages in Canada Ñ those with less than 20 per cent down Ñ must be secured by mortgage insurance, through, for example, the Canada Mortgage and Housing Corporation. In addition, Canadian financial institutions do not finance more than 100 per cent of a home's purchase price, and that value must be verified with a separate appraisal." marys1000 wrote: "Is there going to be a run on banks? Are banks going to fail? All my mother's money is in one bank." If you have all of your money in ONE bank, that could be a problem. I don't know if there is going to be a run on banks in the U.S. or not, but DH and I are NOT waiting to find out. We have already moved some of our investments into T-bills and CD's. The last time we talked to our banker, he told us we didn't have any sub-prime investments and tried to convince us to keep everything in the market. When I asked him to tell us which part of our portfolio was FDIC insured (or if he would be willing to support us if the market drops), he was silent. Never suggested T-bills or CD's either. I guess he is only interested in our "welfare" as long as he (and his employer) stand to gain. Now I understand why the Russians stuffed money under their mattresses after their banks failed so many times. Time-The Last Sacrifice- Dec. 22, 1947 The Soviets had spiraled into economic trouble similar in some ways to capitalist inflationary difficulties. The ruble, officially valued at 20 U.S. cents, was worth no more than three in actual buying power. Illegal speculation by bureaucrats, collective-farm bosses, store and factory managers and others had become a lively menace to state planning. Peasants, and some city dwellers, had also accumulated hoards of rubles largely because too few of the things they needed, or wanted to buy, were available. Never knowing when deposits might be frozen, they distrusted banks, kept their hoarded money at home. Rationing controls could not be lifted until this money was destroyed, and its destruction was Zhdanov's principal aim.

This was in our Newspaper today and is a good guide for someone wanting to build. Nine ways to help the home construction process go smoothly By SHEILA J. NEVINCZENKO Special to The Gazette Special Sections Somewhere between buying a car and having plastic surgery lies the experience of buying a new home from a home builder. Every day youll wake up to, come home to and go to sleep with the consequences of the buyer/builder relationship. The result can be contentment and pride or it can be six-digit regret. What follows is a list of nine things builders wish buyers knew about home construction. Learning from their experience and expertise is literally money in the bank. 1. Do your homework. Literally. "I really encourage people to do some research before diving into it too far," said John Bridges, owner of Canaan Company, who has been building custom homes for 22 years. Research starts with carefully choosing your home builder. "People move faster than they should. You want to truly be satisfied with who youÂll be working with in a longterm relationship. This is not like buying a car. It could take two years. ItÂs imperative you like who youÂll work with. Talk with them to get to know them." 2. Be prepared. Once youÂve decided on your builder, learn as much as possible about the building process. "Know as much as you can up front," advised Randy Reynolds, marketing director for Acuff Homes. Make your selections early so that if desired items are out of stock, that can be addressed early. Acuff Homes provides a checklist up front to home buyers. The list includes things such as having the home loan in place early. A builder doesnÂt want to spend seven or eight months building a house then find out there are financing problems at the end, said Reynolds. This costs him hundreds of dollars per day in charges on the construction loan. "Ask questions up front," he said. "(Such as) how much does it cost to make changes? Some builders charge a change fee plus the cost of the change." Acuff Homes also gives home buyers a flow chart that shows the building process so they know when they can expect framing to start, understand that a foundation takes a couple days to cure and that they have to wait for inspections, etc. 3. Communication is key. You need a central point of contact, and try to stay in constant communication with that person. DonÂt take your questions and requests to various people such as subcontractors. Take them to your builder or to the person designated by your builder. 4. Be patient. Patience is a great asset throughout the building process. "Be patient through the start-up process. Take time with the design phase," said Bridges. The most important time is when the team is doing their job development before starting construction. Patience and thoroughness pay off. "The more time spent up front, the better the project will go and, 90 percent of the time, the less conflict youÂll have. If everything up front is all on paper, everything is smoother," he said. Bridges encourages three to four months before breaking ground on a custom home. Reynolds, too, stressed patience. "Know the end result will be worth waiting for. Buyers like to rush toward the end of the building process. There are sometimes unforeseen things that happen. Let the builder do his job." 5. Know what you want. Know what you want and be as clear and organized as possible. Bridges said buyers should shop around and go see houses they like. "IÂd make sure I pack my digital camera everywhere I go. As a buyer, IÂd go see homes that I could afford." Reynolds said, "Diagrams help. ItÂs hard to read a buyerÂs mind." Take photos for changes. Be very organized. It helps the builder to schedule. 6. Be realistic about changes. Discuss desired changes as early as possible in the building process and be realistic about the extra costs theyÂll incur. "Communicate any changes you want made as soon as possible to your representative," Reynolds advised. He stressed that those changes should not be made to a subcontractor or "trade" on the building site. Sometimes a home buyer will talk to a trade on-site about a change and this can cause misunderstandings. "When you communicate changes, realize costs are involved . . . because other trades come in (to factor). If a builder has to pay for it, thereÂs a good chance the buyer will have a cost increase," Reynolds said. The builder has to make money to stay in business. 7. Get involved. Stay actively involved throughout the building process. Buyer/builder interaction naturally should increase with the higherpriced homes and with semi-custom or custom homes. "Be involved. I love people that are involved," said Bridges. "Clients being involved has saved me money. Clients catch errors." 8. Safety first. Talk to your home builder about visiting the site before you go. Different builders have different views on this. They may be concerned about you having an accident. "For safety reasons, abide by the builderÂs guidelines for visiting the property. You need a hard hat. Go through the sales rep first," said Reynolds. 9. The Golden Rule rules. Trust that the builder will do a good job. "Keep a good positive relationship along the way. DonÂt be adversarial," said Reynolds. "Treat them like you want to be treated and youÂll get a better product. No trade likes someone looking over their shoulder." When a mistake is made, a reputable builder will step in and work through it. "Make sure you always remember that I work for you," Bridges said. "IÂm not your enemy. IÂm your employee. WeÂre entrusted with peopleÂs money and theyÂll go into debt (for a house). We should respect that in a fair, ethical, honest way. IÂve been blessed with good clients. I try to make it my goal that when weÂre done weÂll invite each other over for dinner." And they do. Canaan Homes builds two to five custom homes per year ranging in price from $300,000 to $1 million but the majority are in the $400,000 to $600,000 price range. Acuff Homes is building in the Spires Broadmoor, Cathedral Pines, Northgate and Forest Gate developments in addition to semi-custom and custom homes in other locations.